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Jun 19, 2003
Case Study

Can Email Newsletters Sell Subscriptions to Print Newsletters? HCPro's Tests & Results

SUMMARY: If email is an important part of your marketing mix, definitely check out this Case Study for notes on how to database and report on your email list names (as opposed to your regular customers).

Also includes results data on using a printed postcard mailer to gain email names, and lifetime value of email-sold versus offline-sold customers.
CHALLENGE

Back in the late 1990s,traditional print newsletter publisher HCPro started Net marketing by building a series of "Supersites" for healthcare professionals.

"It was based on the VerticalNet model, back in the days when it was cool to have a portal" explains VP Marketing Rob Stuart. The only problem was getting enough regular visitors to be worthwhile.

"We found no one wakes up in the morning and goes to HealthSafety.com." admits Stuart. "Given the choice, would you walk down the street to get the newspaper, or would you like it delivered to your door?"

In the battle between push and pull applications, it turned out push-email was the killer app.

The paid newsletter industry already felt besieged by the raft of no-cost email newsletters competing for the same marketplace and undermining the value of content itself in readers' minds.

Was it possible to publish an ezine as a marketing tactic to sell people on buying a print newsletter? "It inspired hearty debate around the office on a regular basis," says Stuart.

CAMPAIGN

HCPro's print [paid] newsletters were mainly monthly, so they could not be very newsy because by the time they were published they would have been out of date. Instead, the value came from analysis and tips relating to the month's news.

Now instead of reading and tossing news releases, HCPro's editorial staff turned the best items into quick articles for no-charge weekly ezines. "It's basically the stuff we used to throw away on the cutting room floor," explains Stuart.

"For example, a new Federal regulation might be announced in the weekly, and in the paid monthly the paid article would be 'Top 5 things you need to do to begin complying with the new rule.'"

Although the ezines were "lite" editorially compared to paid newsletters, HCPro's editorial and marketing teams treat them as they would a "real product."

For example, a formal launch proposal is required before management gives permission to start one. "We do worksheets and consider: what are the costs, who will write it, are there any selling expenses like print promotions to acquire email addresses," Stuart says.

However, they do not do initial projections on revenue, because all ezines perform in a different manner. "The assisted living market has more money than hospitals, so those will perform better."

Because ezines are considered products, reader names and stats are entered and tracked in the regular HCPro customer database just like a paid product.

This means the Company asks new readers for more information than just an email address. For example required questions may include:

Name
Job title
Number of beds in the hospital
Hospital address
Phone number
Fax number
Email address

Stuart knows he is losing some potential readers by asking for this data, but he says he would rather have 500 people willing to tell him about themselves than 750 people who are not.

"If you don't want to give me information," he explains, "then you probably don't want to buy anything."

The database produces reports tracking individuals by what they bought, which ezines they receive, and what list (or promotion) their name initially came to HCPro's ezines from. This helps Stuart determine which list building campaigns are truly profitable and which he might never use again.

His team uses four main tactics to build ezine lists:

Tactic 1. Promoting to related house lists

HCPro sends a single email promo to existing ezine lists in the same general category. "Hey, we have this new ezine on this issue. Here's why this issue might be a problem and may affect your organization. Click here if you want to sign up."

It's purely overt permission -- people have to raise their hands to get a newsletter. No ezine is ever sent to anyone until that permission is received. Nothing is ever opt-out.

Tactic 2. Direct postal mail

When they want to move aggressively into a new marketplace, Stuart's team sometimes rents targeted postal lists to send a printed double postcard to.

To reply, recipients can rip off half the card, write their email address on it, and return via reply mail. There is also a Web address where people can go to sign up.

Handwriting problems can be a factor when data entering the replies correctly, "but what are you going to do?" Stuart says.

Tactic 3. Promoting through the call center

HCPro's call center reps help gather and clean email lists.

They do not do outbound calls to get new readers because it is cost-prohibitive, but all inbound callers are asked if they would like specific no-cost ezines in their niche interest. Current readers are also asked to verify their email address in the system.

Plus, when an email address shows up as bad due to multiple bounces, it is checked against the database. If the reader has purchased from HCPro in the past, Stuart has customer service call them to check the address and see if messages may be being filtered.

The extra time and money (about $2 per phone call) is not a problem. "If I can keep the contact going with someone who has bought something from me, it's worth it," he says.

Tactic 4. Search marketing

Stuart also hired a search engine placement consultant. "If anyone is doing Internet searches on that topic, hopefully we'll turn up near the top of their results list."

Aside from regular ezine issues which contain small ads for HCPro offers, Stuart's team also send all ezine readers Blast promotions that are focused on just a single product offer such as a print newsletter, new book or a teleseminar.

The average ezine reader may get one-two promo blasts a week.

Just as with traditional DM, the marketing team test everything they think might help results, watch orders, then test again. The most critical tests are repeated every six months or so to keep on top of the pulse of the marketplace.

These tests have included:

o Text vs. HTML
o Adding graphics such as a book cover or author headshot
o Emailing a follow-up note after a DM postal mailing
o Sending a series of promotions detailing various aspects of
a particular offer, such as an upcoming teleseminar.
o Promoting an entirely different product offer in a PS
o Including a phone, fax, and physical address to reply to
o Including a "print out and fax back" order form in the email
o Including an interactive ecommerce form in the email

The one thing Stuart does not test is sending promotions to broad or secondary lists.

In fact, he takes an unusual view on the number of promotional emails he sends. His team tries to send a promotional email to *as few* people as possible, rather than to as many as they can find.

The trick is to make sure that HCPro sends offers for products those recipients definitely need and want.

This allows the marketing team to send more promotional emails a week, each reaching fewer people. Ultimately, the same total number of people are getting the same total of emails, but the offers are much more targeted.

"If you say, 'Dear Safety Officer' in your promo, you better be damn sure that they're a safety officer," Stuart says.



RESULTS

Ezines have worked so well, that HCPro currently publishes 45 of them, compared to about 35 print paid newsletters. Eight ezines are in HTML format, with an average open rate of 70%. Average opening rate on HTML promos is 27%, with a conversion rate to purchase of 0.4%.

More Results:

- HCPro finds that it is easier to sell one-off products such as reports to ezine readers than it is to sell them a subscription product "People are used to free newsletters online," Stuart says. "Even with paper, they think, 'why isn't this free?'"

This is not a price issue. Ezine readers will happily buy a one-time $200 teleseminar ticket but balk at an ongoing print newsletter for the same price.

Why not get out of the print newsletter business and become king of one-offs? It is all about lifetime value. After their first renewal, subscription buyers are incredibly profitable ongoing accounts.

- In fact, postal DM works better to sell print newsletters than ezine offers do; in terms of conversions and lifetime value.

Print-sold people renew at a better rate than ezine-sold people even though the ezine people may have had a much longer relationship with the company because they have been getting the ezine for a while.

- Double postcards to good lists can generate a 4-5% ezine list join response rate. (Stuart's technical term for this is A Big Stack, as in, "Get any of those cards back?" "Yeah, we got a big stack.")

- Combining postal plus email for a two-stage campaign is a definite winner. For instance: HCPro sent a printed mailer to a particular association list and got 16 orders. An emailed reminder to the same list a month later generated 17 additional orders.

- HTML is finally winning the battle vs. text.

"Last year, I stood up in front of everybody at NEPA and said that text outpulled HTML by a lot," Stuart says. "Not anymore. We did more tests over the course of the year, and it's the exact opposite. That's why you keep testing."

- In HTML, simple graphics, such as small author photos, book jackets, and bullet points, have increased sales from blasts.

- About 80% of people place orders electronically, but there are still 20% who call or fax their orders. Giving them the option in a blast increases response rate. Do not rely on hotlink alone.

- Blast PS's offering a different product have been successful, although offering more than one product in the main body copy of a blast has not worked because it is too distracting.

- Stuart has found that ezines are a successful way to test a new marketplace before launching new paid products. If a lot of people do not join the list, HCPro will not move ahead.

Last but not least, yes HCPro has also begun offering its paid newsletters via email. However unlike the ezines which arrive full-text in the inbox, paid newsletter readers must download an HTML file from the site or open a PDF.

A low 13% of paid newsletter subscribers have chosen this option. While the renewal rate on these accounts is a couple of points lower, it is not enough to be "horribly worrisome," Stuart says.

What about piracy? "We eventually said, 'I can't prevent someone from going to the photocopier and making copies, either,'" Stuart says.

http://www.hcpro.com
See Also:

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