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May 10, 2007
Event Wrap-up

2007 Subscription Summit Wrap-up Notes: 19 Online Content Execs Reveal Web 2.0 Tactics, Search & Testing Secrets

SUMMARY: We're back from this week’s sold-out Subscription Site Summit. Here are our top notes, including test results from Blockbuster.com, AmericanGreetings.com, Books 24x7 and 16 other marketers. Hot topics ranged from increasing customer loyalty to adding Web 2.0 to content sites. Plus, our Entrepreneur of the Year, StomperNet’s Brad Fallon.
Selling subscriptions to online content may have slipped on the Internet hype meter, supplanted by Web 2.0 and a rebounding online advertising market, but being outside the spotlight didn’t diminish the excitement among industry execs who gathered for this week’s seventh annual MarketingSherpa Selling Online Subscriptions Summit.

In fact, the event sold out six weeks in advance, and more than 200 attendees, speakers and exhibitors packed the Digital Sandbox in New York City to discuss everything from improving lifetime subscriber value to the best use of affiliates and Web 2.0 features in subscription marketing.

Attendees ranging from Encyclopedia Britannica to Classmates.com absorbed best practices and inspirational case studies and heard from MarketingSherpa’s content Entrepreneur of the Year, Brad Fallon, whose search marketing training program StomperNet recorded $12 million in sales in 12 hours.

Besides the formal presentations, attendees also had the chance to network and share ideas -- even competitors like Blockbuster.com and Netflix were seen talking to one another an an evening cocktail party.

Several themes emerged throughout the event, along with key insights for the online subscriptions industry. Here are our top six take-aways:

-> Take-away #1. Testing is essential

At the risk of sounding like your mother nagging you to clean up your room, we have to note the value of testing anything and everything you can to improve your marketing and retention tactics. Fortunately, presenters offered some great tips.

Josef Mandelbaum, CEO, AmericanGreetings.com, stressed the importance of creating a formal testing group but also suggested dividing that team between two goals:
o One to test small items that add incremental value
o The other to test big ideas that could have a huge impact

“Incremental changes may not have the big bang, but you’ll never get the big bang without incremental changes,” Mandelbaum said.

Scott Butler, VP Marketing, Blockbuster.com, agreed, saying his team performs careful multivariate testing of offers and landing pages but they also make sure to test a handful of big ideas that could radically change their marketing tactics or materials.

“Usually, it’s your multivariate testing that will deliver the 5% to 10% incremental lift, but it’s the blue-sky testing that can get the 30% to 40% increase,” Butler said. “You can discover a new control, a new champion that beats everything else.”

Katie Davis, Director Marketing, Citrix.com, advised attendees who are testing paid search campaigns to set up a separate testing fund outside of formal PPC spending. This way, you can test new approaches without taking money (and results) away from your existing PPC budget.

-> Take-away #2. Make it easy for consumers

Whether you’re creating new products or coaxing existing customers to complete tasks, such as updating their credit card information, there’s huge value in reducing the customers’ pain.

ForeclosuresDaily.com, a subscription-based service for real-estate investors, has grown its service 3000% since 2004 by aggregating publicly available foreclosure information. Instead of investors having to comb through filings at courthouses around the country, ForeclosuresDaily.com does the work for them, aggregating new filings to a searchable online database.

Zacks.com found similar success introducing stock trading recommendation services with prices starting at $995 annually. “In other words, our customers are telling us, ‘We’ll pay you if you do the work for us,’ ” said Julie Lohmeier, VP Marketing.

Tom Higgins, VP Strategic Business Development, Books 24x7, explained how his team integrates their online database of copyrighted training materials and B-to-B books with corporate customers’ intranets, making it easy for managers and employees to use the system. And by demonstrating heavy use among customers’ staffs, they have achieved a staggering 98% retention rate.

The “make things easy” mantra also applies to your online forms. Canada’s online video rental service Zip.ca tested five options to replace its long, detailed online registration form, but found the best lift -- a 75% increase in trial registrations -- when it simply broke that long form into five easy steps. “[Customers are] OK with more clicks as long as it’s simple,” said Chris Emergui of Bam Strategy, the agency that helped Zip.ca with its new strategy.

-> Take-away #3. Affiliates and Web 2.0 influencers

Although some attendees raised questions about the value of affiliate marketing when selling subscriptions, several presenters discussed ways to make affiliates a powerful resource.

Peter Figueredo, CEO of affiliate marketing company NETexponent, described three instances in which his firm helped publishers such as the New York Times tap into affiliates to help promote subscriptions. But he warned that many publishers make a big mistake by not managing those resources as closely as other marketing channels.

One important tip is to protect your brand when employing affiliates with simple tests, such as making sure they all have adequate privacy policies. Figueredo said his team rejects 80% to 90% of affiliates who apply because they don’t a privacy policy in place. “Getting a couple of cheap orders through the channel isn’t worth it if your brand is damaged.”

Marketing through Web 2.0 channels, such as blogs and social networks, can be effective -- but only if you target the right members of that community. You don’t want to work with just any blogs, says Greg Jarboe of SEO-PR. You need to target ones who have the most influence within certain communities, what he calls the “opinion leaders."

But the technique requires a new approach, not just recycling existing press releases or other direct marketing materials and hoping bloggers will pick them up. His Case Study outlined an outreach effort and conference call with carefully selected bloggers to promote breaking news from the Windows Secrets newsletter.

That meeting and the handful of blog articles it generated helped the publication surpass its previous record for new subscriptions in a week. “You should take most of your PR materials and direct mail and burn them before you enter in to the Web 2.0 world,” Jarboe said.

-> Take-away #4. Payment issues

Credit card expirations and charge-backs are a fact of life for subscription marketers, and presenters had their share of ideas to deal with the situation:

- Cynthia O’Brien, Director Consumer Marketing & Operations ConsumerReports.org, uses a system that tells subscribers when the credit card they have on file with the site has expired. One contact method was a home page intercept that alerts users that their card has expired when they log in and gives them a direct link to update their card information. 39% of the users who received the alert updated their cards.

- Lyn Tran, Director Product Management, Symantec, suggested that sites clearly communicate with subscribers about impending charges for automatic subscription renewals. Many sites are afraid to warn people that their card is about to be billed, fearing that some will cancel their subscriptions. But Tran said the people who would cancel are likely the same people who will call and demand a refund once their card is charged. “The customer is always going to tell you what they want, one way or another.”

Attendees also debated the best way to try billing expired cards in your database. Gene Hoffman, CEO, Vindicia, said that adding four years to the card’s expiration date and resubmitting the charge seems to be working this year, compared with previous years when simply leaving the expiration date blank would allow charges to go through. But other attendees, such as ConsumerReports.org’s O’Brien, are taking a more conservative approach and not attempting to charge out-of-date cards. “The rules on credit card processing here today may not be here tomorrow.”

-> Take-away #5. Long copy vs short

From the very first presentation, attendees debated whether long marketing copy or short calls to action were more effective. Ari Gersen, Web Marketing Director, Boardroom Inc., said his team relies on long marketing letters and detailed promotional copy because the company’s newsletter subscribers have proven themselves to be readers.

But he admitted that he came to the job eight months ago with a different opinion. “I came in talking about shorter landing pages and got my butt kicked. The truth is, we test and test and test … if it’s really good copy, it’s going to sell.”

By contrast, AmericanGreetings.com’s Mandelbaum said his subscribers don’t read long copy, and, therefore, his marketing team relies on short messages heavy on color and graphics to highlight key features.

Zacks.com split the difference: members of their marketing team were big believers in long offer letters, but decided to test short email postcards that sent prospects to a longer landing/buy page. The postcard emails/long landing pages delivered four times as many orders as the company’s long email messages did.

Other presenters touted the usefulness of video to replace long marketing copy. Brad Fallon prepared to launch StomperNet by promoting free educational videos that he encouraged affiliates to share. “No one’s going to forward a long sales letter, but if it’s a video they’ll forward it all day long."

Likewise, ForeclosuresDaily.com created a Flash video of CEO Mike Kane touting the benefits of the service, which appeared on the site’s free trial registration page. “You can’t believe how much this affected our lead flow,” said Dustin Matthews, Marketing Director. How much? Leads increased 110% after adding the Flash video.

-> Take-away #6. Staffing issues

Everyone, it seems, would love more resources for their teams. But where to spend the money? Marketers had some ideas:

- Search marketing expertise is in high demand, but finding a good search guru is perilous, said several attendees. The good ones often leave to start their own search marketing firms, leaving you in the lurch.

- Blockbuster.com is looking to hire a blog/viral marketing manager, but that’s an even rarer skill than search expertise. “We’re having a heck of a time finding someone for this position,” said Butler.

- When it comes to the most valuable potential hire, though, several cited an old-school choice: a good copywriter. Fallon hired one at a cost of $30,000 a month, but said the ROI was obvious given the $12 million in sales the move helped generate. And Lohmeier said hiring a veteran, award-winning copywriter for Zacks.com was essential for the company’s recent postcard email/long landing page tests. “Copy is king.”

Useful links related to this article

Would you like the entire transcript from this Summit, including all the Case Study presentations and PowerPoint slides? Sign up at this link and we'll ship you a copy the instant it's available.
http://www.sherpastore.com/transcripts.html

or call (877) 895-1717

Also available:

Subscription Summit Transcript from 2006 featuring Time magazine, Hoover’s, Match.com and 10 more Case Studies:
http://www.sherpastore.com/transcripts.html

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