CQ Daily Gains $200k Subscription Sales By Switching from Print to Email Delivery

CHALLENGE
Founded in 1945, Congressional Quarterly launched its first online, real-time news service in 1994 and now derives about half its revenues from online content offerings. But although the Company's an epublishing pioneer, its Daily Monitor subscription newsletter, read avidly by hundreds of Capitol Hill insiders, has resolutely published in print.

Strategic Director Bob Shew explains dryly, "It's a somewhat pricey pub. The subscription price is in the thousands, not hundreds of dollars. The potential for redistribution outside of our control is great if we email it."

But by January 2001, the Daily's Associate Publisher was under more and more economic pressure to transition the daily to an electronic format. The print edition sometimes didn't make it off the presses until 5am, and had to be hand delivered to subscribers by 7am.

And heaven help CQ if hand delivery was even a little late due to inclement weather, or the vagaries of subscriber's building security. Shew says, "If people don't get their pub by 7am, then by 7:03am our customer service people are getting phone calls." Customer Service would rush-courier out another copy. But that kind of service is very expensive.

Plus, the team at the Daily began to wonder if there might be a chance to sell more subscriptions to folks outside the beltway, but they knew that would only be possible if delivery could be instantaneous nationwide.

CAMPAIGN
In April 2001 CQ snail mailed a survey to Daily subscribers asking if they'd like to get their copies electronically as long as the copies were laid out as an exact replica of the print edition. (Subscribers favor this layout to anything else.)

Response was lukewarm at best. Shew says, "Very few, maybe 35% said 'We'd like to try this.' So it was not an overwhelming no- brainer to go forward with the project." But go forward the CQ team did.

CQ's CIO Larry Tunks was corralled into the project next and asked to find a DRM (digital rights management) program that would only allow authorized subscribers to view their copies. When asked how he made his final DRM tech selection, he laughs, "That's the magic that gives me the millions!" But he was able to reveal that he evaluated all relevant DRM technologies on three critical criteria:

1. Speed of ramp time -- CQ wanted to implement a DRM tech quickly, preferably in less than six months including customer beta testing.

2. In-house vs external deployment and management -- Tunks definitely wanted to work with a company that would manage the majority of DRM-related tech for them. Why handle a whole new tech in-house, when you can get an ASP to manage it for you?

3. The ability to separate the license from the content -- Tunks says this is hard to put into words, "but once the lightbulb goes off, people really see the value."

Most DRM tech attaches the license and security to a particular piece of content (such as a PDF file), but this ties marketing's hands when it comes to inventing unusual offerings, or extending subscriptions for "grace" periods when major clients are renegotiating contracts (or Federal agencies wait for their fiscal funds to come in.) Instead Tunks wanted to be able to sell a license and attach various content and viewing rules to it at will.

In June, after Tunks decided to go with SealedMedia's DRM technology, CQ Daily's marketing team invited a few dozen customers to beta test electronic delivery. These were chosen from the ranks of folks who had the most chronic delivery problems (often because they worked in secure buildings not open to couriers at 7am) and a few unusually "tech savvy" subscribers.

Shew says, "From June to August, we went through the learning curve with them. As we got nice positive feedback, it raised our expectations. We were all convinced we had a winner here."

Starting Monday September 3rd all issues of CQ Daily and its sister Weekly newsletter carried a series of house ads and cover wraps offering a free four-week trial to the electronic daily edition. A few days later, CQ's marketers dropped a direct postal mail campaign to a selected list of corporate public affairs officers across America with the same offer.

No one could have predicted what happened next.

After September 11th and the anthrax threats during the following weeks, several hundred CQ Daily subscribers opted to try the electronic edition, in part because often email was the only way to get their copies easily.

Shew says, "All the mail offices in Capitol Hill shut down, and the Pentagon and State Department were restricted. We made outbound calls to everyone who hadn't already asked for an electronic trial. We offered PDFs to them until the crisis was resolved. We looked like heros, while everyone else was literally hauling boxes of their publications up to the Capitol Hill metro station and standing there handing issues out for free."

But would CQ's print-loving subscribers all demand to switch back after the crisis was over?

RESULTS
By the end of November CQ had converted about 100 existing print customers to electronic, plus the Daily electronic edition had gained "well over 100 new units" from folks who'd responded to the trial offer wrappers on Weekly and passed-along Daily issues. Resulting sales were more than $200,000, and additional sales continue to trickle in.

Also customer service problems, and resulting costs, from the most problematic delivery areas were mitigated to a great extent.

While everyone admits the campaign's timing was unusually fortuitous, Tunks feels the benefits of electronic delivery were what closed sales. He explains, "The coincidence of the tragedy got people over the hump of changing from print to electronic. It's a hurdle. People have to have a compelling reason to change. But once habits changed, the benefit really shone through."

However the campaign wasn't 100% successful. Shew admits, "We maybe made 10-20 sales outside the beltway, but no real gravy." Seems a combination of anthrax fears depressing direct mail results, plus a lack of enormous interest in the niche title, dashed marketing's hopes. Maybe they'll try again.

http://www.cq.com
http://www.sealedmedia.com