How to Launch a Profitable Paid Email Newsletter (Look Ma - No Ads)

CHALLENGE


When he co-founded The Friday Project in the summer of 2001 editor Paul Carr was, self-admittedly, "a complete idiot" about the publishing business.

"We were totally inept. I phoned up a friend in an agency and said, 'I've just become a publisher, how do you sell ads?' He said, 'You don't. You're in the middle of the worst advertising recession Britain's known for 30 years. You give up and you go home.'"

But Carr had already started to hire writers. "We kept meeting really interesting people who had really interesting things to say from all sides of the political spectrum. We were writing edgy satirical stuff that newspapers wouldn't write."

The resulting publication was the UK-version of Salon.com ... only funnier.

Unfortunately Salon.com wasn't profitable (and still isn't) and Carr didn't know any investors willing to fund red ink. So, he had to come up with something completely different.

To keep costs low, the team decided to publish via a text-only email, with initially nothing more than a simple, static Web site. All funds were to be funneled to getting the best writers possible to create fabulous content.

But, would consumers pay for an email newsletter subscription?

CAMPAIGN


First, of course, the team needed to gather an opt-in list of potential readers to hit up with subscription offers. They relied on three key viral tactics:

Viral tactic #1. Online petitions

Before launching an email newsletter, the team invented a petition the target audience would find extremely compelling. For The Friday Thing, which targeted bored office workers, they posted a petition to be sent to the Prime Minister asking for Friday afternoons off. The URL (no longer in use) was fittingly, letsgetitoff.com.

To launch London by London, an email service inspired by Craig's List, the team posted a petition to be sent to London's Lord Mayor asking for weekend tube times to be extended so party-going Londoners could get home more easily.

In each case, when a visitor submitted their name to the petition, the site's thank you page offered them a chance to join a fun-sounding, free email list.

Viral tactic #2. Pass-along

If your content is compelling enough, people will forward it. But would forwarding ruin chances for selling subscriptions? The key, the team felt, was in being consistently compelling with every issue.

If a friend sends you a particular article you like, you probably won't rush to subscribe to the publication it came from. However, if a friend sends you a newsletter that's must-read every single week, then you'll feel the massive hole in your email when that person misses a week.

Viral tactic #3. Bloggers

Bloggers loved The Friday Project's content. "They were quite loyal subscribers, and they felt they couldn't reproduce our paid content for nothing, and we had nothing for them to link to."

When Carr could afford a bit of Web programming, he added a content management system to the newsletters' sites in order to post one fresh story for free each week.

Given the fairly permanent nature of Blog archives, and the way many people surf blogs via search engines and links from other Blogs, Carr knew he'd do much better with Blog traffic if the link he posted never, ever went bad.

But he fretted that posting new free content each week would over time result in a large free content site -- which is the exact opposite of what you want if you hope to sell subscriptions.

He decided to reuse the old link continually. As a new weekly free story was posted, the old one rotated to a different link behind the paid barrier. Bloggers knew the link would never go bad on them, and clicks would see something guaranteed to be entertaining, if not the exact item they were referred to.

Next, Carr and company needed to turn all of this resulting free email and site readership into paid subscription buyers. He set the price fairly low -- to match what you might expect to pay when buying a round of drinks at a pub (10 pounds at first, and then 15). Then the team tested four conversion tactics:

Conversion tactic #1. A polite letter

Initially Carr says, "We didn't want to alienate readers or make the mistake of saying we're going to switch to paid." So after a few months of publishing entirely free, he sent the readership a polite note asking for donations. "I do hope you like what we've been doing. We've sort of run out of money. If anyone wants to donate 10 pounds, that would be great. You won't get anything for your money at all."

Conversion tactic #2. Some paid-only content

Loathe to upset any loyal free readers, the team next hit on the idea of putting just part of the content behind a paid readers-only barrier. "We hit on the Salon model. We'll still give free readers a massive amount of stuff, but it will be a bit less massive. The people who paid will get the good stuff. We thought, it can't fail."

Conversion tactic #3. Almost entirely paid-only content

"Let's do what every other real magazine company in the world has realized a long time ago, which is if you've got a product worth selling, if you've got professional journalists and professional writers, let's sell it."

Free readers got three week's warning, and then were cut off from the vast majority of the content.

Each week, everyone would get a teaser email (link to sample below) which was hopefully amusing enough in itself that it was both forward-to-a-friend worthy and it made one long to click to read more. But upon clicking, you'd hit the paid barrier.

Conversion tactic #4. Paids get issues sooner

For London by London, a newsletter created by compiling best-of reader contributed classifieds and Q&A each week, the team also tested offering paying readers the newest issue three days earlier than free readers got it. Plus paid readers had the joy of seeing their classifieds posted at the very top of the list.

No matter which conversion tactic worked, the offer was never recurring billing. Why this departure from standard online subscription selling practices? Chalk it up to a British hesitancy to offend anyone.

(Which we find a bit ironic, given the nature of the potentially-offensive satirical content The Friday Project publishes.)



RESULTS


"We're definitely profitable -- in money terms comfortably," says Carr, whose stated aim is to occupy the politically correct "tricky middle space in the 'worthy' / 'worth a f*ck of a lot of money'."

The viral marketing tactics worked marvelously well, pulling in tens of thousands of opt-in readers for both publications. In fact, London by London's petition became so famous that the newly elected Lord Mayor of London has actually agreed to change tube hours on weekends. (The PM said no to Friday afternoons off though.)

Posting an unchanging link for bloggers worked so well that Carr surfs outside blogs on a weekly basis emailing personal thank you notes to the heaviest traffic-senders. Plus, the site now gets more Google traffic.

Conversion tactics had mixed results...

o The polite donation request garnered 10 pound donations from roughly 3% of the free readership list.

o Putting some (but not the majority) of content behind a paid barrier failed completely, utterly, miserably. "People just accept what they get. They say, 'OK, I'm still getting enough stuff. They find it hard to justify paying for more stuff."

o Putting the vast majority of the content behind a paid barrier resulted in a 20% conversion rate for The Friday Thing, but failed for London by London because readers won't submit content if they can't see the publication. And without heaps of good reader content, no one will pay.

o Sending the issue two days early to paids worked even better than Carr expected for London by London. Conversions are also in the 20% range. At roughly 80%, renewal rates are astonishingly high for publications not using recurring billing. Carr notes that when non-renewers experience their first Friday Thing-less week, "People get really itchy, and even mad. 'Oh god, I'd forgotten! If I renew right now, can you just send me this?"

This year's price hike from 10-15 pounds didn't cause renewals to blip a bit.

Plus, the newsletters' popularity has led to more business opportunities. "We sold TV rights to Ealing Studios," says Carr. He's also hired a former Prentice Hall publisher in order to found a Friday Project print book publishing division. The first 'London by London' will arrive in bookshops across the UK next month.

Useful links related to this article:

Samples of Friday Project newsletters and renewal notes http://www.marketingsherpa.com/friday/ad.html

The Friday Project http://www.thefridayproject.co.uk

London by London http://www.londonbylondon.co.uk