10 Circulation Marketing Tips For Remaining Vibrant in a Tough Economy
It’s been a rough time for too many years already! And, while we’re beginning to see the light at the end of the tunnel (at least on the subscription side of things), publishers remain in a challenging position today. Every publisher has their own specific economic challenges and realities to face in these continually challenging times. Despite that, there are some fundamental things that you can do to weather the storm. Following are a few tips that together should help make your bottom line a little brighter.
1. Understand the economics of your business.
It should go without saying that in managing any business you need to have a firm grip on all the key indicators of that business. The basic economics of your business are critical to understanding any leverage points you may have. From a circulation marketing perspective, it’s important to clearly define whether your title is ad-driven, circ-drive or a hybrid of the two.
Regardless of where your title stands, for any circulation promotion you do, whether it’s simply an insert card or a full-blown direct mail package, I’d recommend doing a profit/loss analysis on it. You can look at your promotions on a contribution basis (i.e. promotion expense only) or on a fully-loaded basis depending on your budgetary needs. In either case, I’d recommend that you extend that analysis out at least 3 years to understand the impact renewals have on your new subscriber acquisition costs.
It’s vitally important to understand all your costs. (I like to include not only promotion cost but also in-the-mail copy costs, billing costs, “bad pay” copy costs, etc.). And if you have them, you can factor in the “positive” ancillary revenue numbers that each subscriber ultimately brings you. Some examples are list rental income, advertising income, other product sales etc. Just be careful not to double count revenue in two places, and make sure that any comparative analyses you do are on an apples-to-apples basis as well.
2. Understand and build your audience
No surprise, the first step in effective selling any product is understanding your audience. Who are they from a demographic and psychographic point of view? How about geographics? How does your magazine appeal to them? What editorial features are they most interested in reading about? If you haven’t done a subscriber study in a few years, it may be a worthwhile exercise. I’ve always found a benefit in taking results of those surveys into account in promotional copy strategies.
It’s more and more critical today to look at circulation as not only acquiring new subscribers to your magazine but also as developing and building your audience. If you’ve done a lot of direct mail prospecting over the years you know that there is a paucity of good direct responsive names available. Mailing lists have shrunk dramatically in the past 10 years or so. Building your own file of prospects becomes more important. Some ways to build prospects are through newsletter sign ups on your website, sweepstakes and other product giveaways; trade shows, consumer events, friend-get-a-friend promotions, etc. Just take care that you can qualify any of the names generated for your offer.
Once you have a list of names you can begin converting them via email (as the least costly option) or other more traditional manners.
3. Understand the price elasticity of your product
Often publishers say they can’t afford to discount their subscription rates. Costs continually are increased around us. All we have to do is look at the impact that the U.S. Postal Service has had on publishers over the past 20-plus years.
As a general rule of thumb, however, what I’ve found from years of price testing (and the experience is often borne out by others) is that price increases tend to have the effect of reducing your response by an amount equal to or greater than the increase in price. Conversely, price decreases often have the effect of increasing response more often at a rate greater than the amount of the price decrease. As an example, it’s not uncommon for a 25% price increase to result in a 25% decrease in response, while a 25% price decrease may increase response 30% or more.
The only way you tell how your own publication will react to various offers is to test price.
4. Consider selling multi-year business
Any time you have to ask a subscriber to renew is another opportunity for them to say “no”. Remember it’s human nature that we love to put off until tomorrow what we could easily do today. That really applies to renewals. How many times do your loyal customers tell you they only need one renewal notice? Fact is most subscribers need 4 or more reminders that it’s time to renew their subscriptions.
Selling a second year at the time of the order is a very cost effective way to increase not only your overall file size but also revenue and contribution levels. Generally, offering a discounted multi-year price will drive a good percentage of people to take the longer-term offer. Remember to P/L the impact as described above. You’ll save the expense of costly renewal notices and not need to replace those subscribers in year 2.
5. Look for opportunities to save money
One of the big benefits we offer clients is the ability to save money by taking advantage of our group buying base. There is a benefit in numbers! Even on your own, take the time to get three or so bids on your next promotion. Don’t forget to take into account any freight charges involved.
Another tip for smaller magazines is to use “generic” forms and envelopes for your renewals and bills. With laser technology today your messaging can more than make up for the standard look. Want some color in those packages? It’s easy to preprint colored generic forms too.
And, save money by offering special “early renewal” deals to subscribers. True “limited-time offer” promotions can be very profitable if done correctly and you’ll save the expense of those costly renewal reminders.
6. Build your email addresses files
With ever-rising costs, and the shifting use and acceptance of digital correspondence, building your own email list is critical. Consider deploying email renewals several days in advance of selecting your mailed efforts to minimize your mailing costs. Test into the use of email promotions for bills, renewals and conversion of your e-prospect lists. Like any promotion understand what your acceptable breakeven point is.
7. Mine your expires
With the high costs and reduced number of names available for direct mail prospecting, the reactivation of your old expires is important. Many publishers incorporate these names into their direct mail prospecting efforts. A more economical approach is to use your generic renewal formats to create a targeted reactivation effort. Also consider a mix of email efforts to maximize response.
When doing an expire mailing, consider matching your old names against one of a few coop databases to effectively mine those expires and reactivate buyers. Matching to these files will allow you to find which buyers have recently purchased another magazine or direct mail product. Having this information is proven to increase the likelihood that they will be in the buying mood when your offer hits their mailbox.
8. Refresh your creative
Don’t forget to update your creative efforts from time to time with new covers, a new fresher look and any other information that you have that you know the prospect will respond to.
An important reminder when doing any new promotion: “work” your promotions like the prospect will. Follow your own instructions. Check the perfs, lick and stick to make sure the glue holds, check the boxes, etc. A simple oversight uncaught can be a costly one.
9. Remember the basics of good direct response marketing
Good direct marketing remains good direct marketing. One of the most important rules I try to follow is the old “K.I.S.S.” principal. Keep it simple. Don’t overcomplicate your promotions. Don’t try to sell multiple products in the same promotion. Simply state your offer, why you’re asking them to order so early (in the case of early renewal), and how it’s a great deal for them. And don’t forget to always key (assign a keycode) to all promotions so they are readable.
10. Finally, Test, Test, Test
Someone once told me that “you can never simply cut costs as a means of attaining growth and profitability.” I firmly believe that. So often as things get rough our first inclination is to cut costs, often eliminating any new test ideas that we had planned to execute.
I’d argue that those are the last things we should cut. The way we find breakthroughs in this business is through testing. What we should be doing instead is to tighten up and fine tune our promotions to maximize their efficiencies.
What I have tried to do in my career is develop rules of thumb for testing. For instance I always used the 15% rule: 15% of any direct mail list plan volume is made up of test lists. In addition, I allocated up to 15% of my mailing volume to creative testing (any combination of price test, package test, offers tests, etc.)
Regardless of what rule of thumb you decide to incorporate into your own promotional plans, we’re fortunate that we work in an industry that allows us to have direct access to our customers. As they say, “it doesn’t matter what you or I think, what’s important is what the customer thinks and how they respond.”
Circulation Specialists, Inc.