Tailor your subscription offers to maximize margins

Posted by Stephen Jensen on Nov 6, 2015 11:46:43 AM

Your former subscribers aren't all alike. Your offers shouldn't be either.

Offering a discount to former subscribers is a good strategy for winning them back. But that doesn’t mean all formers need the same offer. Tailoring your subscription offers allows you to reach a wider range of subscribers while also maintaining healthy margins.

So maximize your margins and increase revenue by pinpointing the right offer to different groups using variable price point packages. This strategy will help you grow revenue incrementally while reducing churn.

Ease into deeper discounts

When contacting recently lapsed subscribers (those up to 90 days lapsed), start off with a small discount and test up from there. Since they are recent subscribers, they likely remember why they subscribed in the first place. Perhaps they overlooked a bill and didn’t intend to unsubscribe. Or they are on the fence about continuing their subscriptions and just need a slight nudge in the form of an attractive offer. But why give 50% off when a 10% offer will do? Easing into discounts helps protect your margins.

Subscribers lapsed for six months or more may require deeper discounts to return. But it’s better for your ROI if you introduce these deeper discounts incrementally rather than go with a one-size-fits-all pricing model.

One price does not fit all

Dynamic pricing is a solid strategy for boosting revenue. For example, for your most recent formers, try a single offer based on their last frequency and rate. For standard formers, go with a choice offer that conveys value to get their attention. For your oldest formers, consider offering a Sunday only last chance rate as a way to get them back in the door. New subscribers coming off of a promotional offer often require a bigger discount to bring them back, so consider 25% off for six months or something similar. But beyond 90 days, these formers return to your regular contact strategy or winback program.

Setting the right subscription price is essential. To increase revenue and profitability, looking at your subscribers at an individual level will help you deliver the right offer to the right person at the right time.

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.