7 top ideas for marketing during a recession
19 February 2009SUMMARY: The recession puts more pressure than ever on subscription conversions and renewals. We spoke with subscription marketing pros on strategies for tough economic times.
Here are their seven top ideas for adapting your marketing plan, including:
o New product development
o Pricing
o Billing procedures
o Copywriting
Everyone’s budget gets tighter during a recession. Tough economic times make it harder to sell new subscriptions and get existing customers to renew.
But you already knew this. What you might not know is that you don’t need to throw out your marketing playbook and start over. You can make small changes and try new tactics to adapt to the 2009 economy.
Find out how some online subscription veterans are adapting their strategies to the current financial environment. Here are seven ideas to consider for your 2009 marketing strategy:
Idea #1. Create new products that reflect the times
Your customers and prospects are feeling the financial pinch. Create products that help them stretch their dollars.
Zagat Survey, a restaurant and entertainment review publisher, did that. In December, the Zagat team lunched a new line of dining guides called ‘America’s Best Dining Deals.’
The guides repurposed content from their core restaurant rating and review service to highlight 200 of the best dining values in 10 major cities. They are sold for $5.95, and are promoted as a small price to pay for great savings throughout the year.
“This will save money in the long run and make your dollars go further,” says John Boris, VP Marketing.
Idea #2. Test a lower-tier membership level
Consider a “light” version of your product or lower-tier pricing for customers cutting back on expenses. You might keep them with a lighter version.
Jesse Lipson, President, ShareFile, offers a pay-per-use version of his company’s online file-sharing service to customers who cancel their subscriptions because they don’t use the service enough to justify a monthly subscription. Roughly 5% to 10% of canceling customers accept the pay-per-use plan, says Lipson.
“If they keep using the product, they’ll be more likely to re-up to the full subscription later, and we’ll continue to make some revenue from them — albeit at a lower price point,” says Lipson.
Idea #3. Review billing policies for credit card declines
Revisit your policies and procedures for credit-card billings. Marketers who use recurring billing likely will experience an increase in credit-card billing failures as customers max out their cards, consolidate debt onto fewer cards, or simply struggle to pay their bills.
Lipson recommends reviewing the following key factors: – How frequently are you retrying failed credit cards? – How many months of failed billings will you allow before cancelling customer accounts? – Are you using Visa and MasterCard’s Account Updater services to automatically fix expired or changed credit card numbers? – When failed billings occur, are you sending emails and/or posting messages in the user’s account to let them know about the failed billing? – Have you tried calling the failed billing accounts?
Idea #4. Test alternative payment systems
Consider offering alternative online payment options, such as PayPal and BillMeLater, if you experience credit-card problems. These systems let customers pay bills from a checking account.
Michael McCurdy, Director, CRM, TheLadders.com, says his team implemented BillMeLater as an option for their subscribers in January. If customers react favorably to the additional payment option, they will move forward with PayPal later in the year, he says.
Idea #5. Focus on core customers for renewals
Focus your retention efforts on your core customers, says Barry Graubart, VP Product Management, Alacra. Typically, these are 50% or 60% of your customers who get the most value out of your service and would be less satisfied with a cheaper or free alternative.
Don’t struggle to keep marginal subscribers in a down economy. For B2B content and service providers, they are the first customers to cancel subscriptions even though they get some value from your products or services. NOTE: They may be attracted by a cheaper or a free substitute.
Four tips for giving your core customers the attention they deserve:
Tip #1: Increase communication with them
Don’t assume a renewal will happen. Reach out to your best customers in advance of their renewal dates to discuss their needs and their budget situation.
Tip #2: Focus discussions on value, not price
Don’t immediately offer discounts as a renewal technique. Instead, lead with questions about the value the customer receives from your product.
Tip #3: Offer extended contracts at a fixed price
As an alternative to an immediate discount, offer customers the chance to sign two- or three-year contracts at the current subscription rate. “That gives you more predictable revenues, while helping the customer manage costs,” says Graubart.
Tip #4: Try to establish relationships with multiple users at each company
Increased communication with core customers can bring you in direct contact with additional users at each company. Then, even if the customer goes through layoffs or restructuring, you will still have some contacts for future renewals.
Idea #6. Adapt marketing messages to highlight value
It’s more important than ever to create marketing messages that stress the value customers receive from a subscription.
Torry Burdick, SVP Marketing, Mortgage Success Source, has adopted that tactic for the company’s LoanToolbox membership service. Recent messaging has positioned a LoanToolbox subscription as a critical factor for a mortgage professional’s success in the current climate and down the road.
They’ve also stressed: – Customer testimonials that recount specific dollars earned or saved as a result of being a member. – Money-back guarantee to eliminate some of the fear that may coincide with initial sign-up. “To date we have not seen an increase in refunds as a result of this change,” says Burdick.
Idea #7. Optimize your efforts through tests and measurement
Test and measure your marketing efforts now more than ever – when everyone is feeling the financial squeeze. You need to make sure you’re getting the most out of your marketing efforts.
Earlier this year, we asked subscription marketers to tell us which tests delivered the best ROI. Here are the top five tests, ranked in order of best ROI:
B2B sites:
1. Refining site structure for SEO
2. Email list cleansing to improve the quality of responses
3. Shopping-cart design/functionality tests
4. Implementation of high-end Web analytics
5. Multivariate testing of site pages
Consumer sites:
1. Multivariate testing of site pages
2. Email list cleansing to improve the quality of responses
3. Usability testing of registration page and/or shopping cart
4. Implementation of high-end Web analytics
5. Shopping-cart design/functionality tests
This article was first published by Marketing Sherpa
How to Market Subscriptions in a Down Economy: 6 Strategies That Will Bring Double-Digit Growth
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