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Subscriptions Strategy: Early bird renewals generating cash

Early bird renewals generating cash

Most publishers view their publication as the company’s main asset. And although this asset won’t appear on the balance sheet, they will have an understanding of what a title is worth.

However, the company’s true asset is the publication’s readers. The value of the publication rises and falls with changes in readership. And if the publication has subscribers, the value of this asset will appear on the company’s balance sheet.

That asset is quantifiable because the subscribers have made a financial commitment — an investment — in your publication. Each subscriber is owed a certain number of issues, and has paid for these in advance.

Some publishers, both consumer and business, understand this only too well, and enjoy substantial revenue from selling various other products and services to their subscribers.

Two very good examples of this are Reader’s Digest, which sells books and music, and Fairplay, the weekly shipping magazine, which offers a portfolio of commercial shipping information that rivals Lloyds.

When a publisher has the general business acumen to establish a strong and trusting relationship with their subscribers as these two publishers have done, the resulting income can often be much greater than the income from the publication alone.

Generating cash from subscribers
It takes considerable expertise to diversify and build a business in this way. The simple way for most publishers of realising some of the asset value of subscribers to make a cash-call on their commitment. This is done by making an ‘early bird’ renewal offer.
With an early bird offer, the subscriber is offered the opportunity to renew their subscription early on, and given an incentive to do so. This incentive is usually a reduction in the price of their renewal.

Assuming your editor continually researches and provides what his or her readers want to know and your subscribers are therefore loyal to your publication, then the early bird renewal offer will generate a large response with potentially large amounts of cash. The joy is that this extra cash flow can be timed to arrive whenever you want it to.