When thinking about optimizing ROI from incentive-based subscriber acquisition programs and related budgets for your specific business, experimentation will be necessary. While your actual mileage may vary, the following are guidelines for consideration. As in any organization, there are multiple competing priorities for each usable dollar. With that in mind, and because we believe all expectations should be conservative in nature, we recommend the following parameters when deciding on the appropriate spend:
- Behavior change promotions (autopay enrollment, subscriber acquisition programs, early subscription renewal, etc.) should have an expected promotional “lift” of 315-405 percent versus a control group where no promotional incentive is offered, subject to the same other population variables. (e.g. instead of having 1,000 subscribers enroll in autopay, the organization can reasonably expect to have 3,000 to 4,000 subscribers enroll in autopay during the term of the promotion.
- Incentive-based subscriber acquisition programs and promotions should have an incremental sales “lift” of 32-40 percent versus a control group where no promotional incentive is offered, subject to the same other population variables.
- 5% of total sales revenue excepted to be achieved from promotion
- 5-10% of incremental sales revenue
- 12-24% of incremental profit
- 15-25% of cost savings in a cost-reduction program (autopay incentive is an example of an increased revenue and cost-lowering promotion)
Subscriber Acquisition Programs Subject to ABC Rules
It is important to remember that subscriber acquisition programs and promotions are subject to the ABC (Audit Bureau of Circulations Committee) and its governing rules to ensure a publication does not risk a reclassification of subscriber revenues to excessive subscriber rewards. That said, for subscriber acquisition, a promotional gift equal to 25 percent of the subscription purchased falls within ABC guidelines and also acts as a noticeable and desired motivator for the prospect.
With gift card promotions, the participation of national brands (restaurants, retailers and gas) lend additional promotional credibility, enabling the organization to not have to pursue larger promotional gifts to motivate action.
As it relates to basic subscriber acquisition behavior promotions (autopay enrollment, new subscriber acquisition, advanced subscriptions, etc), statistically, the utilization of national brands (restaurants, retailers and gas), enables the organization to have the promotional program noticed and participated in for lesser reward offered (e.g. “Receive a $10 gift card from Subway, Chili’s, Exxon/Mobil or Kohl’s” will outperform a $20 discount or free subscription months valued at $25 to the subscriber).
Want other ways to understand ROI from your subscriber acquisition programs? Please see our recent white paper that explains how incentive marketing approaches are addressing longtime subscriber acquisition needs within the rapidly changing publishing industry.