Famous Last Words: Renewal Secrets
An old marketing guideline states that it costs five times more to acquire a new customer than to sell something to an existing customer. Given the current recession and the skittishness of consumers to part with cash, the current acquisition cost ratio may well be 10 times or more.
Put another way, a customer file is the main asset of any direct marketing business. It is imperative to treat customers with love and dead honesty.
John Walter’s Distress
Following the passing of John Walter, executive editor of The Atlanta-Journal Constitution and founding editor of USA Today, his widow came across an essay on his computer, which was printed in Poynter Online. According to the essay, Walter had canceled his subscription to the St. Petersburg (Fla.) Times, because:
I discovered that I foolishly had been paying full price for a home-delivered subscription and didn’t know that if you started a new subscription, you actually got 50 percent off for 12 weeks. So, we canceled our subscription and then started it up again, and had 12 good weeks at 50 percent off.
Then I called to cancel my subscription at the end of the 12 weeks, and they said they really didn’t want to lose me as a customer, so I could have another 12 weeks at 75 percent off, and I realized what a fool I had been to take the paper for 50 percent off.
I learned the craft of circulation copywriting under the mentorship of my client, consultant Paul Goldberg, whose credo was, “In a renewal series, always start with your very best offer.”
Goldberg’s reasoning: If the subscriber fails to renew with the first effort and receives a better offer on the second effort—say a fatter discount or a juicy premium—he’ll wait to see if an even better offer comes in the third, fourth, fifth and sixth efforts. Subscribers are not stupid; they remember these things.
One technique Goldberg likes is for the copywriter to say in the first renewal effort that this is the very best deal that will be offered. Renewals two through six may have different copy, but not a better offer. In his experience, wily subscribers save the first renewal effort and, once they see that future efforts are not as good, will dig out that first one and respond to it.