August 27, 2009
Here’s a great case study for marketers looking to drive more members into longer-term subscriptions.
See how a marketer used a promotional gift to encourage customers to choose longer-term subscriptions during the launch of a paid membership service. The gift got 70% of customers to choose a two-year subscription, and recycling the gift offer several months after launch doubled conversions for an entire week.
In January 2009, Rita Spangler, VP Retention Marketing, Allrecipes.com, was getting ready to launch a supporting membership program for the recipe and cooking tips website. The paid subscription offered more features than the site’s free membership, and was intended to lift revenue.
But there was a small problem with the new program.
"There were additional features that we wanted to add to the supporting membership at the beginning which we weren’t able to get done in time for the launch," Spangler says.
The team knew they had enough features to make the membership worthwhile -- but they wanted to encourage customers to sign up for a longer subscription to make sure they experienced the full benefit of membership.
They also wanted a campaign that was flexible enough to promote the launch, and still encourage subscribers to choose longer-term memberships down the road.
The team promoted the launch by offering a free gift to customers who purchased a one- or two-year membership. But they designed a staggered marketing campaign that offered the same item several months after launch, to continue encouraging customers to choose the longer-term options
Here are eight steps the team followed to launch the membership option and re-use the gift for subsequent campaigns:
Step #1. Budget for a full year
The team set aside enough money to purchase an entire year’s worth of giveaways. They did not want this to be a one-time offer.
Step #2. Poll audience about the appeal of potential gifts
The team held several brainstorming sessions to determine options for the free gift. Ideas included:
o Branded measuring cups
o Branded measuring spoons
o Other kitchen gadgets
o A branded, reusable shopping bag
"We couldn’t decide what to go with, so we actually asked our members ‘If you were going to get a gift form Allrecipes.com, what would you prefer and why?’"
The team asked the question via a pop-up survey on the website. After a few weeks of running the survey, the clear winner was a free, reusable grocery bag.
The bags fit in with the site’s core purpose (shopping and cooking), and they acted as free advertising for the site when customers used them in stores.
Step #3. Design gift
Allrecipes.com’s creative team designed the bags with the following features:
o Bright orange color
o Company logo and website
o Sturdy, reusable design
o Environmentally friendly/biodegradable
The team chose the bright orange color to make the bags stand out. Also, they selected an eco-friendly manufacturer to appeal to Allrecipes.com’s audience, which leans toward environmental friendliness.
Step #4. Promote membership offer and free gift on-site
The team promoted the new membership option and free bag offer heavily on their site (check the Useful Links section, below, for creative samples):
- On-site display ads
The team created a 300x250 display ad to be shown in the site’s available inventory, including on the homepage. The ad featured an animated image of the two bags and the descriptive text, "Free Gift...With purchase of a Supporting Membership!"
- Benefits page
Clicking on the ad brought visitors to a page describing the supporting membership. The page repeated an image of the two bags after the description, and next to the "learn more" button. The image also featured the "Free Gift!" text.
- Sku page
When clicked, the "learn more" button took customers to the sku page. This page described the site's three membership levels:
Bags were included only with the 1-year and 2-year memberships, and the image was displayed next to the prices.
Step #5. Do not use offer in outbound marketing campaigns
The team did not use the free-gift offer outside of their site. Instead, the bag offer was intended to entice free users to sign up for one of the longer, paid memberships.
"The goal really is not to do acquisition advertising because you’re not going to get people to buy a supporting membership right away," says Spangler. "You need to get people to come to the site, get a free membership first, sort of get involved in the site, and then they’re more likely to purchase the supporting membership."
Step #6. Include a welcoming post card
When the bags were mailed to new subscribers, the team included a post card that thanked customers and described the benefits of the supporting membership.
"So you’re not just getting bags in the mail, you’re getting a little welcome from us as well," Spangler says.
Step #7. Scale back on-site promotions after launch
Several weeks after the membership’s launch, the team removed the advertising featuring the bags from the homepage and the benefits page -- leaving only a mention of the gift on the sku page. This changed the bags from a promotion to a conversion tool.
When a customer arrived at the sku page, he or she had already indicated an interest in purchasing a membership. The bags were then offered to encourage customers to purchase one of the longer-term memberships.
Step #8. Re-use gift offer in subsequent campaigns
After scaling back the on-site promotion, the team featured the bags prominently in an email campaign launched in late July (see creative samples below).
The email featured a large image of the bags next to the following text:
Do you like free stuff?
Of course you do--who doesn’t?
Right now you can get a FREE Allrecipes cookbook and shopping bag* when you buy a Supporting Membership. So, that’s free stuff and access to exclusive new features that will make your Allrecipes experience even better.
Find out more now !>>
The text "Find out more now" was linked to the supporting membership benefits page, which described the program.
The team sent the email to their list of active free subscribers -- those who had visited the site one or more times in the last 24 months.
"Giving away the bags really did help with acquiring members during the beginning, especially, and continues to help until we can add more features," Spangler says.
So far this year, sales of the supporting memberships have been:
o 70% -- 2-year memberships
o 18% -- 1-year memberships
o 12% -- 6-month memberships
The email campaign featuring the bags had two separate sends with the following results:
o 16.2% to 23.1% open rate
o 3% to 5% CTR
The week the email was sent, paid subscription sales doubled, and were more than 300% higher for two consecutive days.
Useful links related to this article:
Creative Samples from Allrecipes.com’s promotional giveaway
Pyschster Inc: Powered customer opinion survey
Simply Green Solutions: Manufactured the bags