Inside the Harvard Business Review Content Comes First (1,872
The whole of Congress reads it, and its subscriber file reads like a Who's Who of corporate America. Housed in a renovated military arsenal located a few miles from Harvard University's main campus in Cambridge, MA, The Harvard Business Review has been helping its readers improve the practice of management for eight decades.
First published in 1922 by Harvard Business School Dean Wallace Donham, the Harvard Business Review is the flagship of Harvard Business School Publishing (HBSP), a wholly owned subsidiary of Harvard University.
Meeting the needs of its blue-ribbon subscribers is paramount. "Content is always first—across all media," attests HBR's director of corporate communications Sarah McConville. "HBR readers are leaders within their businesses, and HBR's marketing message reinforces this."
This message is conveyed through a host of media—including newsstand copy blow-ins and space ads—employed to acquire new subscribers. The majority of its prospecting resources, however, are allocated to a media triumvirate composed of direct mail, e-mail and Web-based marketing.
A Blue-Ribbon Audience
The driving force behind HBR's circulation promotion efforts is Arthur Cohen, who is responsible for HBR's direct mail and e-mail marketing campaigns. As circulation promotion manager, it's his job to know his readers' wants and needs.
HBR'S "profile reader is not dissimilar to what you would think," says Cohen, "but it is different from the demographics of other well-known business publications such as Fortune and Forbes."
This observation is borne out by a recent reader survey, which reveals the median age of a HBR subscriber is 46 years old—slightly younger than previously believed. Its audience is 75-percent male; 95 percent are in business, industry or professions of which 49 percent are in top management positions.
HBR's strongest market is upper level management. While close to 20 percent of its subscribers are CEOs, 34.5 percent are in that next rung and report to the top executive at their companies.
These subscribers are the people who are in management and want to climb the ladder and become tomorrow's leaders, says Cohen.
Another strong segment of its readers—20 percent to be exact—is in middle management. These readers are slightly younger, falling in the 35 to 39 age category.
The number of female readers on the file stands at 25 percent and continues to grow. While Cohen has tested direct mail packages addressing concerns specific to women in business, he admits the results haven't warranted separate promotions.
Change is in the air
It is a commitment to its readers that prompted HBR to make one of the most significant changes in its 79-year history. This year HBR is increasing its frequency of publication from six to 10 issues a year.
A survey of its readers exposed a common desire for more of its ground-breaking content, and more often. "HBR gives readers the tools to push business to a new level. These readers are lifetime learners and are interested in ideas that fuel business," says McConville, adding that its readers "appreciate and value getting original break-through ideas … not rehashed press releases."
This hunger for premium content and the quickening pace of business has given way to four additional issues and a slightly broader editorial scope, which is part of the publication's natural evolution.
"HBR articulates the changes readers feel most acutely. They view their job differently than their predecessors. … While they remain focused on a function or area of expertise, they also feel success is a shared responsibility. Management is more inclusive," says McConville. "We don't have anyone that does exactly what we do. We play the role of trusted partner or colleague," she adds.
And its readers are extremely loyal to their mentor. Numerous subscribers confess to having as many as 10 to 20 years worth of issues in their personal libraries. What's more, Cohen occasionally receives anxious phone calls from devout readers when a slip up on a merge/purge results in an acquisition package being mailed to a long-term subscriber.
This circulation pro says HBR has an extremely high retention rate—the larger share of its 249,000 annual paid subscribers renew—and he predicts that publishing more frequently will increase circulation and generate higher revenues. Priced at $118 per year, a majority of HBR's total revenue is generated by subscriptions, an atypical revenue structure in magazine publishing. Issues average 170 pages and are 70-percent editorial.
The lion's share
Because it generates more than half of its revenue from subscription sales, HBR always is looking for a few good subscribers. Still considered its workhorse, direct mail accounts for the majority of HBR's acquisition efforts. It mails four prospecting efforts a year—two domestic and two international—for a total of 8 million mail pieces annually.
HBR's long-term running control package is an unassuming white, closed-faced, #10 envelope with a four-page nested letter, a BRE and order form—all of which are personalized. Also inserted are a four-color brochure and a four-color buck slip that promotes its current premium "Business Classics: Fifteen Key Concepts for Managerial Success," a collection of articles reprinted from HBR.
Created by a freelance copywriter in 1993, this package has remained HBR's control for nearly eight years—despite several attempts by the same copywriter to beat it. [HBR declines to reveal the identity of its treasured copywriter.] While it has undergone tweaks and variations over the years, the mailing saw its most dramatic lift in response when the four-page letter outpulled a formerly used two-page letter.
To promote its recent increase in frequency, Cohen opted to add an insert. "The challenge was how to support the change without messing with the control."
Even though it benefits from the university's non-profit status and mails at reduced postal rates, this modest package is expensive to mail due to the lettershop costs associated with a three-way match (three pieces are personalized). Because the profitability of a subscriber is determined by his or her lifetime value, the expense of the mailing is such that Cohen is searching for ways to reduce his cost per order and see a more consistent profitability in the first year.
To achieve his objective, Cohen is testing a voucher package that contains an order form, BRE and the insert promoting the frequency change. The recipient's name and address is preprinted on the order form and peeks through the window of a blue, #10 envelope, thereby eliminating the cost of the control's three-way match.
The voucher package looks promising in terms of gross response, but Cohen is less optimistic about results on a net basis. "The conventional wisdom regarding the double postcard format also applies to the voucher format," Cohen explains. That is, to work, "your product must have a well-known name because the format provides little room for sell copy and cannot play on a person's emotional drivers the way a letter can," he adds. On the upside, the voucher format is less expensive to produce, and if it pulls even with the control mailing, it would equal significant cost savings.
Cohen continually tests to reduce costs and increase response. For example, having proven content premiums are more successful than tchotchkes, he is testing the delivery of the premium at the time of order vs. time of payment. So far the test is almost evenly split, but he will keep testing, says Cohen, adding that if it is able to pull better numbers with a premium on payment, it will decrease the number of premiums HBR has to print and mail.
As rising print and postal cost make mailing more expensive, HBR is looking to increase the number of orders coming in through other channels, and both e-mail and the Web are becoming increasingly viable.
Cohen has been using e-mail to market HBR subscriptions to the HBSP housefile for little more than a year. HBSP has a product buyer database that contains the names of customers who've purchased items from an assortment of HBSP business products, including newsletters, books, HBR article reprints and the Harvard Business Review, among others. After purging out HBR subscriber names, the remainder of the HBSP file is e-mailed a subscription offer.
Cohen says he's been cautious about renting third-party e-mail lists due to their lower ROI and pay-up rate. At the time of this interview, HBR was gearing up for its first e-mail campaign to be delivered to rented e-mail lists using an HTML format and rich media.
Another drawback to renting quality e-mail files, finds Cohen, is the inability to structure the files similar to a traditional direct mail list. "You don't quite have the merge/purge and list maintenance capabilities that you do with traditional direct mail," he points out.
The jury's still out, says Cohen, but he plans to move ahead with e-mail marketing. But, how quickly he moves will be determined by how high the pay-up rate is from the current campaign.
Regardless of the file to which HBR is marketing, Cohen is as mindful of the content of the e-mail message as he is of HBR's direct mail campaigns. He takes the best of its print campaigns and distills the essence of it for e-mail campaigns. Just as all elements of a direct mail package are tested, so too are the components of its e-mail campaigns, including content, length, subject line, HTML vs. text and premium vs. no premium.
It also is planning to test an electronic format of its premium. Prospects that place an order via e-mail will receive a reply with a link and instructions to download the premium. The test results so far show almost a 50-50 split, reveals Cohen, who plans to test a bit more before rolling out the electronic format in e-mail campaigns.
E-mail also is used to drive traffic to HBR's Web site. Each month, it sends subscribers, who have opted-in, an e-mail update that features abstracts and summaries from the current issue. Delivered in HTML format, the e-mail contains a URL that links back to its site.
HBR's e-mail subscriber file is sacrosanct. HBR does not rent or make available the e-mail addresses of its subscribers—not even for HBSP promotions.
Weaving In the Web
Conducting the whole of Harvard Business School Publishing's Web efforts, including HBR, is George Pratt. As director of Web marketing—or "digital marketing guru," as McConville calls him—Pratt works with Cohen to develop HBR's digital content strategy.
Direct mail is still HBR's most important channel for driving subscriptions, according to Pratt, but its number of Web-driven subscriptions is increasing. And due to its low cost and ability to capture opt-in e-mail addresses, HBR is looking to build on its relatively small but growing number of Web-driven subscriptions.
The Internet played a prominent role in promoting the publication's frequency change. An e-mail campaign to opt-in names on the HBSP file was used to make an offer as well as drive traffic to the site. This campaign, says Pratt, was highly cost-effective because its only costs came from the use of internal resources and fulfillment costs.
Following the delivery of the campaign, it saw a significant lift in the number of orders coming in through the HBR site (www.hbsp.
harvard.edu) as well as click-throughs from the original e-mail, says Pratt.
Whether it be delivered by direct mail, e-mail or Web-based marketing, HBR sends a clear and consistent message: Content is everything.