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May 07, 2003
Event Wrap-up

2003 Summit Wrap-Up: 11 Publishers Reveal How to Sell More Subscriptions to Web Sites

SUMMARY: No summary available.
This Monday morning at 8:30 A.M., executives from 100 Web sites
selling subscriptions, from to Ziff Davis, gathered
in a conference room in New York to swap data and tips at
ContentBiz's 3rd Annual Summit.

"In the past subscription growth was relatively easy," noted
ContentBiz Publisher Anne Holland.

"Everyone picked the low-hanging fruit. Consumers who loved you
so much they'd subscribe in a heartbeat. Plus, subscriptions
grew because the marketplace overall was getting more and more
used to the idea of buying content online. So everyone was happy
at our past Summits, oh great we're selling subscriptions!"

"However, I'm here today to warn you," she continued. "You've
plucked most of that fruit already. Selling subscriptions is
going to get harder and many of your subscription marketing
efforts are fairly weak. I surf hundreds of subscription sites,
they need a lot of work to do better at conversions."

On that hard-headed note the Summit began. Here is a quick
overview of tips and trends across the board:

1. Direct response and Web tech = unhappy bedmates
2. Credit card processing headaches
3. Outbound marketing tactics to get a steady new sub flow
4. How to improve visitor-to-sub conversions
5. Three solutions to raise renewal rates

-> 1. Direct response and Web tech = unhappy bedmates

Selling subscriptions to Web sites and email newsletters requires
classic direct response marketing tactics and skills.

As one speaker admitted, "Teaching my marketers Internet stuff is
easy at this point. We've got that down. It's the direct
response stuff that's killing us. That's really hard."

Lesson one: Hire marketers from DR backgrounds. In fact steal
circulation managers from offline publications if you can. They
should be the kind of people who love spreadsheeting and
analyzing numbers.

However, your biggest marketing challenge is probably your tech
department. "Tech hell!" exclaimed's Josef
Mandelbaum. "Whenever you want to test something, your tech
people won't like it."

Of course the foundation of successful direct response
marketing is the ability to launch and measure an unending series
of tests.

Terra Lycos' Paul Pellman said he has devised a series of
workarounds such as using banner ad-serving tech to put up tests
on the fly instead of hard-coding marketing onto site pages.

He explains, "I'm a big fan of bubblegum, rubber bands, bits of
string. IT wants to engineer a gold-plated version, but if you
do that you're not ever going to test a lot. You have to be able
to throw stuff against the wall a lot to learn answers."

The most popular tests many sites are trying:

o Pricing

Almost everyone reported that price sensitivity is not as bad as
they thought. In other words, if you have not tried raising your
prices, you are probably leaving money on the table.

One audience member asked's John Brady if he wishes
he had launched at $395 instead of launching at $199 and taking a
couple of years to move the price up. "You bet!" he replied.

CashFlowCircle's Shawn Casey said when he tested $47 and $97 per
month charges, "twice as many people took $97 so we got rid of
$47 immediately."

o Trial length

Last year everyone learned that opt-out trials (where consumers
can subscribe at no cost for a while if they give a credit card
up front to be charged later) are the killer app. This year
everyone talked about their latest tests: How long a trial do
you have to offer?

Publishers are testing everything from three days to 30 days, as
well as the wording ("30 days" versus "one month") to see what
term converts the most subscribers. Results vary by site; what
does not vary is the fact that you *must* test it.

o Offer look and copy

You can not just give your marketing creative your best shot and
let it sit there on your site forever. You have to test your
barrier page, the various links from your home page, landing
pages for outside offers, etc.

Once you have found a winner, do not stop. Let the winner
become your new "control" and keep on testing new creative until
you beat it. The process is endless. Breath in, breath out,
rinse, lather, repeat.

Accept the fact that your marketing creative will never ever be

-> 2. Credit card headaches

No matter how big or small a company they came from, everyone was
complaining about dealing with credit cards.

On one hand credit cards make auto-renewing possible, and auto-
renewing equals much, much higher profits. On the other hand,
credit cards are a massive pain to handle.

Three reasons why:

o Banks do not like subscription sites.

They do not want to see your site rack up more than about $50,000
in subscription sales per month because it is risky for them.
What if you go under, and then all those consumers ask for their
money back? It could happen. It has happened.

o Credit card lifetimes are getting shorter.

Consumers are switching credit cards at a record pace. They are
consolidating debt; and, they are taking advantage of low six-
month rates and then switching cards the minute the rate goes up.

This means unless you sell to people using corporate cards (which
have a slightly longer lifespan), you are going to start getting
"hard bounces" on auto-renew accounts due to a card being dead at
much higher rates than you ever expected., among other sites, has had to create a
complex system of marketing campaigns specifically aimed at hard
bounce cards to win that subscriber back.

o Soft bounces cost you money.

Soft bounces, which are when a card account is still active but
some of the information you have for the it (such as expiration
date) is wrong, wind up costing publishers money because your
merchant account charges you a higher fee for soft bounce

On one hand, you can force the charge through. On the other
hand, your profit margin will be smaller than expected.

One solution to credit card headaches is to accept e-checks
online. Works best when you are marketing to the older female
demographic who are often prefer checks to cards.

Oh, and last but not least, do not even think about relying on
100% credit card offers for European customers. In some
countries many consumers do not have credit cards or just do not
like using them. Allowing debit card network and phone bill
payments may be your best choice.

-> 3. Outbound marketing tactics to get a steady new sub flow

Only a certain percent of your regular visitors or free
subscribers will ever convert to paying. Once you have converted
that group, you can not grow your subscriber base unless you get
fresh blood.

Attracting newbies is mission critical no matter how old and
established your site is.

GameSpot, for example, has been around since 1995. When they
first switched to paid, 20,000 fans signed up immediately. Then
growth slowed to a crawl because search engines had stopped
listing most of the site's pages when they went behind the paid
barrier. "I was terrified, I had to create new user growth,"
remembers SVP Vince Broady.

What works? Search marketing, especially pay per click ads on
Overture and Google, is definitely effective, as long as you have
got tight tracking mechanisms in place before you start and
you are willing to tweak terms and copy on a frequent basis.

Dr Flint McGlaughlin of said he tore
competitor's search marketing tactics apart, analyzing which
words they were either optimizing or paying for. If a search
term was too expensive due to popularity, he brainstormed to find
a similar term that nobody else was advertising on yet.

For example, when marketing content about mental health he found
the term "depression" cost more than $1.00 per click, but
"bipolar" was just .17 cents.

Getting friends to refer friends is also highly effective,
although it does not tend to work as if you push it in a big
promotion (i.e. Win this prize if you refer your friends!) It is
got to come up in a more natural way.

Offering sexy no-cost content (newsletters, games, ecards, you
name it) is the best way to attract newbies, but several
publishers warned that you still have to account for customer
service costs.

Even though people are getting your content at no-cost, they
still expect great service. Fast answers to questions, quick
fixes to tech problems etc. Since you are hoping they will pay
someday, you can not blow them off with a form letter.

-> 4. How to improve visitor-to-sub conversions

Constantly tweak and rotate your site's banners and links that
lead to subscription offers. Ugly often wins, more than one
publisher had grey utilitarian buttons and boxes that were
currently the winning control creative.

Test cartoon-style characters, test animation, test text-only ads
ala Google, and absolutely test pop-ups targeting site leavers.
Even MIT Technology Review (who you might expect to be fairly
staid with their up-market image) pop-ups site leavers if they have
bailed on a subscription offer.

CashFlowCircle constantly offers new teleseminars where
subscribers can ask name-brand experts questions about how to
improve their businesses. All past teleseminars are stored as
audio-files on the site as well, adding up to a critical mass
of content that is hard not to subscribe to. has tested offering everything from tote
bags to a Mikasa crystal candy dish. "Absolutely nothing
worked," noted CEO Mandelbaum. Until they started offering three
subscriptions for the price of one, which is a big winner.
(People buy one for themselves and give friends or relatives the

Variety tested offering a whole bunch of different subscription
levels. "Platinum, gold, silver, pewter, we had all these
tiers," said Variety's Travis Smith. "Now we have one. We
learned don't be coy; businesspeople want to get it over with and
get it all in one."

In other words, it is hard enough to sell subscriptions, do not
annoy people or confuse the issue with a choice of many different
offers. tested making its subscription process easier. In
the past new buyers had to fill out pages of information to
create an online profile for the system. Now Matchmaker has
separated this process so becoming a subscriber is quick and
easy. Only after the order is submitted are you next prompted to
fill out the longer registration form. If you abandon it there,
at least Matchmaker has not lost the subscription altogether.

When it came to marketing copy, everyone agreed that your site
*must* have a human-feeling personality. People do not buy from
sites or from computers, they buy from people.

Hype-ridden copy (long a staple of offline circulation marketing) is out. You need to build trust far more than excitement. If
you are attracting the right people to your site, they are already
excited about your topic, now you just have to convince them
that you will deliver it well enough to please them.

Outrageously good customer service can go a long way in that
regard. Photos of staffers, links to communicate, and a definite
brand flavor help too.

In fact, if you acquire another subscription site in your niche,
you may do better if you do not merge it into your brand. Run
them side by side, each with a unique personality, instead.

-> 5. Three solutions to raise renewal rates

Subscription sites have made a tremendous amount of progress in
marketing renewals in the past year. What was once rather
slapdash has begun to turn into a true science.

Everyone is doing auto-renew. Consultant Bill Baird of Baird
Direct revealed data that showed annual subscriptions offering
autorenew have an average renewal rate (after cancels) that is 27
points higher than subscriptions that consumers have to
proactively hand-raise to renew.

That said, auto-renewing month to month does not mean you will have
a great annual sales rate.

One attendee at our cocktail party said he had an average five
month month-to-month subscription term. Another said his average
was about 15 months but predicted it would fall when his site
grew beyond the initial circle of heavy fans.

Three tactics were definite winners to raise auto-renew stick

o A badge:

Month-to-month subscription sports site is hugely
seasonal and had a 20% fall off the month after football season
ended in 2002. They tested giving all subscribers a virtual
"Badge" that notes how many months they have been members. The
personalized badge appears on that member's home page whenever he
or she visits.'s Bobby Burton says that members have posted "I love
my badge" on the message boards, and many stick with the site
off-season because they do not want to lose months. (If they
cancel and subscribe next season they have to start from zero
badge months again.)

o Phone cancels only:

Both and sites only allow
subscription cancellations by phone. (Not by email, and not by
site form.)

When people call in to cancel, they are greeted by trained
customer service reps who have scripted replies (as well as
income bonuses) to help them save the account.

You might be surprised how often an account can be saved. After
all, someone who has subscribed before is your best prospect to buy

o Printed invoice:

If an auto-renew account is cancelled due to a credit card
bounce, try sending out a printed renewal invoice. There are
plenty of vendors ready to handle this for little more than 50
cents per piece. Just send them a regular data file and keep
mailing notices until the cost outweighs the benefit.

Forecast: We expect publishers to continue increasing focus on
measuring and increasing average subscriber lifetime value by
improving renewals and cross-selling ancillary products (or
adding more ad sales back into the mix).

This is the key to a profitable subscription site.

Useful link:

You can get the entire 250+ page transcript of this Summit,
including loads of data not included in this article, at the link
below. Includes Q&A, PowerPoint slides (very useful charts),
handouts, and of course speeches.

Click to:

Or call (973)895-1717 to place your order, and/or enquire about
bulk discounts.

P.S. Every year the transcript is a best-seller, for which we are
deeply grateful because it helps us keep this newsletter no-cost.
Thanks to everyone who supports us year after year, you know who
you are :-)
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