Not long after Kyla Westfall joined Business Valuation Resources, LLC (BV Resources) as director of group sales & marketing in March 2002, the publisher said "he wanted us to get some new products on the table."
BV Resources started in 1995 with the launch of ‘Shannon Pratt’s Business Valuation Update’ (BV Update ) print newsletter showcasing the expertise of Owner Dr. Shannon Pratt who had previously founded one of the largest independent valuation consulting firms in the country.
By 2002, the company still published BV Update and had built out five subscription databases, but Dr. Pratt wanted more ancillary products developed -- and quickly.
“We brainstormed some new product ideas,” said Westfall. Among those ideas were two concepts for electronic newsletters, and the team decided to test two different strategies in launching them.CAMPAIGN
Given that BV Resources had only produced one print monthly newsletter up to that time, the team based the launch plan for the first enewsletter, ‘Economic Outlook Update’ (EOU), on a print-based B-to-B publishing model.
EOU, a quarterly statistics-filled newsletter, started as a print insert within the flagship newsletter BV Update. After running four samples, "to get people sucked into using it," Westfall used print insertions in BV Update and direct mail to convert readers to paying for EOU, which became electronic-only as a freestanding product.
Even though the EOU section was not specifically promoted as a separate or extra product in its first year, Westfall felt it added to the perception of the value of BV Update. This was helpful because the subscription price of BV Update was raised from $189 to $229 during that period.
Westfall used a traditional email marketing strategy in launching the second e-newsletter, called 'BV Q&A Update' (BV Q&A), a monthly. "We didn’t give out any free content before the launch," she said.
From the BV Resources corporate vantage point, the two different newsletter concepts shared three key features:
(1) They were different enough from one another editorially so that they wouldn’t cannibalize each other.
EOU was filled with big-picture government statistics, Excel tables, graphic charts, and tightly written analyses of trends in consumer confidence, gross domestic product, leading economic indicators, inflation rates and the trade deficit, among others.
BV Q&A, on the other hand, took questions from business valuation practitioners and provided "expert" answers tailored to real-world reader issues.
(2) Once they were set up, each product was designed to be produced on an ongoing basis without the addition of editorial staff. EOU was highly formatted and only needed to be refreshed with current data from the same government sources each quarter.
BV Q&A was designed by Westfall herself because it was relatively easy for her to do – and enjoyable. “I solicit questions from the readers and then I send them to one of the experts I know. I pay them each a small fee for writing an answer that varies according to the length of the response,” she said.
(3) Neither new product required Dr. Pratt’s expertise or involvement. The team understood that company growth would be hampered if it remained too dependent on one individual. By bringing in the opinions and analyses of other business valuation experts, BV Q&A Update, in particular, gives "star power" to people who might turn out to be Dr. Pratt’s successors in future years.Test 1: Economic Outlook Update
Step 1: Alina Niculita, editor of BV Update, compiled the economic data for EOU and packaged it into a quarterly four-page section that was inserted within the print BV Update newsletter. The samples of EOU didn’t increase postal costs and the production and printing costs were minimal when EOU was a ride-along with the newsletter.
Step 2: After running four quarterly editions of EOU within the monthly BV Update, Westfall launched the conversion-to-paid campaign with “a special deal” that was promoted with print inserts within BV Update (see sample).
Before the cutoff date of April 30, 2003, subscribers of BV Update could get a year’s subscription to EOU for $149. After that, the subscription price would go up to $225, where it has stayed ever since.
BV Update readers were also told that EOU would double in size in 2003, from four to eight pages and that it would be solely electronic, either as a downloadable PDF or as a zipped file with Word and Excel documents subscribers could pour directly into their reports. The benefit of online delivery was made clear: Subscribers would have “permission to quote all or part of the report in your own valuation report (with proper attribution).”
Step 3: Westfall launched an email campaign to her 20,000-name email list made up of people who subscribed to all the newsletters and databases, attended telephone conferences, or purchased a book or report.
The message was no longer about the deal but about the benefit of the product, promoted with the headline ‘Get all the economic information you need, in one convenient report’ (see sample). Print inserts in BV Update now give readers just a taste of the data. (see sample.)
Westfall attributes the strong initial response (see results) to four factors:
(1) "People had been getting it free for a year and they were sucked into using it."
(2) "The newsletter was doubling in size so it provided more statistics and information."
(3) "We made sure to price it lower than the competition."
(4) Early converters received a substantial discount.Test 2: BV Q&A Update
Step 1: Dr. Pratt had always received reader questions, which were used in BV Update’s Reader/Editor Exchange column. “But there were always more questions than we could use or that Shannon had time to answer,” said Westfall. That dilemma sparked the idea for 'BV Q&A Update,' a monthly enewsletter.
So, Westfall gathered some of the good leftover questions and organized them by topic. By working at trade shows and meeting people through Dr. Pratt, Westfall had developed a list of contacts from which she recruited an expert author panel. "There are so many different fields of study involved in business valuation that it makes a lot of sense to have experts in each one," said Westfall.
Step 2: When the editorial department declined to take on another project, saying they were too busy, Westfall was undeterred. With the help of her marketing assistant and graphic designer, Ronnie Nelson, Westfall started sending each question to one or two experts and offering a small freelance fee for the answers. "If two people respond, we can use one of them in the BV Update column," she noted.
Step 3: Westfall introduced the BV Q&A newsletter concept to prospective subscribers in an email with the headline ‘Get your questions answered.’
The email told them of the upcoming launch, with a list of topics that would be included and solicited questions with the offer of free expert advice. "A lot of these people are single practitioners, so they can’t go to the person down the hall or in the next office," she noted. The questioners receive a written copy of their own answers, even they are not subscribers—yet.
Meanwhile, the expert author who writes the response gets published as an expert, which in turn expands the universe of prominent voices in the business valuation field upon which BV Resources can draw in the future.
Step 4: The next email blast promoted subscriptions to BV Q&A at a yearly price of $209. Contrary to the EOU launch, no introductory discount or free issue was offered.
Westfall came up with the price by comparing the new product to the flagship BV Update. “I wanted the price to be over $200 because if you price it under $200 initially, even if it’s something like $189, people will think you raised it $100 when you try to jump over $200,” Westfall said.
At the same time, she realized that BV Q&A couldn’t go out at the same price as BV Update, a well-established brand priced at $229 a year.
A little later, to allow interested prospects to get a feel for BV Q&A without giving it away or forcing a one-year commitment, Westfall inserted a second button with the option to purchase a single issue for $24.95. (See sample.)
In addition to monthly email promotions for BV Q&A (see sample), Westfall runs inserts with BV Update every other month. "We don’t allow advertising inside BV Update," she said, and it was only eight months ago that the company allowed commercial ads to be inserted into the mailing envelope.
In response to Dr. Pratt’s directive to develop more ancillary products, the team grew the company’s revenue by 50% over the course of 36 months with the addition of the 'Economic Outlook Update' and 'BV Q&A Update,' along with some new database products.
ContentBiz estimates that the two enewsletters are now worth more than $100,000 in revenue, combined, on an annual basis.
The first EOU subscription sale was logged on March 31, 2003, and 264 people had subscribed by June 15th—a 15% uptake from the BV Update subscribers who had previously received it for free.
Westfall explained that all of those subscribers would have gotten the $149 promotional annual price because the deadline, originally April 30, was extended another month and people who called in to ask for the lower price were given the promotional price for a little while longer.
After 10 months of print and email marketing *without* a discount, EOU subscriptions were up to 355 as of March 2004, a net increase of 91 subscribers or 34%. By March 2005, EOU subscriptions had increased another 29% to 459, for a net gain of 104.
In comparison, the 'BV Q&A Update,' which was promoted through advertising in the BV Update and via email blasts but was not previewed with readers the way EOU was, had 100 subscribers after the first year.
"The growth rate for the two newsletters has been almost identical over the past year," said Westfall, predicting that BV Q&A’s subscriptions should at least double within a year.
The test clearly indicates, though, that the initial promotional discount and/or the free sampling gave EOU a significant startup base of 264 subscribers that has held for two years. BV Q&A doesn’t have that.
Based on these results, Westfall said she will be "promoting Q&A more in the second half." She is also considering offering prospective subscribers a one-time chance to check it out for free.Useful links related to this article
Samples of the three newsletters and promo efforts: http://www.marketingsherpa.com/bv/study.html
Business Valuation Resources LLC: http://www.bvresources.com