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Jul 09, 2002
Case Study

Newsletter Publisher Uses $1 Teleseminar Offer to Sell $19.95 Monthly Auto-Renew Subscriptions

SUMMARY: Like most direct (postal) mail marketers Book Marketing Update's Publisher Bill Harrison says response rates have been falling for a few years now.  This January he got fed up with losing money on new customer acquisition mailings, and invented a radical new marketing campaign. Instead of asking for $200-300 for an annual print subscription, he asked for just $1 for a telemarketing seminar.  There was a catch, after 30 days all attendees would be charged $19.95 per month for a PDF newsletter subscription until they cancelled. Hear how it turned out (hint: incredibly profitably).
CHALLENGE

Publisher Bill Harrison at Bradley Communications says the classic print newsletter business model used to work beautifully for Book Marketing Update, a $227-$397 per year newsletter he acquired in 1998.

"I'd spend 10 grand on direct mail and it would bring back 30-40 grand. Unfortunately those days now seem to be long gone. My results have been steadily declining for three years. Partly it's because if you've been hammering the same lists for years, they just decline in responsiveness. Last fall I spent 12 grand on a mailing and it brought in seven grand."

With traditional direct mail exhausted, Harrison needed to find a new way to market subscriptions to his niche marketplace.

CAMPAIGN

Early last fall, Book Marketing Update Editor-in-Chief John Kremer happened to run a story about author Tom Antion who makes up to $18,000 for telephone seminars he runs from his home office and markets via his own email newsletter.

Inspired by this and the business models of web-only subscription competitors, Harrison invented new subscription marketing campaign with a teleseminar at its core and a radical change in offer:

For just $1, anyone who wanted to learn how to be a best-selling author (the top desire for Book Marketing Update's niche) could attend a how-to seminar with a famous expert. Plus, they would get two PDF issues of the regular newsletter, and password access to its extensive online archives. Then after 30 days, their credit card would be charged for $19.95 once a month until they cancelled.

Harrison explains that many subscription publishers feel uneasy about auto-renew offers such as this because it can take so long to earn back the initial cost of acquiring a subscriber. "You go negative on the front-end with such a low price, and I do not have super-deep pockets."

He mitigated the risk in four ways:

1. Limiting expenses dramatically

Harrison gave himself a budget of just $1,100 for the entire campaign. The biggest savings came from replacing his traditional direct mail package (a wrap over a sample newsletter issue) with a combination of the lowest cost media for his house lists.

Prospects who had given him permission to email them, received three promotional emails. Prospects who'd revealed fax numbers received a blast fax message at just $.10 cents a piece. Prospects for whom Harrison only had snail mail addresses, got a very simple postcard.

Instead of renting outside lists, Harrison placed low-budget ($50 a piece) classified ads in several related email newsletters. (See sample copy from two ads below.)

2. Getting that $1 upfront

While the $1 did not cover costs completely, it played the critical role of making sure that prospects handed over their credit card number at the very start.

Harrison says, "I thought about making it free to get as many people in as possible, but my gut feeling was you gotta get that card number otherwise you're chasing them for it later."

3. Upselling to an annual subscription

After prospects signed up for the event, they were emailed a follow-up offer for a full-year subscription with lots more bonuses for ordering.

4. Keeping monthly subscribers on as long as possible

Rather than relying on great editorial and the power of inertia to keep month-to-month subscribers from canceling, Harrison also enticed them with teasers about upcoming teleseminars they could attend over the next three months.

Harrison's inventiveness did not stop there; he also decided to radically change the way his company accepted orders.

Although Book Marketing Update has its own Web site, Harrison did not push that URL in the $1 promotions. Instead every marketing piece said, "For free details, email us at Teleseminar104@rtir.com"

The email address changed depending on the list and marketing piece so Harrison could track results from each. (See below for tech recommendations.)

As a test, Harrison also put a toll-free phone number in addition to the email address on half of the postcards sent. Callers heard a pre-recorded message saying, "Thank you for calling. Please leave your email address at the tone and we'll get right back to you."

In both cases, the email addresses were added to an autoresponder that sent them an immediate text-email note from Customer Service. The note featured a link to the Web site where they could register and pay for the teleseminar. They also received two follow-up emails, one 72 hours out from the event, and one 24 hours prior to the event.

Harrison had these autoresponder messages programmed so prospects who had initially come from a particular list got a special click-through link tied to his affiliate system, so he could continue to count orders by source.

(For example, if you decide to test this for yourself by emailing his autoresponder at Teleseminar104@rtir.com, you will see a link ending in "cb" indicating you came from ContentBiz, although we are not an affiliate and receive no remuneration from Harrison.)

Why require this extra step instead of sending people straight to the Web to register?

Harrison explains, "If I run a URL in an ad, I've only got one shot to sell them. However, if I put in an autoresponder address, I can do follow-ups. A lot of people do not buy on the first contact. We all know that multiple contacts result in higher sales."



RESULTS

The campaign was so profitable, that it is now a Book.

Marketing Update's new "control." (Which means all other marketing campaigns have to beat it to be considered winners.)

Harrison says, "I expected to get 100 people with 50 canceling right after the seminar. Instead we got 306 sign-ups with only 11 initial cancels."

He adds, "Only 2% of the customers went for the higher priced [annual subscription] options, but those that did gave us enough cash to make over 200% ROI on the initial promo. PLUS, then we had 295 people on the $19.95/month continuity (a $6,000 month income stream before cancels). Not bad for a $1,100 investment."

Five months after the original campaign, 54% of total new customers still remain, paying month-by-month. It is obvious that after an initial wave of cancels, the pattern shows a smaller and smaller percent cancel each month. Here's a week-by-week cancel pattern of a pool of 100 representative monthly subscribers:

Week# #Cancels That Week
===== ==================
Week 1-----------------5
Week 2-----------------2
Week 3-----------------3
Week 4-----------------6
Week 6-----------------4
Week 7-----------------6
Week 8-----------------2
Week 9-----------------6
Week 10-----------------4
Week 11-----------------2
Week 12-----------------1
Week 15-----------------1
Week 17-----------------1
Week 18-----------------3
========
Total Cancels of 100 Subs 46 (54% retention rate after 5 months)


MORE DATA:

- Harrison's creative test: Adding a toll free phone number to half of the postcards mailed also proved highly successful. He says, "We basically got double the response by offering twice as many response options."

- Email to the in-house prospect list got the highest response rate, although all tactics were profitable.

- Harrison notes that due to email overload sometimes he has found broadcast faxes can work better than email offers to the same house list. However, for this campaign he does not have useful data because he only faxed names that did not have email addresses.

- The email newsletters definitely all paid for themselves, but they did not bring in huge numbers of new subscribers (partly because the ezines in question did not have very high circulations.)

Harrison says, "A $50 ezine ad typically might have brought in 10 inquiries, three bought and stayed around for at least a month. Plus, I got 10 email addresses to promote to again, so I'm happy."

- Of the 306 paid sign-ups, 225 people or 73.5% actually attended the live event which was held from 5:30 P.M.-7 P.M. Eastern Time to accommodate East Coast authors who may work a regular full-time job elsewhere. The rest listened to the canned audio or read the transcript.

- In order to extend the campaign's success, Harrison ran a promotion offering audiotapes of the teleseminar for $1. However, to save money on replication and fulfillment, he quickly switched to offering a voicemail recorded version (you call in and listen to the entire seminar as a recorded message) and a typed transcript in PDF format.

The transcript in particular has proven very popular, because while some prospects are big audio-fans, others vastly prefer reading.

- About 10 of the new month-to-month subscribers called in to request getting printed issues instead of emailed PDFs.

However, Harrison is debating whether to switch to electronic delivery entirely because it is cheaper to fulfill. This debate is complicated by the fact that he's noticed ancillary product offer flyers inserted in the print version tend to pull more orders than the same flyers in the PDF version. Obviously more testing and number crunching is in the works.

Harrison recommends that other publishers test a teleseminar offer campaign, but notes that "one of the biggest drawbacks of a teleseminar is you're limited by the number of phone lines. The biggest bridge is 600 lines."

Last but not least, Harrison brushes off compliments about how well he did with this campaign. Instead, he prefers to talk about the smart marketers he is indebted to for ideas and inspiration, including Monique Harris of MakeYourKnowledgeSell.com, Terry Dean of NetBreakthroughs.com, Tom Antion of Antion.com, Yanik Silver of InstantSalesLetters.com, and Dan Kennedy of DanKennedy.com.

LINKS AND TECH/VENDOR RECOMMENDATIONS:

Autoresponder account: http://www.aweber.com
Affiliate software: http://www.synergyx.com
Transcription service: http://www.hiredhand.com

Teleconferencing vendor Harrison uses with 300-line bridge:
Sparks Communications (800) 799-8233

Teleconferencing vendor Antion uses with 600-line bridge:
http://www.voicetext.com


http://www.bookmarketingupdate.com


SAMPLE CREATIVE: Two ads placed in email newsletters

#1 Short version of ad:
_____________
Could your book be a bestseller? Find out for just $1 via a 90-minute telephone seminar next Wednesday, Feb. 6th on "What Bestselling Authors Do Differently" hosted by John Kremer, author of "1001 Ways to Market Your Books" and consultant to over 700 authors/publishers, including many who've made it big. For free details, email to teleseminar104@rtir.com
______________


#2 Long version of ad:
______________

Could Your Book Be a Bestseller? Find Out For Just $1.

You are invited to participate in a 90-minute telephone seminar "What Bestselling Authors Do Differently" hosted by John Kremer, author of "1001 Ways to Market Your Books" and consultant to over 700 authors/publishers, including many who have made it big. Some of things you will learn:

* Why most bestsellers are made: they do not just happen through blind luck.
* The mindset that has working for other bestselling authors.
* Strategies three authors used to create a stampede of book buyers within a one-week period.
* Biggest mistakes to avoid if you want to hit it big.

The "tele-seminar" will be held on Tuesday, March 12th from 5:30 P.M. to 7 P.M. EST and free transcripts will be sent to all registrants (in case you miss the live call). You may participate for only $1.00 plus get a trial subscription to John's newsletter, Book Marketing Update (along with online access to 63 back issues). Can't make it on the 12th? Do not worry, you can get a transcript and/or audio for no extra charge. For free details, send an email to teleseminar104@rtir.com
______________
See Also:

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