Subscription Marketing: The More Things Change, the More They Stay the Same

As long as you’re selling to humans, you can’t go wrong with subscription marketing basics

The more I read and write about the future of magazines and subscription marketing, the more I realize that the internet continues to create a sea change for the magazine industry. When I learned the trade, I was learning what the publishing generation before me had learned, and the generation before that. Remember subscription direct-mail pieces for magazines and newsletters?

And then came the internet, and everything changed. Except for one thing: subscription marketing. The Mequoda team still teaches the fundamentals of subscription marketing at Mequoda Events, with just a few tweaks related to internet marketing.

So what are the fundamentals we teach today, still relevant from yesterday?


Subscription marketing basics: Price

I recently dug out Don’s book, Secrets of Successful Subscription Marketing, that he wrote back in the days of paper direct mail. You might think such material couldn’t possibly be relevant today, but then again, some things never change. The first of these is the art and science of pricing your product.

Who remembers this one? Don has a box full in his basement, and I have two copies. A publisher told me last year that he still refers back to this book as a reference today!

Unlike most other marketers, subscription marketers can sell the same product at different prices each time it’s purchased. Our customers buy a new subscription from us at one price, and then we can use a different price to get them to renew the first time. We might even use yet another price for the third and subsequent renewals – if we’ve hung on to them that long.

Don has identified four different subscription marketing price tactics: KISS, Introductory, Step-up, and Decoy. I’m describing them in basic terms, and I’m not addressing the packages you can offer, and the contrast pricing you can use to sell a print, web, and tablet combo. We discuss that quite a bit here on the Mequoda portal. Whatever you decide for a package, you can then apply these tactics to the package prices.

KISS: Of course, this is Keep It Simple, Stupid! Everything is the same price at every stage of buying or renewing a subscription. You don’t confuse the customers, you don’t risk having people let their subscription lapse so they can get a lower introductory price later, and no one complains about getting a different price from someone else.

KISS pricing, however, doesn’t usually maximize the overall profitability of the subscription marketing process. Here are some variations:

           KISS pricing: $18 for a new subscription, first renewal, and all subsequent renewals.

Introductory: This tactic gives brand-new subscribers a discount, because we know they’re more price sensitive than renewing customers. All subsequent renewals are sold at full price.

Introductory pricing: $12 for a new subscription, and $18 for all renewals.

Step-up: If you have a low introductory price, you can also step up gradually to your maximum price. By the time a subscriber has bought from you twice, they’re really hooked! This generates the best overall response and profitability for many publishers.

Step-up pricing: $9 for a new subscription, $12 for the first renewal, and $18 for all subsequent renewals.

Decoy: This one is more complex, and it’s one Mequoda has found highly effective in the internet era. Now that we don’t have to worry as much about print and delivery costs of print products and paper bills and notices, we can play around with terms.

This tactic rewards subscribers with a lower monthly price for a longer term. The idea is that once a customer looks at the higher prices for monthly, quarterly or six-month subscriptions, they’ll generally want to go for the longer term. In this case, since billing by email is so simple, you can even offer a monthly “subscription,” which is to say, the subscriber is billed that price every month.

Once you determine your annual subscription price, you set shorter term prices to create the appearance of choice and convenience for the subscriber … but which drives them to go for the annual subscription anyway.

Decoy pricing: $29 for a monthly subscription, $49 for a quarterly subscription, or $97 for an annual subscription.


Subscription marketing basics: Offer

Once you’ve established your pricing strategy, the next problem to solve is the offer you make in your subscription marketing campaigns and on your website. Do you give them something for free as an enticement to subscribe? Do you give them a trial subscription?

This decision has actually gotten easier in the internet era. Don invented what he calls the Offer Continuum, and in ancient times, that included 12 types of offers. Today, because we don’t do things such as “cash only” or sweepstakes offers, we’ve boiled it down to six.

Through literally decades of testing, we’ve also determined the success rate of each type of offer, which we call the response index. The most successful offer is indexed at 100, and less successful offer types will only get a certain percentage of that.

Not surprisingly, the offer that gets the best response is a soft offer, which means you give them a free issue or more to try you out. You also offer a premium, and you bill them to see if they’ll take you up on a full subscription.

The least successful offer is a hard offer, in which they pay with their credit card up front, and get nothing else – no trial, no premium. This offer delivers only 25% response compared to the #1 offer, and before the internet and email, this could still be a good strategy because it saved publishers a ton of money in mailing bills and conversion series efforts. Now, of course, that advantage has disappeared, so we don’t see much of this around anymore.

In between is the soft offer with a premium included, but the subscriber gives you a credit card number and has to contact you to cancel, instead of being billed.

Offer Continuum

Of course, subscription marketing basics include long-term calculations such as how many renewals you get from subscribers who came in on the softest offer vs. the hardest offer. That means years of testing your offers to determine which ones work for your audience and your bottom line, but this continuum is the place to start.

Subscription marketing basics: Creative

Once you’ve established your price and how you want to offer your subscription to customers, you’re ready to think about ways to entice, persuade, and convince them, whether it’s sell copy on a landing page, or an outbound email. Few subscribers ever make a decision to buy from you based solely on your price or offer!

My colleague Amanda has delved into some details of good creative in email marketing. As always, Mequoda hammers away on meeting customers’ needs and on conveying benefits instead of features.

Several examples of these strategies date back as far as subscription marketing itself – starting with the godfather of copywriting, Claude Hopkins, who advised, “Ads are based entirely on service … They cite advantages to users.”

When did he write that? 1923. Hopkins was so successful as a copywriter, the advertising agency he worked for paid him $185,000 per year. In 1907.

Amanda also wrote about telling personal stories as a sales device. Another example I use is the famous ad for the U.S. School of Music, written in 1925. It led with the headline, They Laughed When I Sat Down at the Piano. But When I Started to Play…

Even if you’ve never read this absolutely classic copy, you can guess where this one is headed: A personal story of the writer’s anguish over being musically inept, and how surprised all his friends were when his lessons from the music school paid off.

You’ll still see variations on this theme today:

1. They grinned when the waiter spoke to me in French – but their laughter changed to amazement at my reply.

2. They thought I was crazy to ship Live Maine Lobsters as far as 1,800 miles from the ocean.

3. Imagine me … holding an audience spellbound for 30 minutes!

Nope, humans never change. Neither do the fundamentals of successful subscription marketing. It never hurts to get back to basics!

In the meantime, I invite you to share ideas with me for great creative – especially if you have classic copywriting favorites.


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