By Robert W. Bly
We are now well into the Information Age, and the rise of the Internet has only accelerated the proliferation of free information. The resulting information glut and increasingly rapid access to online content create an especially challenging environment in which to sell subscription newsletters and other high-priced information products.
Theoretically, information products should be the easiest and most profitable items to sell online. Information is virtually the only product that can be delivered electronically over the Internet. A paperback book ordered on amazon.com has to be packed and shipped in the physical world. But a newsletter can be converted to a pdf file and sent electronically as an attachment to an e-mail. Production and shipping cost: zero. Profit margin: high.
Yet in reality, newsletter publishers have met with extremely limited success marketing their publications online. Why is this so? Three reasons.
First, although the Internet today is becoming accepted as a medium for commerce, this was not always so.
The Internet (see Fig. 1) originated as a non-commercial medium for the exchange of scientific and technical data. Next, through online services such as CompuServe and Prodigy, the Internet became a medium for personal communication.
Marketers began experimenting with the promotion of products in unsolicited e-mails and in newsgroups, meeting with sporadic success and frequent flaming. Attorneys Martha Siegel and Larry Canter made a splash (not positive) in the Internet community as early spammers; they marketed immigration services online.
Next, permission marketing came onto the scene, and it became OK to advertise a product to someone on the Internet as long as they had agreed to let you.
So although commerce has become an accepted practice on the Internet, it is still not palatable to many users who believe in strict rules of netiquette. Traditional hard-sell subscription marketing is unfamiliar to, and not universally accepted by, the online community.
Second, the culture of the Internet is one of free and open information exchange. To hardcore Internet users, the idea of paying for content is both alien and repugnant. “Information should be free” the Internet people claim -- a position directly in opposition to our objective, which is to make money selling information.
Worse, a visit to the Internet shows that information is indeed free. Apparently thousands of individuals and organizations have been bitten with the Web site bug: the desire to put up a Web site offering free information and communication about a dazzling array of topics ranging from options trading to Star Wars. And they seem happy and eager to do this without financial compensation of any kind.
Third, the proliferation of Web sites offering free information over the Internet is part of a broader trend: information overload. Our prospects are bombarded by a sickening glut of content that threatens to overwhelm them. Everyone today has too much to read -- and not enough time to read it.
But prospects don’t always see it this way. When they get your direct mail package, their knee-jerk reaction is, “Oh, no. Not another subscription offer. Another publication is the last thing I need” -- and they toss our carefully crafted message aside.
We’re also fond of pointing out that we’re not just another source of data, but that we convert data, through analysis, into meaningful information and actionable ideas. But consumers again don’t often see us this way, and you should question whether your newsletter really lives up to that promise.
What’s a newsletter publisher to do? One option is to give up trying to charge for your information. Give it away for free, and try to operate with a model in which the revenue comes from advertising, not subscriptions.
There are success stories here, but they are relatively few and far between. One of the big winners is TechTarget, which publishes 19 e-zines on various topics of interest to Information Technology (IT) professionals. The e-zines are free; TechTarget makes its money from advertising, for which they charge over $100 cost per thousand (CPM).
If you’re an old-fashioned information marketer, and want people to pay for the words you produce, here are some suggestions for staying profitable in today’s market:
* Get the money up front. Get a check or credit card with order. If you want your offer to seem softer, get the credit card information, but don’t charge the subscription fee to the card until the trial period is over.
Joe Karbo invented this technique decades ago in his “Lazy Man’s Way to Riches” ads. The copy promised not to cash the customer’s check until the trial period was over -- and, if he wasn’t satisfied, Joe would mail back the check uncashed.
Jay Abraham used a similar technique in marketing high-priced bootcamps. Instead of cashing your check, he would bring all the checks to the seminar and leave them in a pile on a table in the back of the room. If you were not satisfied, you could just pick up your uncashed check and go home.
Because most of us sell information that is valuable but not absolutely essential, it’s too easy for a “bill me” customer to not pay up when the invoice comes. By getting the money up-front, the whole question of pay-up rates is eliminated before it starts.
* Use more generous guarantees. The standard guarantee in newsletter subscription promotion used to be a 30-day risk free trial. If you were not satisfied, you could cancel within 30 days, get your money back, and keep the issue or two that you received. After that, you couldn’t back out.
Faced with declining response rates, newsletter publishers improved their guarantee. Some offered a 90-day risk-free trial. Others went further: If you canceled within 90 days, you got all your money back. If you canceled after that, you got a refund on the unused portion of your subscription.
Now a tight marketplace and tough competition have pushed newsletter guarantees to the highest level possible: the unconditional lifetime guarantee of satisfaction. If you are not satisfied, you may cancel at any time (even on the last day of your subscription), get all your money back, and keep all issues and bonus materials received -- in effect, ripping off the publisher.
* Short-term trial offers. At $259 for a 1-year subscription, the weekly Dow Theory Forecast is relatively expensive as far as general stock market newsletters go. To overcome price resistance, they offer the option of a 3-month trial subscription for $79. The idea is to eliminate “sticker shock” caused by a high purchase price. Online information marketers do this by offering subscriptions on a monthly basis as well as an annual basis.
About the author:
Bob Bly is a freelance copywriter and the author of The Complete Idiot’s Guide to Direct Marketing (Alpha Books). He can be reached at 201-385-1220 or at email@example.com.