How Does ConvertKit Make Money? CovertKit Business Development Model Explained

ConvertKit is an email marketing tool that monetizes with three main subscription plans based on the list size. For instance, an email list with 0-1k subscribers goes for $29; 1k-3k subscribers cost $49, and 3k-5k cost $79. ConvertKit reached a milestone of over $1 million in monthly recurring revenues, in March 2018.

Business Model ElementAnalysisImplicationsExamples
Value PropositionConvertKit’s value proposition centers around: – Email Marketing Automation: Offers a platform for automating email marketing campaigns. – Audience Segmentation: Provides tools to segment and target audiences effectively. – Subscriber Growth: Helps businesses grow their email subscriber lists. – Creator Focus: Tailors its services to content creators and online entrepreneurs. ConvertKit empowers creators with user-friendly email marketing tools, automation, and audience management capabilities.Offers a platform for automated email marketing, saving time and effort. Allows precise targeting through audience segmentation. Supports subscriber list growth for businesses. Focuses on the unique needs of content creators and online entrepreneurs. Attracts users looking to leverage email marketing for their online businesses.– Email marketing automation for time savings. – Audience segmentation for effective targeting. – Tools to facilitate subscriber list growth. – Catering to content creators and online entrepreneurs.
Customer SegmentsConvertKit serves various customer segments, including: 1. Content Creators: Bloggers, podcasters, vloggers, and writers seeking to engage with their audiences. 2. Online Entrepreneurs: Individuals or businesses using email marketing for online businesses. 3. Small Businesses: Small enterprises looking for email marketing solutions. 4. E-commerce: Online stores seeking to nurture customer relationships. ConvertKit caters to a diverse range of users focusing on email marketing.Provides content creators with tools to engage with their audiences effectively. Supports online entrepreneurs in their email marketing efforts. Offers small businesses email marketing solutions. Nurtures customer relationships for e-commerce stores. Serves a diverse user base with email marketing needs.– Bloggers, podcasters, vloggers, and writers. – Online entrepreneurs using email marketing. – Small businesses in need of email marketing solutions. – E-commerce stores nurturing customer relationships. – Diverse user base with email marketing needs.
Distribution StrategyConvertKit’s distribution strategy includes: – Online Platform: Providing its email marketing platform through a web-based application. – Content Marketing: Creating educational content to attract users and demonstrate value. – Affiliate Program: Enlisting affiliates to promote ConvertKit in exchange for commissions. – Partner Integrations: Integrating with other tools and platforms to expand reach. ConvertKit leverages its online platform, content marketing, affiliates, and partner integrations for distribution.Offers easy access to its email marketing platform through the web. Attracts users with educational content and value demonstration. Utilizes affiliates to promote its services to a wider audience. Expands its reach by integrating with other software and platforms.– Providing email marketing services through a web application. – Creating educational content to attract users. – Enlisting affiliates to promote ConvertKit. – Integrating with other tools and platforms.
Revenue StreamsConvertKit generates revenue through various streams: 1. Subscription Plans: Charges users based on the number of subscribers or features used. 2. Affiliate Commissions: Pays commissions to affiliates for referred users. 3. Premium Features: Offers advanced features as part of higher-tier plans. ConvertKit diversifies its income through subscription fees, affiliate partnerships, and premium features.Generates revenue from users’ subscription payments. Incurs costs based on affiliate commissions for user referrals. Offers premium features for advanced users willing to pay more. Diversifies income sources for financial stability.– Earning revenue from subscription plans. – Paying affiliate commissions for user referrals. – Offering premium features for advanced users. – Diversifying income sources for financial stability.
Marketing StrategyConvertKit’s marketing strategy involves: – Content Marketing: Creating educational content through blogs, webinars, and courses. – Email Marketing: Utilizing its own platform for email marketing campaigns. – Affiliates: Enlisting affiliates to promote ConvertKit in exchange for commissions. – Free Workshops: Offering free workshops to demonstrate the value of its platform. ConvertKit focuses on content creation, email marketing, affiliates, and workshops to attract and engage users.Attracts users with valuable educational content. Demonstrates the effectiveness of its platform through email marketing. Expands its reach through affiliates. Offers free workshops to showcase the value of its services.– Creating educational content through blogs, webinars, and courses. – Utilizing its email marketing platform for campaigns. – Enlisting affiliates to promote ConvertKit. – Offering free workshops to demonstrate value.
Organization StructureConvertKit’s organizational structure includes: – CEO and Leadership Team: Led by the CEO responsible for strategic direction. – Product Development: Teams focused on enhancing the platform. – Customer Support: Providing assistance to users. – Marketing and Content: Creating marketing materials and educational content. ConvertKit maintains a structure that supports product development, customer support, marketing, and strategic direction.Led by a CEO who oversees strategic direction and decision-making. Focuses on product development for platform enhancement. Provides customer support to assist users effectively. Creates marketing materials and educational content to engage users. Maintains a structure that aligns with its core functions and business goals.– Led by a CEO responsible for strategic direction. – Teams focused on product development. – Providing customer support to assist users. – Creating marketing materials and educational content. – Aligning with core functions and business goals.
Competitive AdvantageConvertKit’s competitive advantage stems from: – Creator-Centric Approach: Tailoring its services to the unique needs of content creators. – User-Friendly Platform: Offering an easy-to-use email marketing platform. – Educational Content: Providing valuable resources and educational content. – Affiliate Program: Leveraging affiliates to extend its reach. – Subscription Model: Offering transparent and scalable pricing. ConvertKit’s focus on creators, user-friendliness, education, affiliates, and pricing enhances its competitive position.Benefits from a creator-centric approach, attracting content creators. Provides an intuitive and accessible platform for users. Offers valuable educational content and resources. Expands its reach through affiliates. Utilizes a transparent subscription model for user scalability. ConvertKit’s strengths contribute to its competitive advantage in the email marketing industry.– Tailoring services to the unique needs of content creators. – Offering an easy-to-use email marketing platform. – Providing valuable educational content and resources. – Leveraging affiliates to extend reach. – Utilizing a transparent and scalable subscription model. – Enhancing competitive advantage in email marketing.

ConvertKit recently announced a significant milestone, $1m in MRR. Not bad for a startup which was bootstrapped by its solo-founder, Nathan Berry. In fact, Nathan Berry set out a challenge, which he called Web App Challenge, back in 2012. He didn’t know what to launch; he only had one objective: make $5k in MRR.

That is how ConvertKit started out, and here you can read the whole story:

ConvertKit Startup Story: How CovertKit grew from $0 to $1M in MRR with direct sales, word-of-mouth, and affiliate marketing

What are the main distribution channels ConvertKit used to grow?

Along the way ConvertKit mastered three main channels:

  • direct sales
  • word-of-mouth
  • affiliate marketing

Direct sales

It all starts with direct sales. If you don’t have customers, there will be none referring you.

When Nathan Berry launched ConvertKit, after almost two years into the project, growth wasn’t picking up. Instead, it was slowing down at the point that he was advised to shut down the company. Yet he decided to double down, invest part of his savings from previous online businesses and started to dedicate to the project full-time (in fact, he was only devoting part of his time to ConvertKit).

Among the initial strategies he was using, there was content marketing, blogging, and social media. However, those strategies didn’t bring ConvertKit far in terms of growth.

What direct sales tactics did Nathan Berry use?

It can be broken down into three main parts:

  • Cold email
  • Skype demos
  • Super-organized follow-up

Cold email template Nathan Berry used for ConvertKit


Is anything frustrating you with MailChimp?

The reason I ask is I run ConvertKit, which is an email marketing platform for professional bloggers. We’ve got a lot of great bloggers using us like Katie and Seth from Wellness Mama, Pat Flynn from Smart Passive Income, and Chris Guillebeau.

I’d love to hear more about how we can build it to better serve bloggers like you.

Talk soon,



This is how Nathan Berry reached out to potential ConvertKit users. The next step was the Skype demo.

Skype demo to remove the biggest objection

At the time jumping on a Skype call was a way to understand what was the main point of friction ConvertKit potential users had. In fact, as Nathan Berry describes:

Most early sales conversations ended with the lead saying, “ConvertKit sounds great and I love what you’re about, but… switching email providers is so much work. Sorry, it’s just not going to happen.”

Ouch. Just when I thought the conversation was going so well.

Then out of a moment of desperation I said, “It’s not that much work. I’ll prove it to you and do it all for you. For free.”

A little startled, they agreed. Then I realized that’s the silver bullet. The prospect placed all their possible objections on a single thing: the cost of switching. So with one offer I could remove that and make them so much more likely to switch.

This turned into a service that we now offer many times a day: concierge migrations.

Basically on any account over $79/month (5,000 subscribers) we will move them from their old email tool over to ConvertKit for free. That includes FTPing into their site and switching all their opt-in forms, signing into MailChimp (or another tool) and copying and pasting over all their automated emails, and finally exporting and importing all subscribers to keep any tags or segments.

It’s a decent amount of work, but we can do it pretty quickly. More importantly, the churn on accounts that go through a migration is around 1.5% rather than the more typical 5.5%. So it’s definitely worth the initial work up front.

In short, conversations are instrumental in understanding what is the main point of resistance and acting on it. When Nathan Berry realized there was one central point of friction (too much work in changing email provider) he set up a “concierge migration” that allowed his potential customers to switch to CovertKit for free!

Follow-up system used by Nathan Berry when growing ConvertKit

When you follow-up you will often say over and over again the same thing. Don’t do that. Instead, find something useful for the person you’re following up with. As Nathan Berry explains:

If your follow-up emails are just, “Hey, I haven’t heard from you, can we talk?” You’ll probably never get a response. Instead find some way to help them. It could be an intro, feedback on a recent project, a tip to fix something, or a tactic that’s recently worked for you. But don’t just keep sending them the same “Hi, hi, hi let’s be friends” emails.

Also, initially he didn’t use any complicated or expensive software. Instead, he used a Trello board to track all his conversations and make sure he wouldn’t lose a contact anymore:




Once you have is mainly about customer success. Once you managed to get into a small niche, most people will know each other. Therefore, you will have to make sure those people are happy enough to refer your service to more people in their community. This is the power of word of mouth, which of course starts from a consistent direct sales strategy.

Affiliate marketing to amplify growth

Once growth picked up for CovertKit, Nathan Berry started to experiment with affiliate programs. As most of his initial customers were professional bloggers making money with affiliate earning, he thought it made sense to amplify growth by offering them a 30% recurring commission. People like Pat Flynn contributed a lot to ConvertKit growth. Of course, affiliate programs don’t always make sense. In any case what makes sense is to understand whether your customers can also become your distributors.

ConvertKit Business Model Explained


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