Recent cross-industry surveys, such as the latest UK Customer Satisfaction Index, show leading companies like John Lewis, BUPA and Saga pushing up their satisfaction scores as they try to gain every kind of competitive advantage in difficult trading conditions. These trends are also evident in the magazine industry’s own Subscriber Service Survey.
What is the Subscriber Service Survey?
The Subscriber Service Survey continues to be managed by Dovetail; Demographix provide the online survey tools and Wessenden Marketing the detailed analysis. The survey has grown from its start-point in 2007 as an internal Dovetail initiative with five of our own clients into an annual, industry-wide project. Now in its fourth year, 58 publishers with 472 titles participated, polling the views of a record-breaking 150,000 active magazine subscribers. This makes it the biggest co-operative publisher project of its kind in the UK and one of the largest customer service surveys in any industry.
Measuring the brand glue
At the centre of the whole survey is a question about whether the reader is going to renew the subscription to their specific title or not.
“Renewal intention” clearly does not automatically translate into hard renewal rates, but it is still a very good indicator of the strength of the bond or the “glue” between the subscriber and the magazine. There are some key points:
* Very few people (only around 5% of subscribers) actually make a conscious decision not to renew. Most are in various degrees of indecision with 76% genuinely intending to continue with their subscription (“definitely renew” + “probably renew”).
* The more uncertain they are about renewing, the more impact that the quality of the subscription service has on their likelihood of renewing.
* Renewal intentions vary massively from title to title, from a high of 95% to a low of just 41%. The renewal intentions by market sector are shown in the table on the next page.
We use renewal intention as a benchmark throughout the whole survey and as a way of gauging which factors are particularly important in shaping the subscriber relationship.
The top-level view of the subscription
There are a number of agreement statements which dig into the general process of subscribing to a magazine. Is subscribing easy and user-friendly? Does subscribing make readers feel that they are getting special treatment? Is subscribing preferable to buying from retail? On all these key questions, the scores in this latest survey are now much weaker than previously. The overall impression is that the whole idea of a subscription is losing some its appeal. Add in specific elements of the subscription service – for example, far fewer subscribers are finding the long wait for the delivery of the first issue to be acceptable – and there are some big issues facing the whole industry about how to market and shape the whole subscription offer to a consumer who is becoming increasingly demanding in an online world.
The top-level view of problem resolution
We then go down a level in the survey and look at the detailed mechanics of the subscription service itself, specifically when things go wrong. The immediate, top-level view is that:
* A small (12.8%), but rising (+1.0%) proportion of subscribers have had problems with their subscription over the last 12 months.
* More subscribers are reporting these problems than a year ago (rising from 63% last year to 68% this year) as consumers become more demanding and critical.
* Satisfaction with problem resolution is holding steady year-on-year. Yet, fail to satisfy the consumer and that has a dramatic impact on renewal intentions. 85% of consumers who were “very satisfied” with their problem resolution intend to renew their subscription as opposed to only 27% who were “very dissatisfied”. If ever there was any doubt, these figures demonstrate just how critical first-rate customer service actually is.
The bottom-up view of problem resolution
The survey also takes subscribers through a much more detailed, bottom-up approach to the subscriber service as we lead them through over 30 situations where the initial service could have failed, from late delivery of the subscription (by far the most common complaint with 10.4% of subscribers claiming that this has happened within the last year) through to missing gifts and supplements and onto incorrect credit card deductions and the tone of the telephone staff. This much more detailed and prompted process produces slightly different results from the top-down approach:
* Problem incidence levels rise. When prompted, subscribers recall more of the detail of past incidents.
* Reporting levels drop. If the initial problem had been “back-of-mind”, they clearly would not have reported it.
* Problem resolution satisfaction levels rise. When they think through what actually happened, they seem to realise that the problem was sorted out better than they had originally recalled.
So, how do we make sense of the two different perspectives – the top-down and the bottom-up? The impression seems to be that for most of the time, the magazine subscription service is very “back-of-mind” as far as subscribers are concerned. It works tolerably well, but does not impress in the way that an Amazon or a LOVEFiLM does. It is just all a bit boring. Yet dig deeper and prompt consumers to examine the service in more detail and there are actually more little niggles beneath the surface than they recalled. Many of these niggles relate to Royal Mail delivery and the consumer seems to understand this and to make allowances for that. Yet consumers are – quite rightly – unforgiving about slow, poor or rude customer service and these are the areas that we track in great detail through this survey with the aim of improving what we do wherever we can.
Tracking the subscription journey
An important part of the survey is putting customer service into the broader context of the subscriber journey...
* Pre-Subscription Contact
The survey shows that 73% of active subscribers had been buying the magazine from retail before they subscribed to it, with an average retail purchasing frequency of 7.6 issues out of 12 for a monthly magazine. Interestingly, it does not seem to make much difference to renewal intentions whether they had been buying it before or not, or for how long they had been buying it. What does make a massive difference is how often they had been buying it: high-frequency retail buyers morph happily and easily into high-renewing subscribers. An obvious word of warning here: publishers need to be wary of converting regular and profitable newsstand buyers into discounted (and, therefore, less profitable) subscribers – a good understanding of the relative lifetime values of retail and subscription buyers is essential.
* Subscription Start-Up
How easy it is to sign-up appears to colour the consumer’s whole view of the subscription service. How they pay is largely irrelevant. Direct debit locks subscribers in because of the mechanism, but they are actually no more loyal or committed to the magazine than credit card or cheque payers. Predictably, the reason why they subscribed in the first place (price discount, free gift, added value or service) is massively important. So, the subscription model employed by a magazine has predictable renewal levels already built into it.
* Subscription Service
This is the core of the whole survey with the overall service quality (which encompasses all the facets of the service including Royal Mail, the fulfilment bureau, the quality of polywrap materials, suitability of any gifts, etc) having by far the biggest impact on renewal intentions. Also important is the speed of the first issue delivery – an area that seems to be growing in importance, presumably as internet-ordering generally becomes faster and easier. The length of time subscribing (edging up to 25 months in this year’s survey) is another key factor and one that we shall be focusing on more with Dovetail’s own clients when we discuss their marketing plans – only 58% of readers who have subscribed for under 6 months intend to renew as opposed to 88% for 4+ year subscribers. Getting subscribers through the “nursery” period is a growing priority.
* Subscription Renewal
Renewing is not difficult, but it is not as slick and streamlined as it could be. The relevance and timing of the renewal efforts register solid scores. The whole area of renewal pricing is a complex one, but the overall impression is that subscribers are very aware that better prices are often given to new subscribers rather than to loyal renewers. This does not seem to impact massively on their intention to renew, but it clearly does on how they renew and whether they get distracted along the way in the renewal process itself and do not eventually convert their intention into an actual renewal at the end of it all.
The growing digital dimension
The survey has always tracked the usage of self-service websites, which is gradually rising. A new dimension to the digital service has been added to this year’s survey and relates to the penetration of ereaders and what they are currently being used for. This is a massive topic in its own right, but a few headlines to give a flavour of the detail... The penetration of electronic devices on which subscribers can read books, newspapers or magazines is 13% of the active magazine subscribers in the survey. There are significant differences by both age and gender which are driving the penetration levels seen by each title. For example, Computing and Men’s Lifestyle titles have the highest penetration levels (19%) and Women’s Weeklies the lowest (5%).
* When asked whether they wanted a digital version of their current print magazine (either instead of or as well as the print version), only 25% said yes – a fairly luke-warm response.
* Of those who said yes to a digital version, the majority (74%) still wanted the print edition as well.
* In addition, very few would pay extra to have this print + digital bundle.
So, while the penetration of ereader hardware is growing rapidly, the usage of digital editions of magazines is increasing more slowly and consumers seem loathe to pay very much for this new digital dimension to their magazine consumption. The digital dawn has definitely arrived, but not quite with the flourish or the immediate financial payback that publishers would like to see.
Yet this whole area is much more complex than these simple headlines imply and the situation varies a great deal from market to market. We shall be discussing with our clients how best to gauge the digital potential for their own portfolio of titles.
So what does it all mean?
While standards of subscriber customer service remain high and are holding up across our industry, there are areas where we still need to improve. Yet of more concern is a deeper issue about the value and attractiveness of the magazine subscription itself. Digital editions may well help to enhance the magazine subscription package, but they are not a “silver bullet” and raise a whole new set of marketing and pricing issues in their own right. What the Subscriber Service Survey provides is a practical framework for creating marketing strategies that work in the real world.
For a free copy of the full report go to www.dovetailservices.com
For more information about the survey, please contact Ranj Lall (ranj.lall@dovetailservices.com / 01795 414510) or Jim Bilton (jim@wessenden.com / 01483 421690).
To sign up to take part in the 2011 survey please register your interest at www.demographix.com/dovetail2011
