Publishing in a recession


Now that we are in a recession, what’s the best strategy for publishers and marketers? Here’s some subscription marketing advice we gave in the Subscriptions Strategy newsletter back in January 2008:

“If we do enter a consumer-led recession, there will be a risk that people will use price as their only marketing tool .. building brands in a recession relies on the same rules as at any other time.”

Amazingly, all the major magazine publishers have long used a cut-price marketing strategy — during the longest period of prosperity and economic growth in UK history. Now they have nowhere to go.

What went wrong? Why did they cut prices when people were well-off? And what’s the remedy?

How are you capturing names?
If you aren’t using the latest name and email address capturing techniques on your website, you are losing a lot of business. At the end of this article there is a link to show how the top Internet marketers do it.

Are you selling your magazines like airline tickets?
Monthly consumer magazine sales are dropping 10% or more each year. The big publishers respond by increasing cover prices by around 5% year on year. But it’s not working. Overall income continues to drop. Meanwhile newstrade wastage increases.

Falling sales is a problem for the marketers to solve. Unfortunately, their moves are sabotaged by bosses who ignore basic marketing principles.

Surveys always show that people are happy to order a magazine if they are told about it. A subscription promotion is a great way to catch those who (like most) don’t often browse in a newsagent. So where are all the subscription promotions telling people about the magazines they could be reading?

There aren’t any. It’s as though the magazine bosses are ashamed of what they are offering and just can’t bring themselves to ask for the proper amount of money. You see plenty of offers for cheap or free magazine subscriptions, but rarely do they mention much about the magazine’s editorial content.

That’s not subscription marketing – it’s selling stuff off cheap and any fool can do that.

Discounting may work for airline tickets, but magazines are different. You demean your product by cutting the price simply to put it in the hands of a prospect. Unless you give a very good reason for offering money off, your magazine will always be viewed as something cheap and short-term. With the recession upon us, guess what’s going to get cut from the family budget?

Publishing should have a profitable back end. We surely want long-term, committed readers we can sell other things to.

Four free reports – see below

How ‘logistics’ has replaced marketing
Good marketing isn’t easy so some publishers have simplified the job by cutting out the creative bits. Increasingly, magazines are sold via websites and the telephone. The volume of sales through these routes is rising fast, with some companies now selling most of their subscriptions via their own and third-party websites.

So the marketers and circulation people concentrate their attention on these new routes to market. That is what is keeping them busy. But when did you last see a good direct mail pack, email or web promotion? Most publisher websites don’t make money.

Where is the subscription copywriting?
The focus now is on the route to market. There is no marketing, no real subscription copywriting involved. It’s the route to market that receives all the attention and it’s a simple logistics exercise to get the order, process it and deliver the goods. Any renewals that come in a year or so down the line are processed without much effort, often automatically.

The ‘marketer’ may not be driving a delivery truck to deliver the magazine to the subscriber: he or she sits in the publishing office. But all he is doing is telling the truck driver where to go to make the delivery — no real selling is involved, as the order has probably come through without any sales effort.

This is not to say considerable effort isn’t involved in examining and adopting these new routes to market: Internet, tele-sales etc. On paper, the MDs can point to a great deal of expenditure and so claim commitment to magazine marketing. But in reality, order processing and fulfilment of cheap deals has replaced any real marketing activity – a dangerous and short-sighted strategy.

Let’s look at how cheap deals work for the airlines and why they won’t work for publishers.

What happens when you sell magazines like tickets?
The irony is that the publishers who can most afford to hire good marketers are selling their subscriptions off cheap, like airline tickets. While their advertisement sales departments are busy selling the concept of their publications to advertisers, the subscriptions marketers are not allowed to do the same to prospective readers.

Here are some average subscription discounts as a percent of full retail cover price:

Source: Wessenden Marketing

Why Internet and tele-sales dominate
Airlines sell cheap tickets via travel websites such as Ebookers and by telephone through Dial-a-Flight. Publishers do something similar through subscription sites such as http://www.letssubscribe.com (Subscriptions Marketing Ltd) and through their own sites such as http://www.myfavouritemagazines.co.uk (Future) and http://www.greatmagazines.co.uk (Emap).

But there is a vital difference between the two markets. The marketing of airline tickets is done not by the airlines but by the tourist and travel industry. The publications you see carrying ads for ticket companies feature page upon page of articles describing travel and holiday destinations. Those articles save the airlines a fortune in marketing costs.

Marketing copywriting at its best
This is marketing at its best: the Sunday Times travel section looks like editorial and the reader sees it as such. But it’s pure publicity! It’s marketing copy generated by PR companies and paid for by the holiday companies that hand out complimentary holidays to the journalists who write about them. Subscriptions marketers and copywriters don’t have the benefit of that kind of media exposure.

Does discounting as a strategy work?
Selling too cheap has nothing to do with building a business – it leads to bankruptcy. To give some idea of how far the downward pricing spiral can lead you, here is a question:

Do you know how much a flight to New York costs? Would you guess around £250 and upwards?

Wrong.

It costs just £62.99 for a return flight to New York by Northwest Airlines. That’s £31 each way. The other £176.10 is for fees and taxes.

It’s almost impossible to attract profitable customers with a price-cutting strategy. In the USA, half of the airline industry’s capacity is on carriers that have recently operated under bankruptcy court oversight.

While all this busy website and telephone activity is going on, publishers have forgotten the core marketing principles. Instead they sell cheap – and that is all they do. Any marketing that takes place is between the magazine itself and the reader, a kind of do-it-yourself approach. Publishers simply hope that the reader will get to like the magazine and won’t get around to cancelling it.

How long will your magazine subscribers stay?
As far as running a normal business is concerned, you can’t sell much to a short-term customer. It’s widely believed that subscribers on CCC (continuous credit card) payments will stay longer than others. Credit card payments are used, for example, by the online store for the National Magazine Company:

National Magazine subscriptions

But at renewal time in around two years time the subscriber’s automatic credit card subscription payments will fail, usually because the card’s expiry date has passed. So that isn’t good business.

Readers making a one-off payment by cheque or credit card will simply not renew when the time comes unless they are given a strong reason to. If you look at the average poor-quality renewal forms for most consumer magazines you will know that the reader gets little encouragement to keep on subscribing.

Those who make payment by direct debit will last longer. But there is considerable resistance to giving personal bank details and that is why many of these offers come with expensive free gifts when you sign up. Consumers, however, have learned all about low-cost ‘three issues for £1’ trials and they expect the price hike a few months down the line. When the day comes they are ready with their phones and on-line banking and cancellations are high.

It’s not easy getting new subscribers to renew at the regular price – in fact it’s one of the toughest jobs in marketing. Rather than wait for subscribers to expire, try to convert them into paying by direct debit with an early-bird promotion.

Specialist and B2B publishers – the real marketers
B2B and specialist titles take a very different approach to marketing and those are the areas where all the money is being made.

If you look at, say, Practical Fishkeeping, with 33% of circulation on subscription, you will see some pretty effective name gathering, which is the starting point for all good marketing.

Websites using this model offer a free monthly e-newsletter to those registering, which over the months builds a relationship that makes it far easer to convert that registrant to a paid customer. Promotions are sent by email, alternating with the e-newsletter.

The marketing model developed by specialist publishers is now used across various markets – it is effective selling all kinds of products from a £40 subscription to a £4,000 workshop.

Once the new subscriber is aboard, that relationship with the website continues to build. It is over and above whatever could be achieved by sending the magazine alone. An extra advantage is that more subscribers renew their paid subscription.

Some of our big consumer magazines are catching up. But many of the top selling magazines haven’t even started – the Cosmopolitan website, for example, shows little marketing input: name capturing involves completing 24 fields, which will shock most of our readers who know that asking visitors to complete more than two fields reduces response significantly. Go have a look:

Cosmopolitan magazine website
National Magazines appears to have adopted a template for its various magazine websites: Men’s Health, Runner’s World and Cosmopolitan have similar sites.

The Cosmopolitan registration page has 24 fields to complete to receive a free ‘passion pack’ and its ‘Sex News’ e-newsletter:

‘Cosmo Sex News fortnightly e-newsletter. Sex tips, mind-blowing moves, orgasm-boosting tricks, seduction secrets and relationship advice, all delivered to your desk.’

When you look at the current cut-price Cosmopolitan subscription promotions, the creative is enough to make any copywriter weep with frustration. Why sell your product for a 64% discount when you can build circulation to unseen heights simply by running extracts from sample articles?

‘Sex is a natural antihistamine and can help combat asthma and hay fever.’

‘… there’s a way to relight that fire, and it comes down to three
magic words: “shaky bridge” sex.’

As there are lots of people who would like to know a bit more about these snippets of information, you can be sure they would work well as headlines in any promotion. Cosmopolitan subscriptions stand at 38,491, just 8% of the total circulation.

Building lists – what to do with those names
What do publishers do with the names they capture from their websites? These are hot lists! If they follow the dismal lack of effort traditionally made with their direct mail names, they leave the list to fester without sending out any subscription promotions. That is, until someone shocks the MD into a creative meeting with his marketing team. The strategy to adopt is to create a sequence of strong email promotions to convert these prospects into paid subscribers.

Charge what your words are worth
If you don’t explain what’s special about your product, how can you expect to attract new readers? How can you expect them to pay a reasonable rate for a subscription? You should charge what your words are worth. Ask a subscriptions copywriter.

A four-part message to sell subscriptions fast
Here is a great example of how to build subscriptions fast using the four vital ingredients for any marketing strategy:

1. Here is the product

2. This is the price

3. This is why it is special

4. Buy it here

Four free reports – see below

5 top tips

1. It’s almost impossible to attract profitable customers with a price-cutting strategy. Sell your publication for what it’s worth

2. B2B and specialist titles take a very different approach to marketing and they are the ones making all the money on the Internet

3. The strategy to adopt is to create a sequence of strong email promotions to convert your list of website visitors into paid subscribers

4. Why sell your product for a 64% discount when you can build circulation to unseen heights simply by running extracts from sample articles?

5. If you don’t explain what’s special about your product, how can you expect to attract new readers or get them to pay a reasonable rate for a subscription?

Good luck with your marketing during this recession!

Contact me at any time for advice on a strategy to get through this recession. Believe me, a good strategy costs far less than a poor one!

hobday@subscriptionsstrategy.co.uk

Peter Hobday

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