Lining Up New Allies

Folio: The Magazine for Magazine Management, May 1, 2002 by Bridget C. Wells

Byline: Bridget C. Wells

Since the collapse of sweepstakes, circulators have been trying to fill a vacancy in their marketing alliance line-ups. Now that more flexible audit rules allow for some pretty creative unions, publishers are out shopping for partners to fill the void. But before you jump into a relationship, there are a number of guiding principles to consider that will help you pick the right cohorts and structure deals that keep everybody happy.

Obviously, the idea of partnering is not new. People and companies have been joining forces for years. But what makes a successful partnership? How do you spot the best allies? In today's tough circulation climate, how should deals be structured? And how long does it take to get a program up and running?

In a successful partnership, all parties have the same ultimate goal and a solid direction to follow. Everyone knows what is being sold and how to go about reaching the intended audience. In addition, all parties benefit equally. If one player feels slighted, the partnership is doomed.

For example, if a deal is constructed in which the partner takes most of the revenue, while the magazine takes little or none, the magazine must weigh the actual benefits. Are the subs being channeled through this deal major contributors to the maintenance of the magazine's ratebase? And is that enough to counter the loss in circulation revenue? Can this circulation replace something else that costs more?

how to find your match

Finding the right partner is by far the most difficult task. When trying to build a program, think about how to structure the deal so that the partner will benefit as well as the customer. Ask yourself, "Who is the end user? How does my editorial product affect that user? Who reaches that audience now?"

Be sure the fit feels right. For example, partnering with a company that sells tickets for sporting events would make sense for a sports magazine. Is there a means by which a season-ticket holder to a sporting event - baseball, for example - might also receive a subscription to a sports magazine?

Another example: A bridal magazine could partner with a store that sells bridal dresses and accessories. The customer would receive a one-year subscription when she buys her dress from XYZ Bridal Shop. In this case, the cost of the magazine could be wrapped up with the sale of the dress. Or perhaps there could be a special reduced price for those who buy at the store. In this case, everyone wins - the consumers receive a useful tool, the store gets a sale it might not have had otherwise, and the magazine gets a new customer who will find value in the editorial and advertising.

Publishers can also partner with stores that offer their own credit cards. Neiman Marcus, for example, has offered magazines to customers who spend a certain amount on their Neiman Marcus cards. In this case, Neiman has several levels of giving. If customers spend $1,500 annually on their credit card, they may select from several products, some of which are magazines. Neiman also has a "Gold" program in which it offered even more products that also include magazines. Titles currently included in the program are Town & Country, Architectural Digest and Harper's Bazaar.

how to construct the deal

The new Audit Bureau of Circulations rules provide versatility. Test the limits of this new-found freedom. In the case of the season-ticket holder, try tying the price of the subscription to the price of the ticket. Make it deductible, and the person decides whether or not to include the magazine with the price of the ticket.

Another option is to provide a "special" reduced rate for season-ticket holders. "Buy your season ticket and get the exclusive reduced subscription rate of just $X for a full year." This combination purchase makes sense when the price of the magazine can be reduced for the benefit of the buyer. In this instance there would probably need to be a revenue share of the magazine sub with the ticket seller to make it attractive.

Try working with credit card companies to upsell magazine subs when someone calls to order a product that has an affinity with your title. Synapse Group has been partnering with catalog companies to do this through its Magazine Direct program. Publishers may want to consider this as well. In this case, revenue shares are critical to the partner. If the subscription can be turned into a continuous renewal, consider a deal that allows you to break even (or lose money) in year one in order to make money in the future.

Amazing matches are not manufactured overnight. You may need one or two years for a program to begin producing significant volumes. Companies that are attractive to partners may never have considered combining a magazine with the sale of their products. They need to be educated on the benefits. Remember, creating win-win-win - where the magazine, the partner and the consumer all walk away with something of value - is key. Don't rush. The best programs take time to develop and implement. But the payoff is worth the wait.