Canadian Magazine Industry News
25 May 2009,     TORONTO
Subscription strategies that are actually working
Paid circulation b-to-b magazines are rare these days, but with ad dollars plummeting, it's possible that more publications will start looking for ways to collect revenue directly from readers.

Sonia Kalra, circulation and marketing manager of Reed Construction Data Canada, is responsible for two titles that focus on Canada’s construction industry: The Daily Commercial News, which serves eastern Canada including Ontario and has a paid circulation around 2,400; and The Journal of Commerce, which serves western Canada, appears twice-a-week, and has a paid circulation around 1,000. A one-year subscription to the Journal costs $895, while the Daily goes for $1,199.  Over the past year, the Journal has seen a 14% year-over-year increase in paid subscribers while the Daily has seen a 3% boost to its paid base. The keys to Kalra’s circulation success? Pre-authorized payments, trial subscriptions, and—get this—faxing.

Back-of-the-envelope calculations put subscription revenues for the DCN around $2.1 million.
Pre-authorized subscriptions

Over the past year, Kalra has been developing a system of pre-authorized payments, where readers allow the company to charge their credit card monthly. Currently, about 17% of Reed’s customers are on pre-authorized payment plans and the renewal rate for this pool of subscribers is 95%. “To do a pre-authorized payment plan, you have to have a high frequency,” Kalra cautions  “If you’re a quarterly, it might not work as well. But it’s something that people should look into.”

Trial subscriptions
Kalra maintains a rotating controlled circulation list that she uses to drum up new business. A select group of industry professionals receives one edition of the paper each week for two months and is sent a series of four solicitation letters. After the trial is over, Kalra sends a fifth letter, once again asking the reader to consider a paid subscription. The response rate for these trial subscriptions is around 4%. “It takes about 7 or 8 hits before [readers] make a decision. You’ve got to keep hitting them with powerful messages,” Kalra says.

Faxing
Though faxing may have fallen out of fashion in the Internet age, Kalra points out that it only costs two cents to fax a sheet of paper. While the response rate is low, ranging from 0.1%-0.7%, the cost of acquiring a subscriber via fax is about $50, compared to about $350 for direct mail, Kalra says. Fax blasts are done in conjunction with mail-outs; two weeks after a potential subscriber receives a subscription form through Canada Post, Kalra sends a second form via fax. She advises that faxed subscription forms should be made to look like regular faxes, adding that “a lot of people go wrong having their faxes made to look like a promotion piece.” Fax blasts, Kalra says, have cut Reed’s costs by $200 per order. “It was a matter of us looking and saying, ‘How are people responding to us?’” Kalra says. “Are they responding and sending us messages back, or taking our forms and faxing them back to us? Why not communicate the way they like to communicate?”
— Lora Grady
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