One Way to Increase Revenue: Upsell!
The Billing Effort
If the subscriber does not cancel during the free trial, a welcome letter and bill for $19 is sent. On the bill are two boxes to check:
- Yes, send me 48 additional issues for just $19. Here's my check or credit card number.
- I want to save more. Please send two years for a total of $39.
In the parlance of the subscription world, this upsell is known as "renewal at birth." It brings in extra cash and increases the advertising base from one year to two years.
In the 1980s when I was publisher and owner of WHO'S MAILING WHAT!—a newsletter about junk mail for junk mailers—I would attend the Newsletter Publishers Association conference at the Mayflower Hotel in Washington every June. One year an icon of the business—financial publisher Howard Ruff—gave a speech on the arithmetic of running a newsletter. His opening line:
"If you need money, never, never, never ever borrow it. Instead, always go to the Advance Renewal National Bank!"
Publishers short of cash can send out a fabulous discount renewal offer far in advance of the subscription running out. Most folks don't have a clue when their subscription is up for renewal, so they send money for another two or three years. This "advance renewal" scheme always brings in needed cash.
FLEDGELING PUBLISHERS NOTE: Under publishing rules, if you take cash for a magazine or newsletter that you intend to deliver in the future, you must deliver the publication as promised or you're in trouble with the FTC. Some eager circulation directors have been known to send advance renewal efforts every year which means they can owe 20-years or more worth of issues. When it comes time to sell the publication, this unfulfilled subscription liability can cause a serious diminution of the actual value of the magazine.