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Feb 03, 2006
Case Study

How to Grow Paid Subscriptions 20% Every Year, Despite Loads of Lower-Priced Competitors

SUMMARY: Despite a welter of cheaper (not to mention free) competitors, BaseballHQ.com has grown paid online subs by 20%-25% every year for a solid decade. In our exclusive Case Study, Publisher Ron Shandler reveals the content strategy and multi-channel marketing tactics that work best. Worth noting, Shandler's prior experience in the world of print publication marketing is one of the keys to his success. Yes, includes creative samples to inspire you.
CHALLENGE
Can a print publisher make it in the online world?

Ron Shandler, Editor and Publisher Shandler Enterprises, launched his first sports statistics newsletter back in the mid-1980s more as a hobby than anything else. His day job was as a marketer for a subscription publisher, and he wanted to see if he could apply what he was learning on the job to his own newsletter.

By 1990, he'd quit his day job. Plus, he'd learned focused niche editorial sells more subscriptions than broad content, so he upped his page count to a fat 24 pages while narrowing coverage to just baseball stats for fantasy sport players. He also launched a print annual book to bring in ancillary revenues.

The company grew strongly enough to weather the baseball strike of 1994 and even acquire a competing twice-weekly fax subscription service.

And when the Web began to take off in 1996, Shandler Entreprises was one of the first print publishers to test offering online subscriptions. The idea: Combine the depth of the $59 print monthly with the currency of the $59 fax publication to create a Web site priced at $99 per year.

Within nine months, online subscriptions surpassed print. That's when the trouble began. Suddenly the Web was flooded with cheaper (even free) and more famous (think ESPN) competitors. Could a small print-born publisher stay afloat for long?

CAMPAIGN
Shandler's team focused on three specific areas to win online: Content, marketing and revenue-maximization. In each area, they applied a unique spin of online smarts mixed with print-publishing wisdom:

-> #1. Content is king

Shandler knew from his marketing background in print subscription newsletters that competiting titles with low-priced, low-quality content would not be able to retain high subscription levels over time. The real way to build a decade's worth of profits was to create must-have content that subscribers can't help but renew to year after year.

Three specific tactics:

o Recruit more than 30 passionate freelance writers

“One of the biggest differences from our competitors, especially the major media ones like ESPN or CBS Sportsline, is that we don’t look for journalists who have experience in fantasy baseball,” describes Shandler. “We look for good fantasy baseball players who know how to write.”

90% of BaseballHQ.com’s writers are current or former subscribers. “We’ve formed our own small community, which becomes basically a think tank and helps drive the changes we make each year and helps us evolve to better meet the needs of our subscribers -- because they were subscribers.”

Shandler points out that they are one of the few sites that pays writers in the industry. Each year, he posts a call out to subscribers for writers, and usually gets all he needs to fill the positions that way.

o Ask subscribers what they want

Strikingly few online content sites run surveys asking readers what they consider "must have" content. Shandler knew print publishers rely heavily on this tactic to keep readers involved and to decide which editorial to invest in.

So, every year, Shandler sends out a reader survey, including a list of new enhancements he’s considering and asks readers to vote and comment on them.

o Loads of new content

“Why are you even bothering unless you invest completely and unequivocally in content?” questions Shandler. He believes that a site can never have too much editorial. While the format may take on shorter story lengths or other formats to adapt to the way people read content on websites as opposed to print publications, “you can never have too much editorial, as long as you keep increasing the depth.”

That’s why Shandler has added several new feature sections to the site every single year. And during baseball season, the site is updated daily with many news articles, columnist entries, statistics and game analyses.

-> #2. Multi-channel marketing (link to samples below)

Unlike many web-based publishers who rely solely on the Net to drive traffic, Shandler leverages every media he possibly can. The more touchpoints, the more likely a baseball fan will hear of the site's brand repeatedly.

While fans may visit a free content site through a hotlink or a single mention, they're only likely to convert to paid subscribers if they have a pre-existing, repeated knowledge of the brand. So Shandler's marketing team gets the word out every way they can, including:

o Multiple search engine optimized Web sites

You need a big footprint to catch all the eyeballs you deserve online. Plus, chances are a site that's dedicated to a single conversion objective will perform better than a site that has to be a catch all messaging device. Therefore, in addition to the main subscription site, the team launched three separately branded sites:

- FantasyBaseballFriday.com: dedicated to gathering opt-ins to a free email newsletter that in turn attempts to convert readers into buyers.

- RotoHQ.com: "The Fantasy Baseball Strategy Library," a site packed with evergreen best-of content from past seasons. Roughly 20% of the content was free-access to gain hotlinks and search engine bots, and the other 80% served as teaser (headline access only). Visitors were promised 100% free access once they became paid members of BaseballHQ.com. In effect, this is promoting your premium (free gift with subscription) as a separate site.

- BaseballForecaster.com: a microsite solely focused on promoting the annual printed book Shandler Enterprises also published. Purchasers would next be cross-promoted on other company offerings.

o Offline advertising

Although offline tactics can cost far more per person reached than online, Shandler knew that that offline "touch" could have far greater long-term value to the brand. People tend to have far greater recall of well-done print ads, audio and in-person meetings than they do for the more fleeting media of online impressions.

Because Shandler Enterprises is privately held, the marketing team were allowed to invest in offline tactics that might not always pay off in the same fiscal quarter but certainly would grow in impact as they touched the same fans over the years. These tactics included:

- A syndicated hour-long radio show
- Print ads in magazines
- Postal direct mail to past purchasers
- "First Pitch Forums," an annual eight-city road tour with half a day's worth of speakers and tabletop exhibits

-> 3. Maximize Revenues

As mentioned above, even after the online subscription site took off, Shandler didn’t cease publishing his print annual. Instead he saw it as a great ancillary revenue opportunity. Baseball fans consume a variety of paid media, why limit yourself to just one.

In addition, the team maximized revenues by pouring an enormous amount of effort into renewal marketing. (Many online-trained marketers focus so much on acquiring new subscribers that renewal/loyalty tactics are backburnered. Shandler knew better.) Typical tactics included:

o Promoting auto-renewals via various discount and premium offers
o Mixing email and postal mail renewal notices (email goes first, and then postal mail serves as a mop-up action after the lower hanging fruit has been plucked by email.)



RESULTS
“Since the Internet came, it’s like Christmas now," says Shandler jubilantly.

Now in its tenth year online, the BaseballHQ.com franchise has gained roughly 20%-25% new paid subscribers every year, year after year. “If we don’t do 20% (growth) in a year, it’s a disappointment,” states Shandler. For 2005 alone, paid subscription accounts were up 24%, subscription revenues up by 22% and book sales were up by about 15%.

Last year, 10.9% of those who subscribed to the free weekly email newsletter purchased something from BaseballHQ.com. “Our typical average order size is about $70; these orders ran about $57, but were profitable overall.”

Although the syndicated radio show wasn't a measurably big success, Shandler's team learned MP3s of archived shows were the most popular content offerings for the free email newsletter. Recipients loved to click to hear Shandler speaking. So, naturally a podcast is in the works for later this year.

In direct postal mail, Shandler's marketing team have discovered print postcards featuring a single product generally get a 4.1% response rate. Self-mailer flyers, which feature several products, get a far lower 1.4% response rate. Gross sales on the flyer, however, were slightly higher, “making the difference basically a wash,” says Shandler.

The annual road tours pay for themselves, with roughly 50-100 attendees per event paying $29 per ticket. Sales of tabletop exhibits to third party exhibitors as well as BaseballHQ.com's own product sales at the events make them worthwhile. Plus, these attendees are more likely to become active evangelists for the brand and the editorial team gets to fly content ideas past what is for all intents and purposes an on-the-spot focus group.

Paid subscriptions renew at a steady at 82%. “The secret to our success,” says Shandler, is the auto-renewal option, with more than 45% of subscribers choosing it. “That’s our cream of the crop. That’s what keeps us going here.”

When asked why he has not raised the $99/year price, he says “it’s mostly comes down mortal fear.” He doesn’t think at this time it’s necessary to cross into the three-digit pricing territory when things are going so well. (And we agree, although a limited a/b test might be a good idea.)

Useful links related to this article:

Creative samples from BaseballHQ.com http://www.marketingsherpa.com/baseballhq/study.html

BaseballHQ.com http://www.baseballhq.com

See Also:

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