'Twas the season of gifts last month, and the publishing industry was certainly hoping to bring in some new subscribers. We witnessed a rash of gift subscription offers, with one correspondent receiving three two-for-one offers in the same week.
For example, Forbes went trolling for a renewal and packaged it with a gift subscription offer that would cost the current customer nothing. The current subscriber gets a renewal for the usual price and the chance to send a friend a gift for free. In return, Forbes gets a renewal and the name of a new prospect. But is this the best way to prospect?
Obviously, it is in the publisher's best interest to secure a renewal as early as possible to keep subscribers and to save on the postage and printing costs of sending a lengthy renewal series.
However, not everyone would agree that an early renewal offering a free gift subscription is a good deal for the publisher. For one thing, do they work? Consultant Gordon Grossman, for one, sees only rare circumstances for success with this offer.
"In my experience, the only new gift offer that works consistently is an on-magazine promotion to subscribers, which features just a new gift at a very low price," he says.
Grossman also believes that two-for-one offers, in general, are problematic.
"First, a two-for-one is usually part of an advanced renewal mailing. A lot of tests have proven that advance renewal mailings just waste money. At the end of the series, the total number of renewals is identical with what the magazine would get through a normal renewal series, but with added expense.
"Second, a new gift is the toughest sell in the publishing business. The subscriber not only has to think of someone he/she believes would like the magazine but also has to go dig out the address and write it on the card. In contrast, renewals are the easiest sell. Shackling a renewal offer with a new gift proposition is like putting a 20-pound weight on a runner's leg. He might still be able to move, but why make him struggle?
"Third, the publisher has to fulfill two subs instead of one. Finally, gift subs given away with an offer like this are virtually impossible to renew. The 'donor' only gave it to get a price break on his own sub, so why should he renew it? He doesn't," explains Grossman.
On the other hand, Don Nicholas, Chairman and CEO of Blue Dolphin Group, believes that the two-for-one offer does have some merit, if used correctly.
"The two-for-one offer is not good or bad by itself," Nicholas stated. "It can be a very effective way to sell subs and meet rate base.Any publisher with a heavy gift business could use this tactic effectively under the right circumstances."
"To be a good thing, a couple of conditions must be met
"1. The basic rate must be artificially high to allow the discounted rate per subscription to be a number that economically makes sense when a full source evaluation is done.
"2. The two-for-one offer must generate a significant lift over a gift offer that does not offer a heavily discounted renewal option.
"For instance, a publisher with a basic rate of $24 who normally makes a living selling subs at $15 for one year could easily find that selling two subs for $24 (one new gift and one renewal) makes more sense for his overall economics. This offer might perform much better (i.e., high response rates) than offering to just allow the existing subscriber to buy a gift sub for a friend for $12 or even $15 and NOT renew their own sub at the same time.
"I work with dozens of large and small publishers who use some variation of the two-for-one tactic. It can be a very good thing, if you know when and how to use it," Nicholas says.
Thus, the two-for-one subscription is worth testing; just make sure the numbers make sense and the time is ripe before making such an offer.