What the Magazine Industry Can Teach the Rest of Us About Subscriptions

As a subscription marketer of over 15 years, I’ve observed, with ever more excitement, how the subscription model has become the norm rather than the exception for many of us today. With more and more opportunities for customers to purchase products and services on subscription (everything from TV to telephones to razors to ink cartridges), there’s never been a more interesting time to work in this field. Indeed with the market so well-educated to accept subscriptions, this really is a golden opportunity to develop a new and robust revenue line for your business.

When I first started my career in magazines, subscription marketing was still in its infancy, and very much regarded as the “less exciting” area of the business. We certainly weren’t considered as cool as the glamorous brand marketers who organized large retail promotions and exclusive events such as the NME awards. But for me, as a self-proclaimed data geek, the opportunity to really understand our customers, analyze their behavior, and build longterm, one-to-one relationships with them is much more exciting than, say, getting upfront and personal with Oasis.

So, starting at the beginning, why are subscriptions so important to publishers and what, if anything, can businesses beginning their subscriptions journey learn from our experience? For TI Media, the data speaks for itself—the lifetime value of a subscriber is on average more than four times higher than that of a retail customer, and while retail revenues are being challenged across the industry, subscription revenues continue to grow. We optimise every part of the customer lifecycle, embracing new technology as we go, and put data at the heart of everything we do.

As a team, we are structured around areas of expertise—digital acquisition, offline acquisition, e-commerce, loyalty, customer experience, and data—ensuring that we can optimise performance in each area. Projects are tackled in squads, pulling resources together from each key area to increase agility, all the time ensuring a great experience for customers. The way we tackle each area of our customer lifecycle is certainly not unique to publishing, and, as such, hopefully there will be some relevant takeaways here:

Awareness

Retail is our shop window, and we promote subscriptions heavily within the magazines themselves using a combination of ads and inserts (the two combined proving to be our winning formula). We offer customers a clear saving on the shop price if they commit to a subscription, generally a discount between 20% and 30%. These subscribers tend to be our most engaged, and, as such, generate the highest lifetime value. We also exploit all opportunities to collect customer data at retail, so that we can continue to promote subscriptions directly using competitions as well as access to our online rewards platform “My Magazine Rewards.”

Partnerships are another pivotal part of our awareness strategy. We work closely with carefully selected partners to put “minisubscriptions,” or short-term deals intended to initiate engagement with the brand, into customers’ hands. For example, we recently ran a hugely successful campaign with O2 Priority Moments where we offered customers a free three-month subscription to one of ten different magazines. The campaign was truly symbiotic, as O2 got to thank and reward their customers and we drove awareness in a new market.

Trials can also be a very effective awareness tool, and we tend to use them for “cooler” marketing channels where customers are less engaged. We may give away a free issue in exchange for data, for example, and subsequently upsell a subscription. We also use what we call “X for X” campaigns such as three issues for a pound, to encourage a subscription trial. We always ask for a small upfront payment (£1) and make the followon payment very clear, to ensure customers are aware right from the start what they are signing up for. We see varying levels of attrition following a trial period, depending on the markets in which we operate (specialist markets such as cycling seeing low levels of attrition, lifestyle markets such as fashion seeing high levels), so we adapt the strategy accordingly.

Conversion

We spend a significant amount of time ensuring that all our customer touchpoints are as easy and logical as possible. We are constantly optimising the funnel on our ecommerce platform magazinesdirect.com, and we know that just small changes, such as the way we display payment methods, can have a significant impact on conversion. In addition we work closely with customer care teams to not only ensure they provide the best service, but also capture all the key issues and reasons for cancellation, so we can work to resolve them.

Profiling

We use a variety of methods to capture data, but the most successful efforts are driven by our content. Most of our brands have a daily or weekly content email, and we use these to capture email addresses and data preferences across all our websites and social channels. For a number of brands, we’ll also collect additional data. For example, on Woman & Home we ask customers whether they are interesting in beauty, fashion, diet, or travel. That enables us to focus the content to increase their engagement.

Our HDP (holistic data platform) sits at the heart of everything we do, pulling together all customer interactions in one place in order to ensure a single customer view. We’ll overlay RFM (recency, frequency, monetary value) to identify our most and least engaged customers. That drives the contact strategy: new customers are served a “welcome series” (showcasing the brand rather than a straight sales message), highly engaged customers are sold subscriptions alongside additional products and services, and less engaged customers are nurtured and likely to receive low commitment trial offers.

Promotion

Over time we’ve seen a significant shift in sales driven from offline to digital channels, with big increases in PPC (pay-per-click), email and social channels. When it comes to promoting subscriptions, we find it’s not how beautiful our campaigns are, it’s how frictionless the experience is that drives response. Is it clear what the customer is signing up for? Is it obvious where they need to go? How straightforward is it when they get there?

We test every element of each campaign to ensure it’s optimised over time. For example, on email we know that urgency drives response, so we use daily and weekly deal promotions with a countdown timer. We’ve found that showing a range of covers rather than just one increases click through rates. Making it clear that customers can continue their subscription and cancel any time also drives significant increases in conversion.

Loyalty

In a business as mature as ours, renewing customers are responsible for 80% of our business, so this area receives our biggest focus. For us, loyalty starts at acquisition. We know that if we can get the customer’s authority to bill and take payments automatically we will achieve a higher lifetime value than one opting for a fixed term on a single payment. This is why we incentivise this decision by offering a higher discount for customers opting in to automatic payments. We often default to this payment type when we know customers are already engaged.

For customers opting to receive annual subscriptions, we segment as we do at acquisition, using propensity modelling to drive the contact strategy. In general, we find that key indicators for renewal are price paid, length of time as a subscriber, and acquisition channel. We use these indicators to tailor our communications. We also segment out subscriptions given as a gift, so that we talk first to the donor, and subsequently the recipient.

Pricing

Underpinning our entire marketing strategy is pricing. This is an area we continue to test as buying habits change. One size definitely doesn’t fit all and, as such, we use a range of prices and offers across our portfolio. In order to drive lifetime value, we use introductory offers for new customers—offering between 20% and 30% discount. And then, at renewal, we increase the price so that the discount is slightly lower: between 20% and 10%. Our biggest learning is that offers wear out—we need to update them regularly to keep driving acquisition.

Looking at the future, there’s never been a better time to launch a subscriptions proposition. With nine out of ten Brits choosing to subscribe to their favourite stores, brands, and services (this from a YouGov and Zuora study), adoption will continue well into 2019. From a marketing perspective, ever increasing amounts of data provide more opportunities to build that all important one-toone relationship.