The UK subscription industry is, like most other areas of publishing, facing many challenges. Customers today expect increasingly better deals and loyalty rates are difficult to maintain. Add to this the decline of traditional channels and the expense of new ones and you do have a challenging picture.
However, despite all this, it’s delivering growth. A recent study (Subscriptions Marketing 2009, a study produced by Wessenden Marketing in conjunction with CDS Global and InPublishing surveying 132 publishing companies in the UK, representing 938 titles.) revealed that only 9% of consumer and 8% of B2B magazine publishers felt that newsstand was performing better than subscriptions sales.
Board rooms across the industry are recognising the value of subscriptions more and more. Here’s why:
* Increased frequency of purchase. The average number of issues purchased on the newsstand is less than seven per year for monthly magazines. When you turn your customers to subscribers, not only do they buy all twelve issues, but you are very likely to keep them as a customer for many years after.
* Recession proof. During the last couple of years, subscriptions haven’t been as negatively affected by the economic climate as advertising and other publishing revenues. And with subscribers paying upfront, it helps a company’s cash flow. It is for this reason that investors in PLCs like to see subscription revenues as a separate KPI and consider subscriptions growth as a real positive factor, as they improve share prices for corporations.
* Measurability. Subscriptions marketing investment can be tracked to the last penny. Marginal returns are closely monitored, and channels returning a lower margin can be cut out immediately.
* Better customer insight. We can name all of our subscribers, write to them as we have full address details, and say what socio-economic group they belong to. Additionally, we have a complete purchase history of their relationship with our company. It is for this reason that we can cross-sell them and up-sell them more products and services, turning them into a more attractive audience.
So those are the benefits of subscriptions, but what is it that’s driving this great performance?
Online, online, online
Online subscriptions at IPC Media have grown by 33% since the start of 2010. It is now our greatest source of new business and it generates orders at a significantly better return than all other channels. Having talked to other publishers, there is an agreement in the subscriptions industry that online is still our greatest opportunity. Here’s what you should be doing to drive the success of this channel:
1. Your website
If you haven’t done so, run a usability study to try to understand how you can make the purchasing process easier for your customers. At IPC, we changed our basket process, reduced the number of clicks and our conversions have increased dramatically. But the process doesn’t finish there. You have to keep monitoring where basket abandonment happens, and continue to make changes to improve conversion rates.
Shopping cart abandonment is an epidemic in online retailing, with some companies reporting that more than 60% of checkouts end without a conversion. Preventing even a small percentage of these abandoned carts would significantly improve revenues and profits.
Get your calculator out – just think what your uplift in revenue and profit would be if you improved your conversion rates just by one percentage point. Once you understand the impact this can have, I am confident you would want to channel some of your marketing investment to this enterprise.
2. Increase traffic
Once you have optimised your conversion rate, you will want to drive more people to your website. The options available to increase traffic are unlimited, but my suggestion is to focus on the following:
* Get more from your content (or magazine) sites. You need to make the most of the traffic on your brand’s website by ensuring users visit your online subscription shop. At IPC, we have done significant testing and have found that banners on our magazines’ websites are essential for driving subscription orders. Although orders sometimes can’t be tracked directly to these banners, when they are removed, overall orders through the website drop significantly. For example, on countrylife.co.uk, we increased orders by 34% in a given week by increasing the number of banner impressions given to subscriptions, although none of these sales came from the actual banners!
And a basic point, when our promotions are pushed below the fold on our magazine sites, the traffic directly to our subscription shop (and therefore the number of orders) declines significantly.
* Search engine optimisation. To gain share in a very competitive market, it’s essential to maximise SEO traffic. There are many resources to help you do this, but as marketers it is important that we remember to write copy in a way that will meet this objective, together with creating partnerships that will send links to your websites. Ah, and don’t forget to list your sites in online directories. Even if some of them charge a little bit for the listing, in my experience it’s a worthwhile investment.
* Pay per click. The PPC world has become increasingly competitive with many of us bidding for generic terms, such as ‘magazine subscriptions’. You need to establish how much can you afford to pay as a maximum for traffic generated by those precious keywords, and then try to maximise your volume. My advice is to find a good agency to manage your PPC activity – in my experience they justify their cost.
3. Email marketing
At IPC, we have found that very targeted email marketing messages, based on all the information we hold for subscribers, is much more effective. We refer to them as dynamic emails and our record is an email that had 558 different versions!
4. Offline marketing
Don’t forget to promote your website on all your print marketing. We all push millions of marketing pieces a year and mentioning your website can create enormous awareness and generate more traffic.
5. Test, test, test
The subscriptions industry is (hopefully) very good at testing through offline media, but when it comes to online, I am not sure that we are as thorough. Everything you do online should be optimised. From the position of that ‘buy now’ button and the creative of your banners, to the offers and the timing of them, testing will drive your website performance, so set up your testing plan now!
6. Analytics
Analysing every aspect of online performance can be a daunting task, but it’s one that absolutely needs to be prioritised. As direct marketers, we understand the huge importance of analysis, so we need to make sure we don’t miss a trick.
Google Analytics can be used at no cost, so if you don’t have it on your site now, I would advise you to look into it right away.
Renewals
Loyalty marketing has always been a focus in the subscriptions industry, but it is becoming increasingly more important. With consumers becoming savvier and better deals being offered at acquisition, targeted marketing techniques throughout the life of the subscriber are necessary to maintain subscription life time values.
More and more publishers are measuring ‘churn rates’ as well as, or instead of, traditional renewals. The main reason is that we are losing subscribers before it gets to their traditional twelve month renewal time.
Loyalty marketing now starts from before we acquire a customer. The offer we give at acquisition will determine the life time value of our customers. So the real question for all of you marketers is: would you rather maximise your upfront response and get more customers – many of whom will cancel within the first year – or would you rather maximise your life time value by acquiring customers who are more committed to your brand? I am sure the answer to this question will be different depending on the title and campaign level, but it’s important we think about this before planning any activity.
Once you have acquired your customers, it’s all about one-to-one marketing. Renewal techniques are becoming more sophisticated, with most publications now segmenting their files based on demographics and purchase history. Do remember that your marginal acquisition cost is probably four times higher than your average and at least ten times higher than your renewal cost. Moving some of your budget from acquisition to renewal to keep more of your subscribers may be an opportunity for your title.
More customer-driven marketing
Many of us are starting to venture into the world of CRM, channelling our marketing efforts in a way that works for the customer and not just for the company.
This is manifesting itself in an increase in personalisation (often referred to as targeting) across all channels. And personalisation works - online and offline. Every time we have tested it, it has driven response. So whether it is personalising your website, email marketing or your renewal offers and creative, detailed analysis will be required to find your segments for personalisation, so get cracking on it now.
The ultimate personalisation is to get your editorial teams to do the marketing for you, without, of course, compromising the integrity of your magazine. They can make subscribers feel special and part of an exclusive club, so get your editorial teams on your side and the renewals will roll in on their own!
Final words
Targeting new and existing customers with tailored direct marketing and having a strategy to maximise the opportunities of the web are, in my view, critical to achieving success in the subscriptions business. Direct marketing will also become increasingly important, as more companies turn to the pure measurability it offers to drive their business. Subscription departments are very well placed within publishing companies to excel in these areas and I have no doubt that they will continue to increase their contributions.
