This is the second part of Peter Hobday’s series on digital marketing. Read part one here.

As discussed in the first part of this article, most publishers fail to offer any kind of on-going customer service. Only around 30 percent of the top magazine websites actively encourage you to register. Most visitors must hunt around for a sign-up box that has been placed in the wrong area, is badly designed and gives no incentive to join.

If people buy a subscription, the publisher cuts and runs – that is the last you’ll hear from them.

The smaller publishers lead the way: this site for example. The TheMediaBriefing home page has a box in the right hand column offering digital media, B2B and eight other free newsletter updates. And after every article summary you’ll find this notice:

Newsletter Subscriptions


If you liked this article you can sign up to receive free weekly newsletters from the site by clicking here.

Clearly, if a Johnny-come-lately band of young entrepreneurs can include that level of customer service, why can’t the people running our “leading” media companies?

It’s not as though it’s a tough or costly challenge. Anyone can do website design these days. And the systems are not difficult to install. There are huge profits to be made: the more registrants you attract and the more you discover about them, the more you can sell them paid-for content, “gold memberships” and other products.

If it’s measured, it’s managed

If we want to build more profitable subscribers, we must measure results and use the evidence to plan and manage profitable marketing programmes.

Your source code analysis show where the most profit comes from and where and when your best customers are to be found. This evidence forms the strategy you adopt when you promote to new subscribers:

– The terms of the offer
– The different lifetime values of the various sources your subscribers come from
– The cost of acquisition
– When the best time to promote is
– How to trade up the subscriber to become a more profitable customer
– How to lengthen the period your subscriber spends money with you

By examining and testing the above six points you will increase profits for your company. This research and measurement area is where most creative effort must be directed.

How renewal figure analysis reveals huge losses

A recent survey across a broad range of publications found that, of 1.4 million subscribers recruited in 2009, 1.1 million lapsed in the same year.

By keeping accurate records you can measure profitability and discover which subscribers cancel early. A simple analysis will usually reveal big errors in strategy. For example, we know for a fact that subscribers who come in from the “easy” channels such as retail promotions through Tesco usually have a first year renewal rate of less than 30 percent. In-magazine inserts renew on average at 59 percent. Without an energetic and effective upgrade programme it’s not possible to make money on these short-term customers.

But today, these promotional areas are where most publishers ‘marketing’ efforts are made. Why?

Low renewal rates are not good business and not good marketing. But those loss-making figures are usually hidden and glossed over by an overall renewal figure of 70 to 75 percent. The loss-makers are propped up by the long-term, loyal subscribers renewing at 90 percent and more.

How managing directors limit profits

Most profitable marketing avenues are blocked. Marketing enterprise, innovation, investment and competition are constrained by the managing directors “command and control”. Put simply, marketing managers aren’t free to make profits for their company.

The result: little true innovation, no organic growth and no clear competitive advantage. All the established magazines in our top ten are losing sales.

How much profit should a marketer make?

By the end of each year the marketer should at least have doubled the money in her budget, and get to reinvest it in growth. That’s a pretty basic benchmark measurement among marketing-led publishers, both consumer and business. The money is doubled year on year, and so on until market saturation.

If the marketer fails to achieve the benchmark figure, the publisher may as well take the budget away and put it in a bank to earn interest.

It’s not a tough target. Among my clients, the best upgrade and upsell programmes multiply the value of a new subscriber by an average of four times.

Is marketing just for the big publishers?

Well, the opposite is true: it’s the smaller players who lead the way.

The bigger company execs appear to confuse marketing with promoting and distribution. Promoting is when you advertise your product. Distribution is the route you use to deliver your product to your readers. That job should now be handled by editors – after all, they are closest to their audience and can find out where they are, online and offline.

Marketing is about finding your audience and selling to them, and it’s the foundation on which business is built. Marketing strategy decides your advertising, distribution, market penetration, readership and profits.

Mostly, it’s the managing directors and publishers who decide the marketing strategy. Unfortunately their experience has usually gone no further than advertising, editorial and distribution. That’s why the big companies are failing in their marketing and their titles are not growing. They don’t really know what marketing is.

Peter Hobday runs Subscriptions Strategy Ltd, which builds membership and subscription strategies for publishers, Internet marketers, property consultants, financial advisors, software producers and charities.