Circulation

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Permalink Reply by Bonnie welsh on July 23, 2010 at 1:11pm

Question # 1:
You can make an estimate on the "conversion" of free to paid subscribers but it depends on a number of variables. 1) how closely targeted are the recipients of the free issues? 2) What is the "offer" that you'll use to convert them to paid. For example: What is the price you will ask for the subscription and is it a full price offer, or will it be discounted and called a "charter offer"? (Charter offers can increase response rates.) How will you make this offer? Will it be an insert card within the free issue or a cover wrap, or will you already have the adresses of the recipients of the free magazine and be able to send them direct mail piece. Once al of these question about process are answered then you can make an estimate on the possible conversion to real subscribers.

Question #2
It is an absolute bad idea to try to use Excel to manage your subscription file. A fulfillment system is quite complicated and your program has to be able to keep track of your 1) subscription liability (number of issues left to serve each subscriber), 2) Dollar liability (value of the remaining unserved issues that you have on file 3) bills and renewal mailing schedules that will select lists for subscribers that are due an effort from either bills or renewals 3) when to cut off service for non-payment. . . and much much more. If you don't have a proper fulfillment system your business and customer service can become a nightmare. I'm not aware of any freeware fulfillment progams, but there may well be some out there.

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Permalink Reply by Yisreol Ellen on July 24, 2010 at 4:08pm

Hi Bonnie,
Thanks for your reply. You sound like you know what you are talking about! That's refreshing.
Let me answer your questions.1) how closely targeted are the recipients of the free issues?
Since we are giving the magazine away in doctors ofices, the only people taking the magazine are people who suffer from memory problems and therefore really to do the exercises in our magazine. So I would say recipients of the magazine are 85% on target.
2) What is the "offer" that you'll use to convert them to paid.
The 'news-stand' price is $12.50 but we are offering a 40% reduction to $8.25. The magazine is doctor recommended and has endorsements from several leading institutions. We have one full page ad in the magazine and three smaller ads about the offer. (Do you like that idea- do you have an alternative).
Thanks,
Yisroel

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Permalink Reply by Bonnie welsh on July 26, 2010 at 1:10pm

Hi Yisreol,

I wrote quite a bit to you yesterday and thought that I’d submitted it properly, but I don’t see it posted so I’ll try again.

I agree that your recipients are pretty well targeted. So my next step would be to make an assumption about how many copies of your free issue actually get into the hands of a reader. (some copies will never see the light of day as they will either sit on a table or perhaps behind the reception desk). So let’s assume that only 60% of the copies that you ship will get into a readers hands. Then, without any specific historical data to use for your conversion rate, you would want to make a conservative estimate. I’d say about 1%. That means out of 100 copies shipped to Drs. Offices only 60 will be picked up and then only 6 will actually buy a subscription. You can run several scenarios with different response rates to see what your actual breakeven for profitability would be.

Now, about the offer. . .This would be a great opportunity to test price to see what the highest price is that you can charge before it has a detrimental effect on your response rate. I would split the press run on your free issues and use two different prices, maybe $8.25 and $9.99. Usually you would want to code these tests so that you can track them down the line, but just as long as you enter them into your fulfillment system in separate categories (or source keys) you’ll be able to keep track of your response rates by price. The only sticky thing about doing two batches at the press is that you would want to make sure that the same number of each price gets distributed. It would invalidate your price test if only a portion of one of the price tests was put into distribution, so just be mindful of that when distributing your free issues. Remember, when writing and designing your offer - make it clean and easy to understand, easy to fill out. Don't ask for any information that you don't absolutely need as it can affect your reponse rate negatively.

You asked if I had a recomendation on promoting the paid subscription. Yes, I think you would get the best response from a coverwrap on the magazine or even a "tipped-on" card on the outside of the magazine, but both of these techniques are probably too expensive for you at this point. Your ads are the most cost effective method. And regarding the ads that you place in your magazine, be sure to code each one separately so that when the orders come in, you’ll know which ad placement is the most effective. You’ll want to start accumulating data on what works for you and what doesn’t because it will guide you in future promotions. Each ad should have a separate source key that gets entered into your fulfillment system along with the subscribers name and address. This is why you need a “proper fulfillment system” so that there are fields within each subscriber’s record that can be selected and manipulated for future analysis of your marketing efforts. So now you have 2 things that you are tracking for this promotion. In addition to wanting to know and record which ad the subscriber used to place their order, you also want to know which price they responded to. You can either do this by adding a digit to the “ad placement” source key. Maybe add an “a” after the “ad placement” source key for the $8.25 price and a “b” for the $9.99 price. There are a few different way to accomplish effective coding on a test like this. If I’m making this confusing just ask and I’ll send you a sample coding structure that you might want to follow.

Other questions I have are 1) Are you going to ask for payment with order or will you send them a bill? For now I’d suggest that you only accept orders with payment but when you know for sure that you are going to be publishing this magazine on an ongoing basis, I’d offer a billing option. It can often increase your overall subscriber file when you have the ability to send bills. 2) Have you thought about a renewal series? Renewal series generally start mailing to subscribers about 6 months before they are about to expire. I know it seems early to start thinking about the 2nd year of your subscribers life but it’s not. Renewals are the most profitable source for a publisher, so you want to give it a lot of attention.
This is getting long, so I’ll stop now. Good luck!
Bonnie

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Permalink Reply by Yisreol Ellen on July 28, 2010 at 3:42pm

Hi Bonnie,
THANK YOU.
We are going to have a small call center (using five9 software) to take orders and process payments. We will not do any billing. Not now at least and unless our subscriptions are really low I don't see us offering that option.
With regards to a renewal series - we just started making the first issue (as of now we made the 40 page trial) each issues is 160 pages so it is a lot of work. But I am quite interested in learning more about this.
What should I be focusing on now to prepare me for renewals.
I have a question about fulfillment.
I was assuming that in moths 2 and 3 we would give away about 50,000 copies and from that we would have from that about 2,500 subscribers (hopefully more). Because that isn't a BIG number I was told to open an account with USPS and use magazine 3rd class postage. Do you agree?
Also- I LOVE your idea about the coding structure and would be very interested in seeing a sample of the coding structure. That was a great idea! I'm going to do $8.25 in Florida and $9.99 in California.
Last- which fulfillment system can you recommend-
Thanks so much.
Yis

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Permalink Reply by Bonnie welsh on July 28, 2010 at 4:47pm

Hi Yisreol,

Renewals - You will want to write a series of about 6 letters that ask the subscriber to renew. Each letter should be selling them on the benefits of keeping their subscription. Your first effort (letter) should give them a one time only discount off the regular subscrption price. Talk up the discount and tell them that you can only offer this discount if they renew now. Then with the following letters, tell them what they will be missing if they don't renew etc. Don't tell them in the letters how many months it is until expiration - you always want to create urgency.The expiration letter however, should say "YOU'VE JUST RECEIVED YOUR LAST ISSUE. . . unless you act now. . ." And the post expiration letter should point out that they are no longer getting the magazine. You should start saving any renewal (or billing) letters that you get from other publishers to use as a guide. There is a lot more to the psychology and timing of renews, but it wouldn't fit here. A sample mailing schedule for a monthly magazine might be:
effort #1 mail 6 months prior to expiration
effort #2 mail 3 months prior to expire
effort #3 mail 2 months pior
effort #4 mail 1 month prior
effort #5 mail at expiration (their last copy)
effort #6 send out 1 month after expiration

If you are polybagging your issues you can insert the renewal letter to ride along with the magazine.

Yes, I'd agree that you will need to mail 3rd class at this point. I'd go talk to the postmaster and get their opinion and tips on how you might save money on mailing. Was that your fulfillment question?

I will be happy to send you a sample coding structure - give me a day or two to put one together.

And finaly, I'm sorry to say that using different prices in different regions is NOT a good test. There may be a regional difference in price toleration and you won't learn anything unless you put out 2 different prices within each region. You can't test CA against FL because there are other variables at work. When setting up a test (of any kind), you want to keep as much as you can the same with only the "testing variable" (price in this case) changing. Don't worry about the fact the someone could say "Hey, why are you giving someone else a different price?". It's unlikely that anyone would ever notice, and if they did you can just explain that publishers always test price. This is why I mentioned that you'll have to be very clear with your printer instructions on how to ship the different versions of the magazine. I'd talk to your rep at athe printer and tell them what you're trying to accomplish (an even distribution of both prices to both regions). Printers have different machinery and capabilities, so your rep may have a perfect solution without you having to figure it out yourself.

About fulfillment systems - it's been many years since I've looked at in-house fulfillment systems. Let me ask around. Also, send me your email so that I can send you a coding structure. bonniewc@gmail.com

Bonnie

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