About 18 months ago rumors began circulating in the content industry that longtime online subscription pioneer Hoover's was about to cease its $199 year individual subscription offer.
By midsummer it was a reality. Just as it seemed like everyone else was launching subscription offers, Hoover's shut theirs down.
The approximately 59,000 individual subscribers were told they'd have continued access to the basic data for the same price as long as they would like under a grandfather clause.
Why the timing? As Company execs explained to us back then, the individual subscriptions had not been pulling in enough revenue on their own to be worth it.
Plus, due to a lack of user authentic technology, as Executive VP Marketing Russell Secker explains, "We were finding companies buying a single personal subscription for $199 or less and then sharing the user name and password with a huge amount of usage going on in these personal deals."
In short, the marketplace was treating single subs like site licenses. It was time to profit from this trend.CAMPAIGN
In the summer of 2001, Hoover's announced that visitors had their choice of just two options: Limited free access or a company site license starting at $1,995 for five
The sales team immediately focused on a very specific niche: The small to mid-sized businesses. Why not go for bigger companies as well?
Secker says, "We decided not to try and do everything for everyone. We've tried to focus on our core attribute of being the best provider of business information for folks in a hurry who just want information at a reasonable price."
Yes, but why not target the Global 2000 and get a zillion seats sold with each single account? "We don't have guys in suits trying to sell five-six figure contracts all the time," says Secker. "Large companies not only want that personal involvement, they also want customization which is really not our current model. Also, a lot of the Global 2000 are trying to scale back and consolidate their spend with information providers right now."
Hoover's licensing team continued deals with partners such as LexisNexis, who do serve larger organizations, to carry Hoover's content as part of their feed.
Secker turned his attention to generating sales leads within the target market for his telesales team who answer the phones and email round the clock. (Even in the middle of the night in the US, there may be a potential client in Asia who needs help. There is always at least a rep or two on call.)
He invested in email direct response campaigns to targeted rented lists, but focused most of his effort on turning the Hoover's site itself into more of a lead generation device. F*ree content was a bit more limited so visitors saw more "golden key" access symbols indicating licensed members only. Secker also began to run banner campaigns on the site and ads in Hoover's f*ree email newsletters featuring no-cost trials and discounted offers.
Inspired by a workshop held by Warrillow & Co, experts in marketing to small business, Secker also began to promote the phone as a response device rather than simply relying on Web forms and email.
He says, "We learned to make sure we allow people to reach us in any way they want to do it. Small businesspeople are very individualistic. A lot of them do not want to fill out a form. They want to ask questions. They want to ask about price specifically beforehand."
By far the biggest price question turned out to be, 'I just want to use this for myself, not five people. Can you give me the same deal for a fifth of the price?'
In October 2001 Hoover's rolled out a personal subscription option all over again. This time they had authentication software in place. The new service was called 'Hoover's Lite'. (Secker notes he is still not sure about that name.)
The service was priced at twice the amount of past individual subscription offerings, because $49.95 month/$400 year is a fifth of the price of a minimum site license. However, it is not quite as useful as a site license. Lite buyers can access all the data but not all of the tools Hoover's offers to use with the data.
Aside from being a 'saved sale' for people who were not going to pop for full price no way no how, the new offering also helped reps prove how valuable the $1995 option was. Secker learned a big part of what people were buying was not just the data, but the tools to use the data.
The management team began to listen to customer comments and objections seeking ideas for more product launches. Turns out many customers complained because they could not download data from Hoover's to their own marketing and sales databases.
In May 2002, Hoover's launched it's latest subscription offering, download access. This time the price tag started at $4,995 per five-person site license.
Year over year subscription sales, including all offerings (grandfathered old individual subscribers, new site license buyers, new Lite buyers, and new download access buyers) rose by 18% from June 2001 to June 2002. As of June 30th, Hoover's had a paid subscriber base of more than 8,400 multi-seat site licenses.
Hoover's total revenue pie broke down into these slices:
Subscriptions and site licenses 77% ($6 million)
Ads & ecommerce (mainly D&B reports) 13%
Licensing to resellers 6%
Print publishing 4%
We asked if the sales reps minded the bump in incoming sales calls versus being able to presort form-generated leads for quality first. Secker says absolutely not. Sales reps found the pay-off in terms of not having to battle voicemail phone tag to reach the good leads far outweighed the time suck from lesser qualified inbound calls.
While Secker gives the sales team kudos, he notes that Hoover's brand has been invaluable to the results.
He told us about attending his first SLA (Special Library Association) conference as a new Hoover's employee last year, "I was blown away. People would come up and say, 'I love Hoover's.' It was such an unusual experience. I've never had any experience like it before."
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Subscribe page for Hoover's Lite
Our interview with John Warrillow on small businesses' attitudes
towards online shopping: