Can you make more    money from yourDirect Debit subscribers?         Cheryl Brown     Subscription Solutions
IntroductionsI am going to present a case study of the work I havedone at Time Out.I have been working with Time Out since...
Time Out and Direct DebitsI started working with Time Out by doing a complete review of theirsubscription activity for the...
Direct Debits – Price and TermThere are 7 issue prices that contain 73% of all the Direct Debitsubscribers.   4 issues for...
Understanding Annual renewal rates  Renewal rates for Direct Debits are always quoted on a  per cycle basis.    A 4-issue ...
Direct Debit – Renewal Rates by          term/price                        •   Revenue per                            copy...
My Role at Time OutTo help Time Out stabilise and grow their subscriber base,which represented 60% of total circulation.De...
Plan after 6 months!“A price increase of £0.45 on one group of the 4issue Direct Debit subscribers will generateanother £3...
A Captive Audience!! With the Finance Director andPublisher in the room they were  sold on the plan to increaseDirect Debi...
How I got started?1. Analysis   I had reviewed many reports as part of my annual plan     Renewal by Direct Debit term and...
Dovetail ReportingI didn’t do this alone.  Worked closely with Account Management to  identify the correct reports.  “Auto...
Automatic Payment Analysis ReportCurrent Payments AnalysisClient:           TOUT        TIME OUT MAGAZINEPublication:     ...
Automatic Payment Analysis Report                                                                Years onPayment Type Zone...
Automatic Payment Analysis Report                       – cont..Number of No issues 1 issues      2 issues       3 issues ...
Using the Automatic Payment report  Group subscribers by issues to determine opportunity    Looked for people who had been...
Looking at term 4 issues for £7.50                                     Years on             Pending   Pending       curren...
How I got started?2. Created “What if analysis?”    What if…      I increased the price by £0.45 and maintained renewal   ...
Why do “What if’s”?To determine where the opportunities were toincrease the price.To calculate your risk.To know your brea...
How I got started?3. Put a test in place  The initial plan was to mail a 10% cross section of the file.  The plan was to b...
How I got started?4. Marketing communication plan tosubscribers The Direct Debit rules are you need to notify subscribers ...
The carrier sheetThe tone of the letter was very soft as it was from the editordiscussing what was in the current issue an...
Timing is key!Timing the carrier sheet was key.As Time Out is a weekly we had to select a week thathad enough subscribers ...
Results to the test96% overall renewal rate to the higher price  4 issues subscribers renewed at 97%  12/13 issue subscrib...
Next Steps – Roll outDuring the initial group I had various price teststo see how far we could push the price – anaddition...
Results to the next week97% overall renewal rate from the Direct Debit subscribers  4 issues subscribers renewed at 97%  1...
….and the next week97% overall renewal rate from the Direct Debit subscriber   4 issues subscribers renewed at 98%   12/13...
….and the final week97% overall renewal rate from the direct debit subscribers   4 issues subscribers renewed at 99%   12/...
Total ResultsIncreased the price for 13,358 subscribers.Generated an additional £12,400 in revenue to the 4 issuesthat wer...
Next StepsTo capture as much of the balance of the file  Used the same text as carrier sheet but Dovetail set up  and mail...
Things to rememberDo your own numbers.Ensure you factor in the additional costs to the promotion.Make sure the increase is...
Thank you for listening!Cheryl BrownSubscription SolutionsTel: 07808 182 701www.subscriptionsolutions.co.uk
How to make more money from your Direct Debit subscribers
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How to make more money from your Direct Debit subscribers

  1. 1. Can you make more money from yourDirect Debit subscribers? Cheryl Brown Subscription Solutions
  2. 2. IntroductionsI am going to present a case study of the work I havedone at Time Out.I have been working with Time Out since 2010 helpingthem manage and grow their subscriber base.At the time, Time Out had just over 30,000 subscribers.
  3. 3. Time Out and Direct DebitsI started working with Time Out by doing a complete review of theirsubscription activity for the previous 3 years Renewals – CWO & DD Acquisitions – all sourcesAs part of my initial 3-year review I discovered the following inregards to their Direct Debits: 90% of the subscriber file was on Direct Debit. Average cycle renewal rate was 93%. A large number of customers were paying a low rate. A large number of customers had been paying the same rate for over 5 years. There were 77 different Direct Debit price points. However, 7 prices contained 73% of the Direct Debit volumes.
  4. 4. Direct Debits – Price and TermThere are 7 issue prices that contain 73% of all the Direct Debitsubscribers. 4 issues for £6.50 – 1032 subscribers 4 issues for £7.50 – 6678 subscribers 12 issues for £22.50 – 5282 subscribers 13 issues for £22.50 – 2117 subscribers 51 issues for £50 – 1381 subscribers 51 issues for £63.75 – 2185 subscribers 51 issues for £69.99 – 924 subscribersThey all had different cycle renewal rates which lead to varyingannual renewal rates.
  5. 5. Understanding Annual renewal rates Renewal rates for Direct Debits are always quoted on a per cycle basis. A 4-issue Direct Debit renewal rate of 98% is not the true picture. Once it’s annualised it’s actually just 80%! Key to managing a profitable Direct Debit file is to limit the number of times you debit customers account. Annual Direct Debits are always the preferred term but can be seen as the most expensive for a weekly. Over 74% of Time Out Direct Debits were on a 4 and 12/13 issue cycles allowing subscribers several times to cancel a year!
  6. 6. Direct Debit – Renewal Rates by term/price • Revenue per copy ranged from £0.59 to £1.88! • Annual Renewal rates ranged from 54% - 90%!
  7. 7. My Role at Time OutTo help Time Out stabilise and grow their subscriber base,which represented 60% of total circulation.Devise a marketing plan to acquire new subscribers andensure renewal rates were maintained/improved.But, Time Out had issues Lack of solid acquisition routes Lack of budget Declining subscriptions volume Static newsstand salesRenewals were never the issue but I happened to mention inmy presentation of the yearly marketing plan the following …
  8. 8. Plan after 6 months!“A price increase of £0.45 on one group of the 4issue Direct Debit subscribers will generateanother £32,000 in revenue in first year.” and“There is a potential of adding at least £40,000to the bottom line by increasing Direct Debitpricing across the groups by £0.45p.”
  9. 9. A Captive Audience!! With the Finance Director andPublisher in the room they were sold on the plan to increaseDirect Debit prices and generate £40,000!
  10. 10. How I got started?1. Analysis I had reviewed many reports as part of my annual plan Renewal by Direct Debit term and price. How long has subscribers been on that price. Renewal rates by price and term. Reviewed all current acquisition pricing to create a benchmark. Basically, I was building a picture of the subscribers who I had only known for a few weeks.
  11. 11. Dovetail ReportingI didn’t do this alone. Worked closely with Account Management to identify the correct reports. “Automatic Payment Analysis” report was key. (Mass system) Dovetail had to ensure the correct number of contracts were included to pick up the correct subscribers to make sure they were not stepped up too soon. 1 year would be 1 contract for an annual subscriber, but 12 contracts for 4 issue subscriber.
  12. 12. Automatic Payment Analysis ReportCurrent Payments AnalysisClient: TOUT TIME OUT MAGAZINEPublication: TIM TIME OUT MAGAZINEUK subs onlyAll payment typesSubscribers who have renewed excluded Years on No issues 1 issues 2 issues 3 issues 4 issues 5 issues Pending Pending current Number remainin remainin remainin remainin remainin remaininPayment Type Zone Issues Price Issues Price price of Subs g g g g g gDirect debit UK 3 3.99 0 0 9 1 0 1 0 0 0Direct debit UK 4 3.13 0 0 5 1 0 0 0 1 0Direct debit UK 4 3.13 0 0 6 7 2 2 2 1 0Direct debit UK 4 5 0 0 2 1 1 0 0 0 0Direct debit UK 4 5 0 0 4 66 42 11 7 6 0Direct debit UK 4 5 0 0 5 173 74 19 45 34 0Direct debit UK 4 5.75 0 0 4 2 0 0 1 1 0Direct debit UK 4 5.75 0 0 5 2 0 1 0 1 0Direct debit UK 4 5.75 0 0 6 28 7 6 9 6 0Direct debit UK 4 5.75 0 0 7 24 5 12 4 3 0Direct debit UK 4 5.75 0 0 8 175 1 45 43 47 39 0Direct debit UK 4 5.75 0 0 9 53 16 11 11 15 0Direct debit UK 4 5.99 0 0 1 1 0 0 0 1 0Direct debit UK 4 5.99 0 0 4 2 0 1 1 0 0Direct debit UK 4 5.99 0 0 5 38 7 11 13 7 0Direct debit UK 4 5.99 0 0 6 205 62 38 57 48 0Direct debit UK 4 5.99 0 0 7 54 24 12 9 9 0Direct debit UK 4 6 0 0 1 2 0 1 1 0 0Direct debit UK 4 6 0 0 2 1 0 1 0 0 0
  13. 13. Automatic Payment Analysis Report Years onPayment Type Zone Issues Price Pending Pending current Number Issues Price price of Subs • Key pointsDirect debit UK 3 3.99 0 0 9 1 • IssuesDirect debitDirect debit UK UK 4 4 3.13 3.13 0 0 0 0 5 6 1 7 • PriceDirect debit UK 4 5 0 0 2 1 • Years on Current PriceDirect debitDirect debit UK UK 4 4 5 5 0 0 0 0 4 5 66 173 • Number of subscribersDirect debit UK 4 5.75 0 0 4 2Direct debit UK 4 5.75 0 0 5 2Direct debit UK 4 5.75 0 0 6 28Direct debit UK 4 5.75 0 0 7 24Direct debit UK 4 5.75 0 0 8 175Direct debit UK 4 5.75 0 0 9 53Direct debit UK 4 5.99 0 0 1 1Direct debit UK 4 5.99 0 0 4 2Direct debit UK 4 5.99 0 0 5 38Direct debit UK 4 5.99 0 0 6 205Direct debit UK 4 5.99 0 0 7 54Direct debit UK 4 6 0 0 1 2
  14. 14. Automatic Payment Analysis Report – cont..Number of No issues 1 issues 2 issues 3 issues 4 issues 5 issues 6 issues 7 issuesSubs 1 remaining remaining remaining remaining remaining remaining remaining remaining 0 1 0 0 0 0 0 • Key points 3 1 0 1 1 0 0 0 • Issues remaining 31 4 12 6 9 0 0 0 721 175 179 186 180 1 0 0 137 27 34 34 42 0 0 0 12 1 2 5 4 0 0 0 9 2 3 2 2 0 0 0 379 110 94 104 71 0 0 0 2518 611 460 717 724 2 1 0 2253 564 685 527 474 1 0 1 771 240 235 153 143 0 0 0 74 22 15 17 20 0 0 0 190 31 68 45 44 2 0 0 440 120 112 95 113 0 0 0 1 0 1 0 0 0 0 0 1 0 0 0 1 0 0 0 1 1 0 0 0 0 0 0 33 5 2 8 13 5 0 0 334 95 39 56 68 45 31 0
  15. 15. Using the Automatic Payment report Group subscribers by issues to determine opportunity Looked for people who had been on the same price for more than 3 years. Determine the optimum price point for each term. Kept terms the same as the cycle renewal rates were good. Look at the universe to see how many people could be stepped up.
  16. 16. Looking at term 4 issues for £7.50 Years on Pending Pending current Number No issues 1 issues 2 issues 3 issues 4 issuesIssues Price Issues Price price of Subs remaining remaining remaining remaining remaining Of the 6634 subscribers, 6246 had 4 7 0 0 1 2 0 0 2 0 been subscribing for 3 4 7 0 0 2 1 0 1 0 0 years or more – 94%! 4 7 0 0 3 3 1 0 1 1 4 7 0 0 4 31 4 12 6 9 4 7 0 0 5 721 175 179 186 180 4 7 0 0 6 137 27 34 34 42 4 7.5 0 0 0 12 1 2 5 4 4 7.5 0 0 1 9 2 3 2 2 4 7.5 0 0 2 379 110 94 104 71 4 7.5 0 0 3 2518 611 460 717 724 4 7.5 0 0 4 2253 564 685 527 474 4 7.5 0 0 5 771 240 235 153 143 4 7.5 0 0 6 74 22 15 17 20 4 7.5 0 0 7 190 31 68 45 44 4 7.5 0 0 8 440 120 112 95 113
  17. 17. How I got started?2. Created “What if analysis?” What if… I increased the price by £0.45 and maintained renewal rate. I increased the price by £0.45 and renewal rate dropped by 2% or 5% or 10%. I increased the price by £1.00 and maintained renewal rate. I increased the price by £2.00 and maintained renewal rate.
  18. 18. Why do “What if’s”?To determine where the opportunities were toincrease the price.To calculate your risk.To know your breakeven point.To reassure the Publisher/Finance Director!
  19. 19. How I got started?3. Put a test in place The initial plan was to mail a 10% cross section of the file. The plan was to bring the very low prices more in line with the current acquisition pricing. The test contained Several price increases across different price points and terms. Some groups had an even higher price to see if it would adversely affect the renewal rate. First mailing would be just under 3,000 customers informing them of their price increase 4 weeks prior to their next Direct Debit payment being taken.
  20. 20. How I got started?4. Marketing communication plan tosubscribers The Direct Debit rules are you need to notify subscribers of any change to term or price. We did this in the form of a carrier sheet that was delivered with their copy.
  21. 21. The carrier sheetThe tone of the letter was very soft as it was from the editordiscussing what was in the current issue and what was comingsoon in future issues.The carrier sheets were personalised to the subscriberinforming them of their individual “price increase”. We were careful in the wording and didn’t actually mention the words “price increase” instead opting to say “your next scheduled payment will be….”Using the Automatic Payment Analysis report I created apricing matrix for Dovetail to follow. If the price is £XX.XX then move it to this price £YY.YY.With so many price points to start this was the best way!
  22. 22. Timing is key!Timing the carrier sheet was key.As Time Out is a weekly we had to select a week thathad enough subscribers to justify the costs of thepromotion. Needed to ensure we had a minimum of 1,000 subscribers to maintain postal discounts. Extra costs incurred in the production of the personalised letter.
  23. 23. Results to the test96% overall renewal rate to the higher price 4 issues subscribers renewed at 97% 12/13 issue subscribers renewed at 93% 51 issue subscribers renewed at 86%Additional overall Direct Debit revenue on the issue =£2,331Additional overall annual Direct Debit revenue fromthis group = £16,033!
  24. 24. Next Steps – Roll outDuring the initial group I had various price teststo see how far we could push the price – anadditional £0.45, £0.75 or £1.In most cases the higher prices yielded the samerenewal rate as the lower prices so for the nextmailings I rolled out with higher prices.Don’t forget Time Out is a weekly so an extra£0.45 on a monthly subscription works out to£5.40 per year!
  25. 25. Results to the next week97% overall renewal rate from the Direct Debit subscribers 4 issues subscribers renewed at 97% 12/13 issue subscribers renewed at 98% 25/26 issue subscribers renewed at 100% 51 issue subscribers renewed at 98%The issue delivered a revenue increase of £3,710.This group delivered an annual revenue increase of£20,243!
  26. 26. ….and the next week97% overall renewal rate from the Direct Debit subscriber 4 issues subscribers renewed at 98% 12/13 issue subscribers renewed at 99% 25/26 issue subscribers renewed at 100% 51 issue subscribers renewed at 93%The issue delivered a revenue increase of £3,220.33.This group delivered an annual revenue increase of£17,416.51!
  27. 27. ….and the final week97% overall renewal rate from the direct debit subscribers 4 issues subscribers renewed at 99% 12/13 issue subscribers renewed at 93% 25/26 issue subscribers renewed at 100% 51 issue subscribers renewed at 95%The issue delivered a revenue increase of £3,165.36This group delivered an annual revenue increase of£17,446.30!
  28. 28. Total ResultsIncreased the price for 13,358 subscribers.Generated an additional £12,400 in revenue to the 4 issuesthat were mailed which had an immediate impact on theincome for those issues.Generated an additional £71,138 in annual revenue.Subscriber revenue yields jumped £1.53 per copy to £1.62.Renewal rates were maintained across all groups.Remember this is one magazine with a subscriber base of30,000!
  29. 29. Next StepsTo capture as much of the balance of the file Used the same text as carrier sheet but Dovetail set up and mailed letters on a weekly basis. Had less opportunity to test for prices but rolled out with the main one. Results were the same – renewal rates were maintained as prices were increased. Had to keep on top of the analysis and reviewed parameters monthly to ensure costs didn’t outweigh benefits.
  30. 30. Things to rememberDo your own numbers.Ensure you factor in the additional costs to the promotion.Make sure the increase is worth it but don’t be tooaggressive.Make sure you pick your long term subscribers who will bethe most loyal.Having monthly and quarterly Direct Debits were key toTime Out’s revenue increase.Timing the communication is important Time Out was a weekly so could only do carriers on weeks that had the largest volume which was limiting.
  31. 31. Thank you for listening!Cheryl BrownSubscription SolutionsTel: 07808 182 701www.subscriptionsolutions.co.uk

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