Let’s start where it matters and take a look at one of your subscribers – either a new one who hasn’t paid yet or an existing one that you’d like to renew. Either way, you’ve got to make this valuable commodity produce money.
The likelihood of this subscriber paying you is affected by a number of factors, most of which you control. In this article I’d like to suggest some techniques that will increase revenue at little or no cost to you.
However, before I start to explain them, I’d like you to remember that anything you plan to change should be tested first. It’s a common mistake to change something – like wording or colour or layout or even price – because it’s ‘been like that for years’, it’s ‘old fashioned’ and needs ‘freshening up’. Then the likely change is circulated amongst your colleagues for comment and everyone chucks in their twopennyworth. Rarely does a comment come back saying why change – it’s fine as it is.
Make alterations untested and you’re digging yourself into a great big hole. The hole is particularly large because you don’t know if what you did has had a negative or positive effect. And the fact that the figures – say – got better doesn’t mean that your changes were beneficial; there’s a raft of other influences that can affect results aside from the changes you made.
So you can’t afford not to test because if you don’t, you’re just wasting your investment. You may face criticism from your colleagues for spending money on a test that yields worse performance. Not so: every test result is valuable, with worsening results at least indicating the route to avoid.
A welcome pack is the essential beginning to the relationship you’re going to have with the subscriber. The speed with which the welcome letter, bill and first issue arrive can have a direct bearing on pay-up performance. The longer you take to get this out, the worse the new subscriber pay-up and (surprisingly) the lower the first year renewal percentage. So please send the subscriber something within a week of receiving the order.
This time-frame will no doubt cause your fulfilment house grief. If they can’t do this job fast enough give it to someone who can. Your priority is not how fast you can get the order keyed but how fast the subscriber receives something from you. And it doesn’t have to include an issue; a letter/bill acknowledging the order is sufficient. Why not give this job to a mailing house before it goes to the fulfilment house? Furthermore, why not have a stack of last month’s/week’s issues at the mailing house and have them send it with the letter, explaining that it’s a bonus issue as a free gift to start them off.
This generosity of spirit is bound to make the subscriber more inclined to pay.
The sooner you receive payment from the subscriber, the sooner you can cease sending bills or renewal reminders. As you begin the cycle of letters and bills/reminders, one of your options is to incentivise your request for payment. Inevitably this is either a discount or a gift. There’s no hard and fast rule about which option will perform better. Ultimately, you must test them both. However, my hunch would be that discounts usually work better than gifts, so test this first.
The downside of the discount route is the real reduction in the yield from each payment. Conversely, if you do your gift sourcing cannily, it will cost you less than the discount and have a higher perceived value.
Integral to offering the incentive is a link to time. Make sure that you specify a fixed period of time or specific date beyond which the discount or gift offer will lapse. Hopefully this adds a degree of urgency to your efforts to get paid but you must be firm about your expiry date and not extend it (you’ll teach your subscribers not to ignore you). At the same time don’t enforce the expiry date so rigidly that you lose payments – in other words if you receive a late payment, accept it gladly. And if someone calls to ask if they can still have the incentive, of course you say yes (if you disallow it, they won’t pay).
You’ll be surprised how willing people are to pay you more than you asked for.
When you prepare the documents (letter, bill or renewal reminder), include the option of allowing the subscriber to take a longer subscription period (that is, two or three years instead of the standard one). Your subscriber (whether new or renewal) has chosen your product and (we assume) wishes to continue to receive it for as long as possible at the lowest price.
The subscriber will take up your offer if you make it financially attractive enough. Be generous with your discounts (which may well make your finance director unhappy); this means offering significant discount of 30 or 40 percent, with the 3 year period giving the subscriber the deepest discount of any offer you’ve made.
|Ten tips from David Nutt
|Test, test and test again.
|Send a welcome pack asap.
|Put a time limit on every offer.
|Always include two and three year options.
|Don’t be too aggressive when chasing payment.
|Make it easy for subscribers to pay.
|With phone transactions, always have something else to sell.
|Monthly intervals between reminders is best.
|Don’t let the accounts department handle billing.
|Make the payment instruction crystal clear.
Do not be too aggressive in your attempts to collect money. Allow people time to respond, while sending gentle reminders when they don’t. In billing a new subscription, assume they’re going to pay and don’t suspend sending their regular copy straightaway.
I suggest that after you’ve sent three issues of the new subscription without being paid, you should suspend service but only after giving due warning. You should test to find the right moment to suspend sending the magazine. There is no standard point.
Make it easy for the subscriber to get the payment to you. The simplest way is a Freefone number answered by people ready to accept a credit card number at any time. For a consumer title, give people as broad a time frame as you can (you would be amazed at the times of day that subscribers suddenly want to pay you, so don’t stand in their way!). Long hours are not normally needed for a business title but if there’s any overseas element to your magazine then check out the working hours in the territories you circulate to and cover them appropriately.
For the times when your phones are not answered by a human, don’t make it too complicated. Don’t assume the subscriber has the correct reference number. Allow the subscriber record to be traced using no more than the PAF file and a surname. Don’t ask for a credit card number – most of the time you won’t get it, so ask for a phone number so that your staff can ring them back and get their details.
When your staff (or an outside company working for you) take the subscriber details over the phone, make sure that you have something else to offer. Remember, for a few brief minutes you have a captive audience that is in a paying money frame of mind. What can you offer them? At the very least, they should be given the chance to extend their subscription at a special rate (the two and three year offer as mentioned above). Maybe you have a sister magazine that can be bundled at an attractive price. (The really clever players give the subscriber a free trial to the extra magazine with no obligation to continue – and then bill them at the bundled price.)
Whatever you do, offer them something even if it’s just a book or a special report at a subscriber-only price. The name of the game is added value because you may never have such direct route to the subscriber’s mind.
How often and how many?
Although publishers in the US have tested sending communication at less than monthly intervals with some evidence of improved pay-up, it’s not something I would recommend. As we all know to our cost, the postal system in this country is so unreliable that you cannot know for certain when (or if) your letters will arrive at the subscriber’s address.
Send them at monthly intervals because if your letter and the subscriber’s payment cross, your customer service people will curse you for the angry calls and letters they’ll receive (with the general theme of ‘I paid you so why are you demanding money?’). Incidentally, customer service departments usually talk of a ‘flood’ of letters and calls which, under close questioning, turns out to be four phone calls and one letter when you’ve just sent out a hundred bills or reminders.
On the vexed question of how many bills/reminders to send, my only answer is to test. Most publishers send between four and six without any empirical knowledge of what’s best. My advice to you is (as usual) test to establish the point where the cost of writing to the subscriber exceeds the revenue generated – almost certainly this test will indicate that you’re not sending enough.
Make sure you retain control of the process; if it’s sending out bills for unpaid subscriptions, do not let your accounts department handle it because any contact with a subscriber is part of the marketing function that generally they don’t understand.
The most important aspect of writing the copy for bills and renewal reminders is clarity. You’re writing for a single reason – to get the subscriber to pay you. Keep this in your mind all the time as you prepare the letters you’re going to send with the requests for payment. Including a letter will usually improve pay-up but by all means test sending a bill on its own as part of the series. It’s a good idea to make the billing efforts look different; although you may be constrained by your computer system. At the very least you can usually vary fonts and sizes. In addition, by pre-printing part of the forms in a second colour, you can give them a visual lift.
Use an informal conversational style especially when the letter is being signed by the editor (which the first three probably should be). Put yourself in the reader’s shoes and visualise how they’d feel about receiving the letter. And remember when drafting the copy that only one person is reading it. Although the editor should sign letters at the beginning of the cycle, consider using administrative and accounts department names in the later letters.
If you include some benefit-led copy about the product, that’s fine as long as it leads to asking for money. Make the payment instruction crystal-clear: the number they should call, the operational times for it and what they should have to hand when they call. Don’t give too many options in one letter; maybe phone and via the website in one but different methods in others. If you confuse people they will give up and not respond at all.
Please check that everything functions before you send out your letters and bills/reminders; I know it sounds too obvious but make sure the fax machine isn’t about to run out of paper or toner/ink cartridge and (a very common problem) that the links between pages on the website are operational (even check for spelling mistakes on the site – I’m sure, like me, you find them all the time on even big-name sites).
I hope you’ll get some useful ideas and guidance from my suggestions. And don’t treat what you’ve read here as the last word. Better to use the material as a jumping-off point where you develop the ideas to fit your own publications and markets. And if there’s one rule I’d like you to take away from reading this article, it’s test, test and test again. Never, ever, make assumptions about the results you might expect.