How to Rotate Offers to Reach Former Subscribers

Posted by Stephen Jensen on Nov 11, 2015 9:00:00 AM
Former subscribers yield the highest response rate.

Reaching out to former subscribers is a smart use of marketing dollars.

But reaching this valuable group requires a precise and coordinated offer rotation strategy. Formers offer the highest return rates along with excellent retention rates. And if you include formers out to 36 months, this could be a large group.

Even more importantly, this audience generates the lowest cost per order (CPO), with the exception of voluntary new subscribers. The CPO for formers is between $20 and $40, with a response rate of 1-2%. In comparison, new acquisitions cost between $60 and $100, with a response rate of .5%. That’s why reaching formers is such an important part of any acquisition program.

Segment your formers list

To effectively reach this large and diverse group it helps to segment your list. Let’s start with your most recent formers, which includes those who have had a subscription within the past 12 months. For best results, this group should be contacted via direct mail 8-10 times per year. If you’re also running an email marketing campaign – and we recommend that you do – you’ll want to follow up each direct mailing with an email. Together, this adds up to about 16-20 touches annually. As this group ages, mail less frequently to keep CPO down, and to avoid wasting money on campaigns with less chance of success.

For year two prospects, trim your contacts down to four to six times per year. By year three, former subscribers look more like new acquisitions, and should be contacted once or twice per year. Mail more often than that and you’ll likely see diminishing returns.

Plan your offer rotation

Based on our years of running and testing newspaper programs across the U.S., we’ve found it’s critical to rotate your offer about every three months because response rates drop measurably when you send the same offer to the same group for longer than that. During the first year, you don’t need to make radical changes to your offer. Even modest realignments can work well.

For instance, for the first few months run a special “welcome back” offer at a discounted price per issue. Next, tweak your offer to call attention to your lowest available price per week. After that, try mentioning the percentage off the regular price that subscribers will save. These small adjustments during the first year will help your mailings get a second look.

After a year, however, more substantial offer changes are called for. For example, switching from a 13-week reduced rate offer to a 26-week offer at half price provides a better chance of showing a profit right away.

When you’re contacting formers whose subscriptions have lapsed two years or more, watch out for diminishing returns on Sunday-only and “bill me” offers. These can be losing propositions the later in the cycle a prospect gets.

Mix up your creative to avoid mail fatigue

When it comes to your creative, it’s best to rotate it even more often than your offers. We recommend mixing up your presentation every month for the first year. This includes both the envelope and internal elements. A winning category rotation example includes a mix of a #10 closed-face envelope, an exclusivity offer, and a more promotional style. Taking these steps reduces the risk of mail fatigue, which causes recipients to gloss over your mailing without absorbing the offer. Normal erosion occurs over time with any mailing group, but switching up your presentation will slow that process and yield better long-term results.

Mixing up your creative every month helps reduce mail fatigue.

Always be testing

And as always, be sure to continually test different versions. This is the only way to know for sure what’s working and what’s not. It will also offer you the insights you need to improve future offers.

Stephen Jensen, Co-founder, DRG
Stephen may be reached at sjensen@drg.com

 

Topics: Newspaper Mail Co-op, Direct Mail, Acquisition

Stephen Jensen

Written by Stephen Jensen

After several years working in the direct marketing field, Stephen co-founded Direct Resources Group with Scott Zorn in 1993. Today, he manages a variety of customer retention and acquisition programs for clients such as T-Mobile and The Atlanta Journal-Constitution, as well as donor acquisition and renewal programs for a variety of non-profit organizations.