Section 4 Tips and Techniques for Increasing Your Renewal Rates

I’m not a smart guy, but I know a lot of smart people. So when I’m writing these
articles for DM News, my research methodology often consists of e‐mailing
some of the folks in my address book who have knowledge about the topic
worth sharing and asking them for a contribution.

In this week’s article, I’m going to share with you some renewal strategies and
tactics that have worked for others—and therefore, that might work for you too.

I began by asking Doug Hill, marketing director at KCI, a publisher of financial
newsletters, to tell me about his best renewal mailing.

“Itʹs a renewal we call ‘Oops, we goofed,’” says Doug. “Back when I was
Personal Finance product manager, we were increasing the price. But before we
did so, we were allowing subscribers to renew at the current pricing.


“In one of the efforts there were two efforts initially, but it worked so well we
extended it to six I said, ‘This offer is good until February 30.
Yeah, I know. It was a real oversight. But we got lots of mail about it. So I rolled
out another effort with the ‘Oops’ headline. It killed.”

Years ago, I wrote a blanket renewal—sometimes called an advance renewal
for an investment newsletter. In this case, the newsletter was switching from 8 to
12 pages, but the publisher was not increasing the price. I decided to focus on
that in my headline, which read something like: “We are increasing from 8 to 12
pages, which means our printing costs will go up 50 percent…but we won’t
charge you even one dime more!” I don’t have the numbers any more, but the
publisher told me it was an extremely successful mailing.

“In my 38 years of circulation experience, Renewal‐at‐Birth is one of my
favorites to write,” says circulation promotion expert Dr. Andrew Linick
(www.AndrewLinickDirectmarketing.com). Why? Because before the
subscriber gets that first magazine, you can mail out a renewal notice with toned
down copy for a very special, low‐keyed offer.

The perception of an excellent publication where the benefits outweigh the price
is the number one factor in making a renewal ecision. While we’re talking about
response, realize that it’s easier to increase the average dollar amount of a
renewal than it is to increase the percent of response.

You are asking subs to renew when their emotions of excitement and anticipa
tion are at the highest right after they’ve signed up for a new subscription. You can ask them to renew

for a specified period of time at the full rate or at a discount but you should offer
a valuable preium tied into the theme of the publication. If the premium offered outweighs the price of the renewal you’ll increase your percentage of renewals
substantially.

By creating an irresistible up‐sell offer way in advance, you’ll save a ton of
money in later renewal effort costs. How you get the sub to take out a longer
term of service is key and requires creative brainstorming. The more options you
can offer on the renewal order form (e.g. 4 months, 7 months, 12 months, 2‐years,3‐years the better the response you’ll get. If you tie in a good, better, best
premium (for the three year renewal) to each term and save the most expensive
premium you can afford for the 3‐year term, you’ll get more paid renewals at thelonger term.

This is one of the most difficult mailings to write. The tone of your copy is key
here. Serious mistakes can creep into your copy and turn off the subscriber if
you are too eager by asking for money again after shes just paid for a new sub.
Your copy should suggest you are doing your subscriber a big favor by inviting
her to renew NOW. Plus by renewing NOW, she’ll be protected against future
subscription rate increases and won’t miss out on the bonus 450‐page double issue listing the Who’s Who in her industry by state including e‐mail and Web
addresses. Or if you must go for a ‘best deal’ discount offer, i.e., save 71% off the
cover price and renew for two full years for only $28. (When printing on
recycled paper add a line that you printed on recycled paper—that’s a plus!)

For newsletters, you can increase renewal rates by offering a special renewal pre
mium. Heather Downey of The Oxford Club says, “I have seen a noted increase
in response when I offer a special premium with the auto‐renew offer. These
have been anything from a 40‐page booklet on investing in China to a 16‐page
premium with a single stock pick. Iʹve used these most effectively in e‐mail
which allows me to make changes as needed.”

I have always shied away from giving merchandise premiums for renewals. But
a number of publishers report good results with them. Bill Dugan, general mana
ger of the Pohly Company, told me, “One of the best renewal promotions


I’ve ever done was a blanket renewal offer offering an executive pen and letter
opener set—very profitable and easy to implement.”
Sometimes a lift in renewal rates can come not from a bribe or discount offer, but
from the messaging. Copywriter Herschell Gordon Lewis says, “My most
successful strategy is ridiculing the idea that the subscriber wonʹt renew,
coupled with a timely, specific reminder of what outsiders will miss.”
Graphics and offer can also increase renewal rates. Copywriter Clayton Make
peace reports success using simulated invoices, simulated final notices, and
sweepstakes.

Another way to lift response to your renewal series is to use more than one
medium. “When sending out your renewal letters, use more than one avenue to
reach your subscribers,” says Craig Simpson of Simpson Direct. “Send an e‐mail,
postcard, and if you really want to bump your renewal rates, give the subscriber
a call.”
According to Simpson, the most effective way to generate renewals is by using
an auto‐billing renewal system. This means that when you initially sell the sub
scription, you let the subscriber know that they’ll automatically be renewed.

For example: “The cost for a quarterly subscription is $X per quarter and will be
conveniently billed to your credit card each quarter. You may cancel at any time
for a pro‐rated refund.” This type of auto‐billing offer generates an 80 to 93 per
cent renewal rate, says Simpson.

For advance renewals, always place the renewal effort within the issue envelope,

advises consultant Jeff Greenberg.

“Advance renewals more than double your regular renewal efforts,” says Green
berg. “It also brings in tomorrowʹs cash today and dramatically increases
renewal rates. Donʹt worry about having renewal expires out a few years; these
subscribers are more likely to renew again before anyone else.”

Circulation consultant Paul Goldberg says that a key to renewals is not to make
the offer more generous as the renewal series roceeds.

“Always give your renewal prospects the best offer on your first effort,” says
Goldberg. “For example, offer two extra issues or a premium for renewing on
the first effort.”

Adds Goldberg: “If you have e‐mail addresses, an e‐mail blast before the first
effort is usually very effective. If you are using telephone, I find it more effective
in the middle of the renewal series rather than at the end, where most publishers
use it at a reduced rate.” Also, be careful about stepping up your rates too
quickly from introductory prices on conversions, advises Goldberg: “A two‐step
and sometimes a three‐step route to full price is more desirable.”

Copywriter Mike Pavlish agrees that the offer should never be made more
generous in the later renewals than it is in the firsteffort. His renewal letters
typically state, “This is the lowest price you will ever be offered—guaranteed
so make it easy and respond now while itʹs in front of you!”

“Whenever Iʹve tested this language against not having it in the renewal, it has
increased renewal rates significantly,” says Pavlish. “If you donʹt push this,
many people will wait, thinking they will be offered a lower price later.”

Not only should the later efforts in the renewal series not make a more generous

offer than the first effort, but the offer should gradually become less desirable,
i.e., discounts are lessened and some bonuses are removed.

“I like to make several efforts a ‘last chance’ to get something,” says Marlene
Jensen, CEO, Pricing Strategy Associates. “For example, ‘Last chance to get this
bonus,’ ‘Your subscription expires next issue,’ or ‘Last chance at this low rate.’”

“I find raising the price—actually, itʹs reducing the discountworks great to
pull in laggards, especially those that hold on to the notice just to see if I really
do raise it, then quickly send it in when they see the higher price,” says Jensen. “
And, I still get a number of subscribers later, with the higher price apparently no
problem. And the extra cash is just a nice little bonus from these obviously not‐price‐sensitive subscribers.”