Proven Tactics for Converting Renewals to Continuous Service

Byline: BELINDA LOPEZ

Since its launch in 1998, we've taken an aggressive approach in growing the rate base of ESPN The Magazine. The rate base has risen from 350,000 five years ago to 1.65 million today, and at the root of this growth is a successful marketing strategy. Along with innovative subscriber acquisition programs, we have developed an ideal renewal program.

Having launched a traditional renewal program with quality creative elements, an optimal number of efforts, effective timing, and a drive to extended or multiple terms and cash payment with order, we decided to seek a more cost-effective solution that would ultimately transform the way we do business. Thus began our venture into continuous service (a.k.a. automatic renewals).

Unlike a traditional renewal program, continuous service shifts the focus from obtaining the renewal to obtaining the payment. At the point of "contract," a subscriber agrees to have his subscription renewed automatically just prior to expiration. The entire renewal series is eliminated for those subscribers who sign up, which greatly reduces a publisher's renewal expenses. Upon delivery of the first issue of the new term, the subscriber is billed for the renewal. In essence, how they "renew" is determined by how they pay.

In developing a continuous service renewal program, we wanted to create a series that would highlight the advantages the program offers subscribers. Our creative evolved around a benefit plan carefully and clearly explained in the first effort of the series. The benefits include:

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Convenience and service: The subscription will continue, without interruption, until the subscriber tells us to cancel it.

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Savings: A discount of at least 50 percent off the newsstand price for the life of the subscription.

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Less paperwork: No more renewal notices.

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Choice of payment options: Subscribers may choose to pay by check, money order, or we will bill them.

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Satisfaction guaranteed. They may cancel at anytime and receive a full refund on all paid but unmailed issues.

With every effort, we were careful to make it clear to the subscriber that by choosing to renew, thus accepting to join the continuous service program, they agree to be automatically renewed and billed year after year until they cancel. To further enhance the appeal of our benefits package, we created a name that evokes exclusivity, the "Inner Circle."

The testing phase for the "Inner Circle" program consisted of a three- way split between the control (traditional series), continuous service with a cash/bill me/credit card option on the renewal document, and continuous service with a cash/bill me option only on the document. The program was tested on two separate groups within a two-year period. The continuous service cash/bill me option beat the control with 4 percent and 10 percent lifts. Only heavy credit card sources (such as TV, Internet) experienced a marginal lift with the cash/bill me/credit card option.

The next communication with the "Inner Circle" subscribers was the legally required "link letter." This package or postcard is mailed at the time the subscription is automatically renewed - usually one month prior to expire - and is a notice to the subscriber reminding him that he agreed to become an "Inner Circle" subscriber with guaranteed, uninterrupted service. The term and value for the new subscription period is stated and the subscriber is notified that a bill will be mailed shortly.

Between the "link letter" and the first effort of the bill series, we again correspond with the subscriber through a "pre-bill" effort. This effort, like an acknowledgement, is a statement of the new subscription period, term and value, and gives the subscriber the opportunity to send payment. Over 20 percent of "Inner Circle" subscribers send payment on this effort.

With the successful testing of continuous service behind us, a rollout was completed in March 2002. Since the rollout, we have seen a lift in new business conversions by 20 percent. The success of the program is due to the clear and upfront explanation of the program and the benefits to the subscriber. The creative series fully discloses the details of the program in every effort. It sells the program as a benefit package highlighting the convenience of uninterrupted service. Adopting a name helps subscribers identify with it, enhancing the feeling that they belong to an elite group. We have also developed a logo for the program, to help build recognition and loyalty, year after year. Together, all of these elements reduce the confusion and dissatisfaction a subscriber may experience at the time of billing. This translates into fewer customer service issues and increased renewal rates.

Building an auto-billing continuous service program means that the renewal rate is dependent on the success of the billing series. We developed a separate billing series for our "Inner Circle" subscribers. In the bill copy, the subscribers are reminded that they are in the continuous service program and their subscriptions have been automatically renewed. We have also expanded on the success we have had with continuous service by including a sign-up option in our billing series for all new business sources. Based on testing to date, continuous service with auto credit card was not successful.

Here are some key elements for building a successful continuous service renewal series:

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Make sure the offer is clear and upfront.

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Give your subscribers something to identify with.

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Always send a "link letter" - reminder mailing/postcard - at the time of the automatic renewal; this is a legal requirement.

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Focus attention on the billing series.

Keep in mind that the continuous service option will not work for all. The product and target audience are the ultimate determinants for program success.

Belinda Lopez is Senior Manager, renewals, billing, gift for ESPN The Magazine