5 Ways to Significantly Cut Subscription Renewal Costs
Whether you run a paid or controlled magazine, growing and maintaining your subscriber base is one of your biggest budget expenses.
Finding ways to cut subscription renewal costs has a big impact on your profitability. Assuming you operate at a 20% profit margin, every dollar saved in your circulation efforts is the equivalent of $5 of new revenue to your bottom line.
Each year, I help dozens of consumer, B2B, and regional publishers with their digital strategy. Subscription renewal is one of the first things that we look at because of the ROI. Here are five tactics that we often implement.
1. Use Auto-Renewal
Yes, this first tactic only applies to paid circulation publications, but don’t worry… the other four tactics apply to everyone.
Whether you personally believe in auto-renewal or not, the numbers don’t lie. The publishers I work with see a 75% renewal rate on average with auto-renew. In addition, their initial subscription conversion rate is still just as good as before the switch to auto-renew.
Think about it… auto-renew is exactly how Amazon Prime, Netflix, Spotify and other subscriptions work. I often hear publishers say that their market is different or unique, but frankly, this works in just about any paid circulation market niche.
When you sell an auto-renew subscription, don’t look at just the initial subscription revenue, but at the average lifetime value of a subscriber. For example, a $19.95 annual subscription with auto-renew equates to $60 over 5 years based on a 75% annual renewal rate.
That makes each new subscriber worth much more without the expense and effort of having to re-sell those subscribers each year.
To make auto-renew work, publishers eliminate the “bill me” option and only take a credit card. Auto-renew is not an "option" for subscribers. Rather, it is positioned as a convenience. Your subscription fulfillment provider must also support auto-renew and you need to be sure that you have the proper legal up-front and pre-renewal-billing notifications in place.
2. Conditional Renewal Notification in Your Email Newsletters
Your email newsletters are a free, untapped tool to help reduce subscription renewal costs. You simply put a conditional content block at the top of your email newsletter template that checks the subscriber’s expiration date. If you’re a controlled circulation publication, you set this as one year after the initial request date.
If a subscriber is within 60 days of expiration, for example, a notification block appears at the top of each newsletter warning them with a direct link to the renewal form. The block does not appear for other email recipients.
You can further expand this tactic so that the block turns red on the expiration date warning them that their subscription has actually expired. These conditional blocks automatically disappear after the subscriber successfully renews.
To make this work, you must use an email system that lets you put conditional content blocks in your email newsletter template. You must upload the renewal dates of your subscribers from your subscription fulfillment system into your email system either manually once a month or through a regular automated process.
There are a wide variety of subscription fulfillment providers and email systems out there… even some that combine the two functions into one system. This tactic is easier to do on some systems than others, so feel free to contact me if you’d like to talk about your specific situation.
3. Conditional Renewal Notification on Your Website
You can do the same type of conditional subscriber messaging on your website using a top bar or pop-up message. As with email, the conditional website message only appears if the current date is within 60 days of the subscriber’s expiration date (paid pubs) or one-year request anniversary (controlled pubs).
You can set the rules to change the notification another color or message when the subscription actually expires. The notification goes away once the subscriber renews and no one else ever sees the message.
If you’re using the right kind of CRM or marketing automation system, this kind of conditional website messaging is easy to setup. With other systems it is more difficult to implement, but there are workarounds. Again, since there are so many different systems out there, please feel free to contact me about your specific situation.
4. Automatic Subscription Renewal Email Sequence
This is a no-brainer and you don’t have to pay your subscription fulfillment provider to do it. In your email, CRM, or marketing automation system, just set up an automation sequence that triggers 60-days before the subscriber’s expiration date or request anniversary.
I typically recommend a four-email sequence over the span of the 60 days. Each is a dedicated email to the subscriber completely separate from your email newsletters. The last one is sent on the expiration date and is usually worded more strongly than the previous emails.
If the person re-subscribes at any time during the sequence, the automation ends and the person receives no further emails.
As with the conditional notifications, to implement an automated renew sequence, you need to sync your subscriber renewal dates with your email, CRM, marketing automation system. You also need an email or marketing automation system sophisticated enough to create these kinds of sequences. It doesn’t have to be expensive.
5. Automatic Facebook Subscription Renewal Campaign
Good email, CRM, or marketing automation systems also have the ability to automatically create Facebook ad custom audiences from your subscriber lists. With this, we take all of the subscribers within 60 days of expiration, sync them with Facebook, and run an ad campaign specifically focused on renewal on both Facebook and Instagram.
Your ads only appear on Facebook and Instagram to your subscribers who need to renew giving you yet another, cost-effective renewal channel. And once a subscriber renews, your email, CRM, or marketing automation system can automatically remove them from the Facebook custom audience.
Bringing It All Together
In some email, CRM, or marketing automation systems, you can bring all of these tactics together into a single sequence.
It can automatically start the conditional web and newsletter notifications and the dedicated email sequence. It can automatically add the person to your Facebook or Instagram renewal campaign. And it can automatically remove the person from the sequence once the person renews or after a specified time period.
Even if you don’t have the best systems in place for this, you can still do many of these tactics with a bit of extra time and effort. Or maybe this might be the impetus to finally get your systems where you need them to be. It doesn’t have to be expensive or complicated.
No matter what, start thinking about how you can use the web, email, and social media assets you already own to help reduce the cost of your circulation renewal efforts.