When MyStockOptions.com launched in 2000, granting lucrative stock options was a common incentive across the dot.com landscape. And a belief in ad-driven free content sites was prevalent.
Enter MyStockOptions.com, a free Web site offering practical information and financial calculators for both employers and employees on managing virtual wealth. Then came the bust and offering a niche ad-based free site equaled bankruptcy for most publishers.
Yet MyStockOptions.com has survived. How?
We interviewed site Co-Founder and Editor Bruce Brumberg to discover his hard-won lessons in online content business models, selling subscriptions, selling site licenses, as well as pointers for other publishers' print-to-online transition. Selling subscriptions to individuals: pricing & email lessons
When MyStockOptions.com began offering individual subscriptions in early 2003, Brumberg was afraid to charge too much. He shouldn’t have been.
When the site bumped its initial lowball price from $59/year to $99/year, there was no significant drop-off in conversions to subscriptions.
After researching visitor traffic patterns and conducting informal user focus groups, the marketing team discovered they had two different animals of users. Some joined the site intending to use the resources year-round, but others joined while researching a one-time question and might never re-visit.
MyStockOptions.com's marketing team wondered if many more of these one-time researchers were turning away at the subscription barrier page simply because they didn't need a full annual subscription. Was the site leaving money on the table from one-time users?
Conversely, if the site offered a super-cheap one-month access fee, would they lose higher-priced annual subscriptions from those single-time users so desperate for information that they'd pay a higher price?
In July 2004 the team launched a 90-day test to see if additional options would raise or lower profits. The test offered $25 month/$99 year/$179 two years.
The test failed. Although total orders increased very slightly, the average sale price dropped significantly, and the site's monthly revenues lowered.
Undaunted, the team launched a second test in October, pushing pricing upwards for all three terms. Success! Total monthly revenues went up, and two-year sales rose in particular. Here's the breakdown for November 2004 sales with the higher pricing (all included auto-renew with an opt-out option):
Monthly $49 = 15% of sub sales
One year $149 = 73% of sub sales
Two year $249 = 12% of sub sales
Brumberg figured the average monthly buyer would cancel their auto-renew after a few months, because this is industry average. But even then, he would have made as much as an annual so he didn't worry much about it.
(Plus, we suspect the ultra-obvious savings for a one-year term probably helped upsell quite a few users who normally might only go for a month. It's generally a big mistake to make your monthly pricing anywhere close to 1/12th of your annual price.)
Brumberg's team also learned a few valuable lessons about email marketing:
Lesson #1. Informative offers work better than price discounts
The team has tested sending $25 off discount coupons to free registrants and expired trial offer takers, however these rarely convert many new subscribers. Instead, the site's email newsletter featuring links to useful new articles invariably converts free-to-fee at a much higher rate.
Interestingly, Brumberg doesn't publish on a clockwork regular schedule. Issues come out about 8-10 times per year, some months may have no issue, and others may have two. Publication dates are based on demonstrated times of peak user information need.
For example, at tax time everyone wants to know what to do with their stock option plans. So Brumberg gets a great open, click and conversion rate, plus high perceived brand value. But during summer doldrums, few people care about their stock plans, so Brumberg holds off emailing.
He figures why lessen brand impact in the inbox? Email should be must-read all the time rather than only sometimes.
Lesson #2. Don't rely on email alone
Given the nature of the coverage, MyStockOptions.com's email is often caught by content-based filters, especially for at-work addresses which tend to be plagued by false positives.
Although the marketing team carefully sent a series of emails to upcoming expires who weren't on auto-renew plans, many customers didn't receive them. It became a customer service problem as lapsed subscribers contacted the site complaining, "Hey, how come you never warned me my subscription was ending??!"
Now the team is putting a direct mail effort in place to supplement emailed renewal notices. 5 Lessons on selling site licenses
Regardless of individual subscription sales success, the site's bread and butter business remains selling site licenses. These are not group subscriptions as such because the content is usually repackaged as a "knowledge center" on the customer's intranet for employee use or extranet for their clients' use.
Here are Brumberg's top five lessons from the past five years of selling these site licenses:
Lesson #1. Long sales cycle
Negotiating a big license takes time -- months, sometimes even years. It’s tempting to think of the big bucks that a site license brings in as easy income. Don’t be fooled: it’s serious work. Brumberg's won some accounts only after wooing them for half a decade.
You're not schmoozing a single decision-maker; and, now that corporate librarians no longer rule supreme, you can't depend on a single evangelist to further your case in the company either. In most cases, the decision will ultimately involve many people on a committee -- possibly IT, finance, training, HR, marketing, sales. Think politics, red tape, and inevitable delays.
Lesson #2. Brand marketing is essential
Selling a pricey site license is more about brand marketing and less about the kind of impulse buys that characterize individual subscriptions online.
That means tirelessly pounding the pavement to keep your name in front of every member of that committee who might evangelize or veto your proposal. Brumberg budgets for booths at every trade show he can afford. He also ceaselessly pursues PR opportunities, schmoozing more mainstream press who might quote the site as an expert.
Lesson #3. Multi-year contracts are best
Brumberg says initial multi-year contracts are so valuable that it's worth offering a significant discount to land them.
That's because you don't want to get stuck in endless rounds of renewal negotiations, proving your worth to each committee member just a few months after the first contract was signed.
Get your foot in the door with as long an initial contract as possible, and then focus your energies on closing new accounts elsewhere. By the time the old contract's up, hopefully you'll be so much an established part of the corporate culture (and site) that it's harder to dislodge you.
Lesson #4. Your top exec must be able to sell
Many publishing execs from direct response or editorial backgrounds flinch at the thought of making a sales pitch in person.
Brumberg warns, you can't outsource this task or hire a sales rep and stick them in a cube at your office (unless they handle smaller accounts only). Bigger accounts are going to expect a meeting with the top guy in the company.
Lesson #5. Where's the money?
Rarely do companies have line-items in their budgets for purchasing site licenses. Your biggest challenge at the start of the sales process is figuring out, with help from the prospect, where the heck they'll get the money from.
If you’re selling to a client reselling your content as part off their services, determine if the client can actually charge a premium for adding your info into the mix. Or will their prices remain the same, but they'll have happier customers? And how can you help them prove it to their CFO?
“It’s all about relationship marketing,” Brumberg says. “We’re really competing against other priorities.”
Tough work but Brumberg has the results to show: MyStockOptions.com has a 100% renewal rate on its larger licenses.What Print Publications Need to Know When Going Online
Brumberg started his career in legal and financial publishing selling print newsletters, books and videos, such as the 'Bowne Digest for Corporate & Securities Lawyers' and 'Securities Regulation in Cyberspace.' So he's learned first-hand how different building an online business can be.
His top 5 pointers for other print publishers considering an online launch:
Pointer #1. Don't repurpose articles without re-writing them
Print content can’t simply be digitized and slung up on the Web as is. It needs to be rewritten, reedited and reformatted. That means:
- Adding more subheads
- Turning prose into bullet points
- Switching to second person "you" whenever possible
Also, review your past articles looking for common themes. Most people visit a subscription Web site wanting the answer to a specific question or problem and they don't want to read your entire back issues to discover the answers gradually. So, you may be able to create new online-only articles by repurposing information pulled across many past articles.
Pointer #2. Reorganize your contents completely
Again, searchers are looking for something in particular and rarely will that thing be your past issue date or even the specific words in a headline. (In fact, most print editors don't write headlines with enough search terms as it is.)
So, organize your articles and other content by topic, and don't be afraid to cross-post items in several places if applicable. To pick these topics, use results from reader surveys and data from search engine traffic as well as internal site queries. What are visitors looking for?
(Hint: Never organize based on what you have the most content in, unless that also happens to be what people search the most for. It's what they want that counts, not what you've written.)
Pointer #3. Add on non-text-content such as tools
Brumberg notes you should add on as many non-text items as users might find valuable. Remember, people aren't coming to your site because they enjoy reading. They want answers. Consider calculators, links lists, quizzes, and audio/video streams.
For example, in addition to over 600 useful articles and FAQ documents, MyStockOptions.com includes:
- A glossary of terms
- A Tax Center to clarify the basics of withholding, reporting and filing applied to stock options, restricted stock and ESPPs
- A “My Records” portfolio-tracker for stock options and restricted stock
- Two calculators
- a “Quick-Take” Calculator to compare net gains at different stock prices and an “I Need the Money” Calculator to determine if you have enough vested stock to generate the after-tax amount you need
- A Comparison Modeling Tool to contrast your options with other investments
- A Global Tax Guide to taxation of stock options in 26 countries
Pointer #4. Test launches require more investment than print
Unlike print publications which can launch based on a premiere issue alone (or promises in a DM package), most subscription sites need a critical mass of content prior to launch.
That's because buyers expect to find their information desire answered immediately upon entry. Online, if visitors find you don’t have exactly what they’re looking for, it’s on to the next site. Subscriptions are purchased for instant usability, not future promises.
Pointer #5. Web requires more money than you think
Just because you’re saving on printing and postage, don’t drop the price of your online version below the print book. Numerous additional costs may include:
- Web analytic software
- Content management system & ecommerce capability
- Search engine optimization and search advertising - Site hosting
- Email broadcast hosting
- Affiliate management and ad tracking software
- Special landing pages for marketing campaigns
Plus, you'll probably need to hire a full-time Web tech because inevitably once the site is up, it needs ceaseless tweaking. Hiring in-house can prove much cheaper in the long run than outsourcing. Useful links related to this article
Example of a paid barrier page on MyStockOptions.com: http://www.mystockoptions.com
Registration form showing variety of price/term options: https://www.mystockoptions.com/secure/registration/basicfor
Sample Calculator: https://www.mystockoptions.com/mytools/intro_quicktake3.cfm