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MarketingSherpa Email Summit 2015 - SAVE $700 - VIP PRICING ENDS THURSDAY
Mar 22, 2001
Case Study

10,000 Subscribers Pay $10 Each for

SUMMARY: Fred Langa, Publisher of LangaList, had more than 100,000 subscribers to his free email newsletter. Then the advertising market slowed down and he had to find another way to profit. Here's the details behind his successful paid subscription offering this winter.
CHALLENGE
Fred Langa, former Editorial Director of CMP's Windows Magazine, left the print media world three years ago to try his luck as an email newsletter publisher. As you might expect, his free, twice-weekly, newsletter LangaList, for consumers interested in PC hardware and software, took off like a shot.

By Fall 2000, LangaList had almost 150,000 readers. Advertising sales more than covered Langa's $30,000 per year production and fulfillment costs... but then the market fell apart.

CAMPAIGN
Luckily Langa had been deeply interested in testing a for-fee model online for a long time. In fact, the year before he had sent up a trial balloon to see if his readers would consider it. He says, "A year ago I had asked, in a crude and imprecise survey, if my readers would pay. Results were quite positive. 2/3 of respondents said 'Oh sure I'd pay for it.' But a lot of that was hot air. I didn't know what the fudge factor was to scale down to a realistic number."

So, in order to get a clearer feeling for the kind of free-to-paid conversion he could expect, Langa decided to pre-market the subscription offer prior to actually putting firm plans in place. He says, "I didn't want to build infrastructure for 50,000 and end up with 500. I also knew I needed to get a conversion of 2% just to have it be worth doing."

First he chose $10 as his annual price point because it was about half the cost of "slick professional" print competitors such as PC World. He also didn't want to be accused of greedy price gouging; or inundated with emails from readers expecting a detailed personal advice because they paid a lot for the newsletter. (Langa already gets about 800 reader emails a day.)

Langa decided the paid edition would contain the same content as the free edition, except there would be no ads and 3-4 additional articles on top of the free edition's 10 articles.

Next, Langa announced the new "PLUS!" paid service in his December 11, 2000 issue a full month before the planned launch date. (You can see a copy of his announcement note below.) From then on until launch date, each issue included a short follow-up note. To incentivize buyers, Langa offered a zip file of all past issues for orders received in the first 30 days. Langa also added a note on his Web site's home page suggesting visitors purchase gift subscriptions.

After the paid service launched January 15th 2001, Langa added a new regular section to the end of his free newsletter -- "Plus! Edition Highlights" -- which links to an order form.



RESULTS

Within the first couple of weeks of pre-publicizing the paid service, Langa passed the 2% mark, receiving enough orders to justify launching it. By the time the paid version was three months old, it had surpassed Langa's expectations. As of March 21, 2000, almost 10,000 paying subscribers have joined.

And the list is still growing. Langa says, "On the day each free newsletter issue goes out, I can count on receiving between 100-200 new paid subscribers. On interim days I'll get something like 20-30 subscriptions."

1-2% of paid orders have come in through the gift subscription offer. Not enough to make you rich, but definitely a nice ancillary revenue stream. Almost 90% of subscribers pay via credit card on the site. 10% pay through the PayPal service that's gotten so famous on eBay. Just 1-2% mail in hard copy checks. So far, just three orders have taken advantage of Langa's 30-day, money-back, cancellation guarantee.

Yes, some free subscribers did complain about the paid service. Langa says, "Some people believe everything online should be free all the time." However, these gripers were by far in the minority. Langa also allayed their concerns by openly donating a portion of his proceeds to charity.

ADVICE
Langa's words of wisdom to other publishers considering a similar move is, "There has been a lot of hesitation in trying to charge [for content] by people who are accepting as a proven maxim that people won't pay for content. I don't think that's true. People will pay for the right content. The early attempts at charging for it didn't differentiate between the free. The benefits weren't clear.

It also helps if you appeal to subscribers as a person versus a corporation. No one wants to help a corporation make more money, but if you're a human being they'll help you."

NOTE
Here's the first note Langa sent his readers about the new subscription service in his December 11, 2000 issue, where it appeared as the second article:

Announcing: "LangaList Plus! Edition" I hope you noticed two things about today's issue. First, it's the same LangaList you've come to know, with its full, normal content covering all the things the LangaList usually covers: security threats, OS and applications issues, free tools and tips, reader interaction, maybe a small grin or two, and more. Second, this newsletter is now called "The LangaList Standard Edition."

That's because, next month, I'll be launching additional versions of this newsletter and some new services, all under the heading of "LangaList Plus!"

Nothing--- except adding "Standard Edition" to the name--- is changing with this version of the newsletter. If you're happy with things just the way they are, rest easy: Nothing's changing here.

But if you *do* like what's here, you may *really* like what's in the Plus! offerings, which give you *more* of what you've come to expect, plus new options, new formats, and new services.In fact, I can think of half a dozen reasons why you might want to switch to LangaList Plus! Please click over to http://www.langa.com/plus.htm and check 'em out!
See Also:

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