Study: publishers should sell print subscriptions online with credit cards
Wednesday, February 4th, 2004
“The cost of acquiring a subscriber historically has been lowest in telemarketing, but that doesn’t factor in how long you keep the subscriber,” said John Murray, vice president of circulation at the Newspaper Association of America. According to an NAA study, new subscriptions generated through telemarketing have a retention rate of 28% after one year, the weakest result of all marketing tools.
But when a subscriber signs up over the Internet, the retention rate after one year jumps to 51%. Direct-mail and carrier solicitations, meanwhile, retain customers at a rate of 50% and 53%, respectively, after a year. Those who sign up unsolicited, known as “voluntary” subscribers, have a 60% retention rate.
The most effective way to hang on to subscribers is by offering so-called easy-pay programs, in which subscribers are automatically billed on their debit or credit cards. Those programs have retention rates of 85% and 79%, respectively, the NAA study found.
Despite those high rates, industrywide less than 5% of newspaper subscribers pay by credit card. “The low usage of easy-pay appears to be attributable to a lack of promotion,” said Fred Searby, newspaper analyst at J.P. Morgan, in a research report.