The opinions expressed by Entrepreneur authors are their very own.
Most people think that the success of a newsletter depends on the variety of subscribers and open rates. However, the real opportunity lies in understanding a few key principles that experienced operators use to build useful assets.
This is what actually moves the needle.
Bigger is not all the time higher
There’s a counterintuitive truth in the newsletter industry: growing too much can actually hurt your revenue. When Morning Brew hit 1 million subscribers, revenue per subscriber dropped 23%. Think of it like a party – the variety of guests is optimal and conversations flow naturally. Add too many people and the quality of interaction suffers.
The sweet spot is often between 10,000 and 50,000 engaged subscribers. This is where your audience is large enough to generate significant revenue, but sufficiently small to maintain high-quality engagement. With such a large audience, you’ll be able to truly understand your readers’ needs, create targeted offers, and maintain the personal touch that keeps subscribers engaged.
The recent economics of growth
Growing your subscriber base doesn’t have to be expensive. Smart newsletter operators are turning traditional marketing the wrong way up using tools like Beehiiv and Sparkloop. Here’s how to do it: When someone signs up for your newsletter, they’ll be shown recommendations for other newsletters. If they subscribe too, you will get paid – often $2-5 per referral.
This means you can spend $3 to acquire a subscriber through Facebook ads, and if that person subscribes to two featured newsletters when they join, you will make $4-10 – making a profit before you send your first email. In this manner, many operators expand their offer to tens of hundreds of subscribers, effectively earning money by expanding their audience.
Another effective growth strategy is the unexpected use of cross-promotions. Instead of using your newsletter audience to grow the same newsletter, use it to build entirely recent assets. For example, if you run a technology newsletter and one other publication asks you to cross-promote, don’t promote your newsletter; as an alternative, ask them to promote your recent course or consulting service.
This approach can transform standard promotional opportunities into significant revenue generators. While a typical newsletter cross-promotion might attract a few hundred subscribers price around $1,000 over the course of a lifetime, promoting a $997 course might bring in 5-10 high-value customers, which might hypothetically then generate $5,000-10,000 from a single promotion.
Outside the newsletter
The most successful newsletter operators understand the basic truth that a newsletter itself is not a business, but the foundation of something greater. Think of your newsletter as a powerful magnet that draws the right people to your ecosystem of products and services.
This might mean creating courses that solve specific audience problems, building a community where subscribers connect and share insights, offering consulting services to your most engaged readers, or developing digital products that add value to your newsletter. The key is to understand that your newsletter is often the starting of a customer relationship, not the end.
Newsletter content builds trust and demonstrates expertise, and real revenue comes from adjoining offers. This is not about cheating subscribers; it’s about providing them with increasingly useful ways to serve them.
Make every message count
Understanding how people interact with their inbox is crucial. Think about your individual email behavior – by subscribing to five newsletters, you would possibly read all of them. But with twenty bulletins? You start scanning message topics faster and pay less attention to each sender.
This reality makes audience engagement especially compelling. Paid subscribers tend to stay engaged longer than organic search subscribers. Why? Because they showed in their first interaction that they value curated experiences in their inbox. These subscribers often create dedicated folders, arrange filters, and engage more actively with content.
Email timing also matters greater than most realize. Morning readers are more likely to make purchases, while evening readers tend to engage more deeply with content. Smart operators use this information to their advantage and release several types of content at different times to maximize impact.
Measuring what matters
Traditional metrics like open rates and click rates only tell a part of the story. The real value comes in understanding the nuances of subscriber behavior. Some subscribers may never click on a link but read every word you write, while others use multiple platforms and consistently purchase dearer products.
This understanding has profound implications for the structure of your newsletter business. Success comes from identifying different behavior patterns and creating appropriate paths for each segment. Some subscribers could also be perfect for ad revenue, while others are higher suited for premium offers.
Building long-term value
When The Hustle sold to HubSpot, only 40% of the valuation was based on revenue. Much of the value got here from what investors call “community capital” – the proven willingness of audiences to take motion, whether that is purchasing products, attending events or promoting a brand.
This shows that modern newsletter corporations are greater than just publications; they are community assets that increase in value over time. A highly engaged audience of fifty,000 subscribers that consistently takes motion is often price greater than a passive audience of 500,000.
The newsletter space is changing quickly, but that creates opportunities. While most creators are chasing the variety of subscribers, you’ll be able to focus on building something more useful – an engaged audience that increases in value over time. Start with these basics, apply them consistently, and you will be ahead of most other newsletter operators.