The Hard Offer Makes a Comeback

Folio: The Magazine for Magazine Management, Oct, 2000 by R. J. Lehmann

Seeking higher renewal rates and a more committed audience, 20 percent fewer publishers are using soft offers in their direct mail, says a recent survey.

At a time when the industry is more pressed than ever to drive subscription rates higher, an interesting statistic in the "CircTrack 2000" report, published by Capell & Associates in association with CM/Circulation Management, seems to indicate a counterintuitive trend--the return of the "hard sell" offer.

In 1998, 80 percent of "CircTrack" respondents said they were using a softer sell, including complimentary copies, sweepstakes or a premium, to market subscriptions. In contrast, last year's "CircTrack" study revealed that only 60 percent of respondents were using a soft offer.

The 20-point swing is a surprise to some observers. Says Jennifer Gulhane, circulation director for Time Out New York, "I think we've seen much more the opposite trend, where most books are so desperate to build circulation that they would all but give away the thing," she says. "It may be something that's regional, and we're simply not seeing it in New York. Or it may be that the kinds of offers we tend to think of as hard sells are now called soft sells. In either case, it's not what I've seen from my perspective."

But others have noticed a trend and say that consumer marketers are most likely using a harder sell in order to boost industry-wide renewal percentages. Overall, renewal rates have been on the upswing--but 66 percent of consumer magazine subscribers still fail to renew after their initial term, according to the latest "CircTrack" numbers. Plus, some say, publishers are spotlighting the prestige of selling a more targeted audience to advertisers.

"A subscriber who buys a hard-sell offer tends to be one who will renew the second time and the third time around," says Michelle Givens, circulation director, Outside. "But more than that, for those of us who are working in a niche interest market--and that describes just about everyone these days--having a high percentage of full-price subscribers is seen as a committed market. These subscribers are more likely to buy services and products associated with the interest than those who bought because of a special offer."

This isn't a trend solely confined to special-interest titles. Monica Winn, consumer-marketing director for Time Inc., says that a number of their titles have been moving away from certain kinds of soft-sell offers: "We saw that a lot of the 'risk-free' work simply was not paying for itself, and we definitely wanted to get away from the sweepstakes stuff, so yes, it's something I've noticed," Winn says. "That said, the 'CircTrack' numbers still seem a little weird to me, because I think a lot of what we and other people have gotten away from has been replaced by online offers, which also are risk-free. Some of our titles have created partnerships that fall under the same heading. So I can't say I expected there to be that big a change."

Publishers may be shifting away from soft offers in direct mail, but outside of the mailbox, soft offers abound, says Newsweek circulation manager Stewart Eisberg. The addition of online offers has actually increased the magazine's soft-sell options, rather than narrowed them.

"We're certainly not pulling back in our marketing efforts or the kinds or quantities of special offers to subscribers; if anything, those have been increasing," Eisberg says. "It's something I have heard about other publications moving toward, but only anecdotally."

He adds that the shift is more likely to be evidence of a period of transition, rather than a full-blown industry trend: "The bottom line is that it takes a few years to really see if discounts and other offers will pay for themselves. What we might be seeing is a case of a lot of people scrapping their old plans when they see they simply aren't profitable, and going back to the drawing board," Eisberg says.

"But," he says, "I think soft sells are still the norm, and they will be back in even greater force once some of these marketing teams come up with some new ways to pitch them."

COLLECTING THE CASH

When it comes time to pay the bill, readers who subscribed via a hard offer have a much better track record than those who responded to a soft offer.

Direct Mail Pay-Up Rates

Sweeps: 55.4%

Premium: 52.4%

Comp Copy 48.2%

Hard Offer 63.1%

SOURCE: "CIRCTRACK 2000"