He ought to know. The Austin, Texas-based entrepreneur's career includes fantastic highs, like growing Gambit to an $18 million operation, as well as some serious lows, most notably getting fired from a pre-IPO Facebook and losing $185 million in stock options.
Not that the latter slowed Kagan down. He went on to become employee number four at Mint.com before starting two multi-million-dollar businesses, AppSumo.com and Sumo.com. In the process, he's also grown his personal email list to 150,000-plus subscribers and is adamant you should learn how to do the same.
Kagan and I talked about just that when I recently interviewed him. Here are his top tips for making email marketing a powerful force that drives more customers to your business.
1. Plan your campaigns backward to create the most relevant messages.
Too many companies throw together an email-marketing plan without much thought, then expect the number of deals they close to immediately skyrocket. And we all know that rarely works.
Instead, Kagan suggests working backward from the end of a campaign to reach a beginning that makes sense. Who will see your emails? CEOs of technology companies? Yoga instructors? Once you know that, find out where they are. Do they mostly stick to email or do you also need to consider reaching them via reddit, Quora, and various social networks? Next, figure out what they care about and how you can help.
Spending this much time working backward through who your customers are and what they want creates much more relevant content, not to mention better-quality information. Your audience, in turn will look forward to receiving your emails each week.
2. Pick an ideal number of subscribers and work toward it for one year.
Barring some miracle, your mailing list will not be an overnight sensation. But many companies still expect that and give up when it doesn't happen. For this reason, Kagan recommends starting out with a specific number you want to reach. Progress is easier to track when you're looking at a goal of 10,000 subscribers in one year as opposed to just a foggy idea of how many you want.
Commitment isn't just about the end number, though. It's also about the persistence to see a project through. Kagan advises making a commitment to sending your subscribers one email per week for a full year, even if growth is slow at first. And since his own email list started out with a mere 100 subscribers, it's safe to say he knows a thing or two about the power of incremental growth.
3. Don't be afraid to use your network.
When trying to build up email lists, Kagan finds that most people are too self-conscious to take full advantage of their network. They skip telling their friends about their latest project or business because they think strangers will care more than the people closest to them.
That's a mistake.
One of your first steps in growing your email list should be to look through all of your contacts--on Facebook, LinkedIn, Twitter, etc.--and determine who might be interested in your business and its services. Don't add them to your mailing list without first reaching out to explain what you're working on and asking if they'd like to opt-in to your messaging.
"You have more assets available to you than you realize," Kagan says, "You have more people in your network that you can work with or who would be interested or who can refer people to you."
4. Turn "No" answers into referrals.
Even if members of your own network aren't the target audience for your business, don't let that slow you down. Remember that "every one of your friends has at least one friend who should be relevant to your business," says Kagan.
In his own work, he's found that most--maybe even 99 percent--of companies don't use their referrals effectively.
He has a very specific formula for changing that.
Approach your contacts with a targeted request, such as, "Are you interested in receiving my weekly newsletter?" If your contact says yes, fantastic. If they don't, avoid directly asking if they can give you a referral. Instead, say something like, "Who can you think of who would appreciate [the product]?"
It's natural to let fear of failure occasionally hijack your thinking when you're faced with a task as daunting as an email-marketing plan. But don't throw your hands up in defeat just because growth seems slow. Stick to the plan, even if it means tracking your progress a single day at a time. Slow growth is a painful process, but one that usually winds up in at a very successful end.