Here comes the upturn!
What do publishers do when things are going well? Surely no practical business person would ignore such a vital source of income as subscriptions? Wrong! Letâ€™s look at what happens.
The publisher of a consumer magazine has three main revenue streams available: newstrade, advertisements and subscriptions. So there is an excuse (perhaps) for them to overlook one of these revenue streams when planning their marketing and investment expenditure.
But most business magazine publishers donâ€™t have the option of selling through the newstrade. They must rely on advertisements and subscriptions only. So most of us will agree that building a valuable subscriber base is vital to the long-term stability of a business title.
However, when advertising is on the upturn a publisher doesnâ€™t appreciate the need to invest in bringing in paid subscribers. This lack of forward planning is usually due to ignorance. Depending on whether the publisher came up through the sales or editorial route, the concept of â€˜marketingâ€™ is viewed as either another word for selling, or a bit of a mystery.
The first step – getting support from the directors
Direct marketing combines both science and art, so itâ€™s bound to appear daunting to those who are new to the idea. Creating an effective and persuasive promotional program to attract long-term, profitable subscribers is a specialist task and the expertise just doesnâ€™t exist in most companies.
Even the biggest publishing houses delegate (or should I say abdicate?) their direct marketing to junior managers and executives who have huge collective responsibility but little or no authority or budgets. They certainly have very little money for creating a profit-generating promotional program, because their directors canâ€™t see the need.
Your first step, therefore, is to get the support of your managing director.
Advertising vs circulation
To convert a magazine from free to paid is to change the way a magazine is published. So it needs the full support of the companyâ€™s senior management.
Those responsible for advertisement revenue often fear that circulation will drop and advertisement bookings will suffer. However, this rarely happens in practice. What happens when paid subscribers replace free ones is:
â€¢ Money is saved on production costs
â€¢ Response to advertisements increases, improving the magazineâ€™s position in the market
â€¢ Page yields increase as advertisers pay more for paid-circulation titles
â€¢ Subscription revenue lifts profits to new levels, year on year
â€¢ Revenue from sales of ancillary products such as newsletters, reports and conferences increases, as paid subscribers respond in larger numbers
The way you keep advertisers informed and â€˜on boardâ€™ is the key to success. Market support for the new strategy is achieved when the whole ad sales team understands the process and knows how to communicate the changes to the market. Ensuring the right message is delivered throughout your company and market is a job for the managing director, not the subscriptions marketing manager.
Planning the conversion
Have you ever seen a controlled circulation publication run a subscription offer before launch to build some circulation revenue?
As pre-launch marketing mostly pays for itself, you would think it obvious to bring in the money when itâ€™s easiest to collect. Most publishers however havenâ€™t even taken the first step towards finding out what kind of marketing investment is required. Below are some basic calculations to help assess the cost.
There are two ways to convert from free to paid-for. The first way is to announce to your market that free copies are no longer available and invite readers to pay for their subscription. This takes a fair bit of convincing and your tactics, and the persuasiveness of your promotions, are crucial.
Fortunately, there is no need to re-invent the wheel because most of the procedures are already established. You will, however, have to pay for this advice and build the cost into your budget. â€˜Turning aroundâ€™ a struggling magazine has never been quick or cheap.
Those of you who have seen a conversion promotion â€“ invariably a direct mail pack â€“ will know that they often appeal to the readerâ€™s emotions. As I sit here and re-read one of the first promotions I was involved with, I actually find it difficult to resist. If I had been a reader at the time I would have subscribed rather than let the editor down.
The second popular method of conversion is to segment your market and treat each in a different way. Here are three common segments. Each is based on their value to advertisers:
Core readers who receive every copy either electronically or through the post
Secondary readers who are either converted to electronic delivery, placed on a rotated circulation list to receive occasional copies, or pay for their subscription
Non-essential readers who must pay to receive their subscription
While core readers are vital, secondary and non-essential readers can usually be tempted to pay for their subscription with the right approach.
Clearly itâ€™s important to divide and keep the three lists distinct. They need to be de-duped prior to the dispatch of each issue and time must be allowed for this process.
Once you tell a reader he can no longer receive a free copy of your magazine, you cannot then send him a copy unless he pays for it. Once you have broken this rule, youâ€™ll find it difficult to convince your readers to pay up, no matter how good the deal you are offering. Unfortunately, this is quite a common trap to fall into.
Itâ€™s important to have effective software to maintain the different segmented mailing lists you create. Any overlap in the segments will reduce response to your conversion effort. As free magazine mailing lists are often not the publisherâ€™s first priority, expert help in this area is useful.
Time and budgets
The industry standard for marketing production is to spend a pound to get a pound back. Profits occur in year two and beyond. You also must factor in the cost of creating your subscription promotions and strategy plan for your particular market.
Promotions can be sent by email, post, inserted in other magazines and put on the home page of your website. Once your magazine is up and running, you can run your promotion as a loose insert within its pages. But be warned that after launch, response drops dramatically. So promotional activity prior to launch will bring in the best results. The timetable for the conversion should be in your strategy document.
For established magazines the procedure is as follows:
1. Time: increasing a magazineâ€™s profitability is usually a long
process. You should allocate around three months to allow for the testing of new business and conversion promotions to see what revenue can be achieved from available lists.
2. Revenue: an upgrading program should be introduced to increase revenue
received from each new, current and renewing subscriber. Typical products to sell to subscribers are reports, books, newsletters, seminars, workshops and consultancy.
3. Budgets: you will need to allocate a budget to cover two areas:
(a) The strategic marketing and creative advice for the conversion (b) Marketing production costs, such as printing and dispatching your promotions.
Strategic advice will include how to avoid advertisers jumping ship and how to convert your core readers to accepting ezine format rather than delivery by post.
The new subscription revenue you receive from the 3-month testing period should cover your marketing production costs over this period.
Reaping the benefits
The benefits of conversion are significant, which is why so many publishers are thinking of converting their titles. Most publishers find itâ€™s worth taking the first step and commissioning a feasibility study showing where you are now, what a realistic paid circulation target is, and what is needed to reach the target.
The upside is that all publishers I know who have decided to convert readers have succeeded. As with most direct marketing processes, the downside is manageable.
If your early tests show your readers arenâ€™t prepared to pay your price for your product there are other courses you can take: relaunch your publication with more interesting editorial; test various cover prices to see what they will pay; publish a ‘hybrid’ title, part paid-for and part free (this can be very lucrative); or maintain your magazine as a free publication. You should see significant extra revenue whatever you decide.
Subscriptions marketing: confidential information for sale, with four special reports free of charge
The Subscriptions Strategy newsletter publishes international case studies of â€˜best practiceâ€™ marketing for the Internet, websites, newsletters, books and magazines etc.
As publishers ourselves, we live or die by results. If a promotion doesn’t work, we lose money. If it works we record the results and use it on our own, and our clientsâ€™ websites and publications.
Every issue of the Subscriptions Strategy newsletter carries examples of successful marketing.
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As far as we are concerned, our testing means the difficult and costly part is over. As far as you are concerned, you can benefit from this tried and tested knowledge because the risk of failure has been removed and profitability is assured.
You will also find Subscriptions Strategy a great resource for training staff in all aspects of subscriptions marketing.
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