Why is our subscriptions marketing so poor?

Taking a random survey of the subscription promotions accumulated during 2003 it is clear that little has changed. Most UK promotions are very poor - and there is no excuse.

I have been surveying promotions since 1993. A year or so later BRAD began to list subscriptions as a separate entry in publications’ circulation details. The main change since then has been that more publishers carry loose insert cards and other in-magazine promotions in their magazines. But insert cards and house advertisements are nothing to do with marketing. They are rarely professionally produced and merely change the way the reader receives the magazine.

But publishers have definitely learned about collecting names and addresses. Most publishers are now sitting on huge data files -- and do very little with them. Most just don’t bother to mail out subscription promotions or, if they do, they are sporadic and ineffective.

This has meant that over the years some of our most famous magazines have failed to make up lost circulation. Good Housekeeping has around 10,000 more subscriptions than it did in 1994, but has lost 76,000 newstrade readers. So overall circulation is down by an unnecessary 15 per cent.

Other big publishers send out thousands of free bulk copies when they could be selling more subscriptions. IPC’s Marie Claire, for example, distributes 16,667 bulk copies and sells 19,214 subscriptions. Just before IPC was bought out, Marie Claire could easily have overtaken Cosmopolitan to become the UK’s number one in its field by selling just 70,000 subscriptions. Think what that could have done for a company sale!

Is it fear or ignorance that holds these companies back from promoting their most attractive magazines?

The result of all this inaction is that most paid-for subscriptions for consumer and business titles are showing less than expected growth. Considering the enormous advances in marketing knowledge and education since 1993, this is a puzzling state of affairs.

Selling the benefits

Most publishers are guilty of poor or non-existent marketing. There are thousands of people, for example, who rarely visit a newsagent, but would happily subscribe to a magazine if they knew what it contained. And when was the last time you saw a convincing direct mail pack or email promotion for the business publications in your marketplace? Or even a good, creative in-magazine subscription offer?

The only decent insert to be seen this year is from Drum, a provocative and addictive little magazine that is pioneering a new technique to build names through viral marketing.

Those publications with well-established subscription generating programmes, such as the Reader’s Digest, are guilty of their own personal crime. Picking up a copy of the Digest at my mother’s house, I immediately recognised the value and energy contained in its pages. But when have we ever seen a promotion telling us about the content of this great magazine? Never. Their glitzy, offer-led direct mail packs - like those from Which?, Time and Newsweek - are a camouflage that disguises the absence of creative copywriting.

Which writers among us wouldn’t jump at the chance to construct a sizzling list of editorial benefits for any of these impressive magazines?

Increasing profits

Publishers of glossy magazines with high postage and production costs feel they are in a dilemma. Why sell thousands of subscriptions when the cover price means they are unable to charge enough to make a decent profit? The answer, as laid out below, is to introduce a programme that will double or triple the revenue you receive from each subscriber. In fact, this is what the Reader’s Digest is very good at and we can learn a great deal from its methods. You can make far more money from ancillary sales than you do from subscriptions.

Selling related products to your customers is just one way to increase revenue. As I have discovered through price tests for various publishers over the years, a reader is usually prepared to pay far more than the cover price for his personally delivered copy. All you need to do is make the right offer.

The three principles of marketing

So where did it all go wrong? Why have so many publishers failed to keep up with our expanded marketing knowledge? It appears that publishers are ignoring the basic tenets of marketing and, indeed, of business, which are:

* Talk to your prospects
* Find out what they want
* Produce and sell it to them

If business was as simple as that you would think that the impressive brains behind our business titles would see where the money is. But have you ever seen a controlled circulation publication run a subscription offer before launch to build some circulation revenue? Neither have I. If you are interested in making money, it seems an obvious thing to do: most publishers of free magazines understand that having 30 per cent or even 20 per cent of their readers as paid subscribers would transform the profitability of their magazine. Just choose one or more categories from your circulation list of potential readers and ask them to pay. The money doesn’t just come in from extra circulation, but also through your increased rate-base. You can charge advertisers more for these higher-quality, responsive subscribers. Unfortunately, the realisation invariably comes too late for effective action. Potential subscribers respond in much lower numbers after launch when there are lots of free copies around.

Freedom, status and success

When we look at BRAD or the ABC’s excellent website it is clear from the circulation figures that most publishers’ subscriptions marketing is ineffective. Otherwise the numbers would have grown two or three times since 1993. The reason, whatever the title, is usually the same - a lack of commitment from the top.

So why are some publishers producing good work, while others stand still? Those companies with creative and successful marketing departments all have one thing in common. They have a senior decision-maker who has given subscriptions marketing the same status as editorial and advertisement sales. This doesn’t just mean handing over more money. Which? magazine’s marketing, for example, is pretty weak. So is the marketing for the Economist; neither of which has produced a good benefit-led promotion in years. Most of the best work comes from companies that need to make every penny count - and these are the ones to follow.

The key to subscriptions success

So now we have shaken things up, lets apply some of the lessons we have learned through constant monitoring of the top subscriptions publishers. All publishers can use or adapt these techniques to increase revenue from their subscribers.

The first lesson is, to achieve success, a company must give its marketing people the encouragement and freedom to create and test new promotions. Fortunately this doesn’t mean inventing a string of new ideas; it’s already being done for you. Innovative and highly active publishers are constantly developing and testing techniques that are lifting response to new levels, through web, direct mail, advertisements and email promotions.

Email promotions, for example, are a very exciting area. Response is currently breaking through to new levels, as (a) new copy writing techniques are employed and (b) conventional return-on-investment restrictions don’t apply. Currently successful techniques can be adapted for almost any market. It’s just a short step from discovering what’s currently working to creating a series of promotions to successfully sell subscriptions to your own publication.

In my experience the top UK marketers are generally the smaller companies. Recent promotions that have caught my eye come from publications such as Sports Adviser, The Ecologist, History Today, Peak Performance and Sports Injury Bulletin.

Response performance

When asked to quantify the difference in performance between an ‘average’ and a ‘top performing’ promotion, publishers report increases of double the response for their best-performing direct mail pack when compared to their previous control. When queried about internet techniques, for example, Electric World plc’s Peak Performance newsletter reported a ground-breaking ten-fold increase in response for web and email promotions, confirming that this highly innovative publisher has discovered how to transform the effectiveness of internet marketing.

So what ingredients go into an effective marketing programme? I have identified five common elements:

1. Creative freedom for the marketing department
2. An understanding of what motivates the reader
3. Benefit-led promotions
4. Price testing
5. Upgrading, upselling and extending subscribers

Creative freedom

Without creative freedom, even the best marketer will fail to build many subscriptions. In this respect, subscription marketing is similar to selling advertisement space. If the publisher reduces the number of pages available for advertisements, or limits the number of calls the sales team can make, a drop in revenue results. The same applies to a magazine’s subscriptions department. If the marketer is unable to create, test and roll-out new subscription promotions, the number of subscribers and the revenue achieved will remain static or reduce each year. The more creative freedom the marketer has, the more money and profit he or she can bring in. Financial targets should be based on return on investment achieved, not some arbitrarily fixed amount to be spent through the year.

Understanding your readers

If the person writing the copy has little or no contact with his prospects, he will not be able to uncover what motivates them. He won’t be able to create – or recognise - the kind of benefit-filled copy that will strike a cord and compel prospects to respond. This is the first fundamental of marketing and the one that is most overlooked by marketers. It is the key to the exponential leaps in response witnessed by some publishers.

Price testing

If the marketer is not price testing regularly, he will not know how much the reader is prepared to pay for the information he is offering. At the moment the value people are putting on their favourite reading is changing rapidly. Current price tests show it is usually possible to increase revenue by between 10 and 100 per cent.

Upselling, upgrading and extending

Every publication should have a portfolio of extra services and products it can offer in order to upgrade subscribers and increase the revenue received from each one. Examples of products include newsletters, books, reports, seminars, exhibitions and access to specialist information through the internet. If you are still thinking in terms of ‘renewals’ you are way behind the times - top marketers ceased to talk of renewals around five years ago. All have now established programmes to upgrade and extend their subscriber’s term as soon as he or she comes aboard. This can double or treble the revenue you receive over the subscriber’s lifetime. You’ll find that with each new purchase comes a longer commitment.

Failure to get the most from your subscribers is equivalent to a shopkeeper refusing to sell a customer another product until his first purchase has worn out. And he wouldn’t be so foolish as to do that, would he?