E-mail Beginning to Trim Print Fulfillment Costs

By: Steve Outing Magazine and newspapers publishers face huge expenses in getting subscribers to renew. Those annoying letters that you as a subscriber get in the mail months in advance of a magazine subscription expiring, asking you to resubscribe for another year -- typically repeated until you do renew -- are not cheap. But perhaps there is a better (digital) way: e-mail renewals.

This week, subscription fulfillment giant Centrobe Inc. (part of EDS and formerly called Neodata) of Louisville, Colorado, announced a deal with Email Publishing Inc. to implement a system that will allow magazine subscribers to renew by e-mail. Centrobe handles fulfillment for more than 500 magazines, and soon it will begin using e-mail to encourage consumers who have e-mail addresses to renew their print subscriptions online. (Centrobe also allows magazine subscribers to report postal address changes online.)

We're at the very beginning of a change in how print publishers' fulfillment houses do business. But early results are encouraging enough that e-mail renewals could spread quickly. Email Publishing marketing director Dan Murray says that early results of groups of magazine subscribers sent e-mail renewal reminders have shown response rates of 8% to 18% -- which he estimates is two to four times the response rates of postal mail renewal reminders.

Centrobe Internet project manager Pat Gray says the potential is huge for cost savings and better renewal rates with e-mail renewals. "Everyone (in the fulfillment industry) is treating e-mail addresses like gold," he says, because e-mail renewals have several principal advantages:
Responses to e-mail renewal messages come in fast -- typically, 90% of the responses you get via e-mail come in the first two days, whereas direct mail renewals can stretch out over weeks. With such instant results, fulfillment systems can quickly turn around and do secondary mailings to those who haven't responded to the first renewal notice. For paid subscriptions, online renewals charged to a consumer's credit card bring in the money right away, vs. having to wait for the check to arrive in the postal mail. Cost savings are substantial. Gray says that a typical transmission cost for a traditional print renewal message can approach $1, vs. 10 cents for an e-mail renewal. Personalized messages

The way the Email Publishing technology, called WideMerge, works is that publishers' fulfillment operations send to Email Publishing "expire groups" of e-mail addresses -- batches of addresses whose subscriptions all expire at the same time. Personalized messages are sent to subscribers alerting them that their print subscriptions are about to expire, and suggesting that they renew online. The messages contain an individualized URL that the subscriber/e-mail recipient can "click through" to get to a form to resubscribe. (Some publishers also will use the system to send subscribers special offer notices and promotions about content. Subscribers can opt whether or not to accept such promotions and the system keeps track of which subscribers are willing to accept such e-mail.)

When the results are in -- typically after only a few days -- Email Publishing sends back the results to the fulfillment operation, which synchronizes its database with the latest e-mail renewal results so that renewed subscribers don't receive any more renewal notices. Those e-mail recipients who did not renew their subscriptions might be sent other e-mail renewal reminders later -- and if those fail then the fulfillment operation may resort to more expensive postal notices or phone reminders. Or after one unsuccessful e-mail message, the fulfillment house might return to conventional subscription renewal methods.

E-mail renewals tend to work better for some publishers than others. A publication with an audience for whom e-mail addresses are common makes the best candidate, of course. Magazines like Wired, PC Week, etc. probably will have the best luck with e-mail renewals.

Murray says that the system is ideal for controlled-circulation magazines that cover the technology industry, for example, since most of their subscribers will have e-mail addresses. It's especially advantageous in those instances where a publication sends out an annual subscriber demographic form to be filled out so that a subscriber continues to qualify to receive the publication. In the e-mail version of this process, the subscriber can renew by clicking through to a form and filling out the information online. The ideal system gives the subscriber a code number (passed within the URL contained in the message) and clicking through from the e-mail message to the form brings up the subscriber's information that was entered when the subscription began -- which the subscriber then updates and submits in order to continue the subscription for another year.

Murray points out that the controlled-circulation renewal forms are less daunting online than those received in postal mail, and online forms are far more likely to get filled out if they already contain last year's individual data. Controlled-circulation magazines lose a lot of subscribers who simply can't be bothered to fill out and mail back a long printed questionnaire.

Paid subscriptions work well, also, for those fulfillment operations that have transaction capabilities built in to their Web sites. Indeed, it's simpler for the consumer to renew by entering a credit card number online than to write out a check and put it in the postal mail box. While much of the discussion here has been about magazines, the process is just as appropriate for renewing paid newspaper subscriptions.

Ask for addresses

At this early stage, the biggest challenge is in getting subscriber e-mail addressses -- and getting them in accurate form. Increasingly, fulfillment operations like Centrobe are asking for e-mail addresses when subscribers initially sign up to receive a publication. Centrobe has been collecting e-mail addresses for a couple years.

Murray says that one of the most important things any publisher can do these days is start collecting print subscribers' e-mail addresses. Even if they don't expect to start using e-mail fulfillment in the near future, building up that information in the publication's subscriber database is prudent in order to be ready for the future when e-mail addresses will be needed. It's a simple matter to add a field in subscription cards and to the database. And if that process demonstrates that a good percentage of your subscribers do have e-mail addresses, that may indicate that you're ready to try e-mail renewals, says Murray.

Quality of e-mail addresses of print subscribers is a problem, however. Gloria Adams, circulation director for PennWell Advanced Technology Division, a technology trade journal publisher in New Hampshire that has experimented with e-mail renewals using Email Publishing's system, says that about half of the e-mail addresses in her database have been bad. That's partly because people change their addresses often, but moreso because the data entry process introduces lots of errors. Human typists at PennWell's fulfillment operation key in hand-written information from magazine subscription cards, but many of them are not used to seeing e-mail addresses, hence their accuracy rates fall when keying in e-mail addresses.

Centrobe's Gray says procedures are in place at his company to double-check e-mail addresses -- such as to make sure that they contain an "@" symbol and a period -- and he doubts that more than 20% of the addresses his company processes are bad.

Adams says that with the half dozen e-mail renewal experiments she's tried with her controlled-circulation magazines, the results have in some cases been "tremendous" with response rates as high as 25%. Unfortunately, on one recent test of e-mail renewals, the company's Web server went down just when the e-mail renewals had been delivered. E-mail recipients who tried to renew online couldn't get through. Adams had to send out a follow-up e-mail apologizing for the problem and asking print subscribers to try again to renew their subscriptions online.

New industry category

While still in its infancy, e-mail print fulfillment is likely to become a significant category in the publishing industry. Existing fulfillment operations are developing this capability in-house or partnering with e-mail companies like Email Publishing. Denver-based Infobeat, one of Email Publishing's principal competitors, is currently in discussions with several companies about providing similar e-mail subscription fulfillment services, according to an Infobeat spokesman.

Other fulfillment companies like JCI Data Processing, based in Cinnaminson, New Jersey, also have developed e-mail subscription renewal and Internet subscriber acquisition systems. JCI has been working on e-mail renewal campaigns with trade magazine publishers, mostly in the technology area where most subscribers have e-mail addresses, for the past two years, according to company president Linda Johnson. She says that for some publications with e-mail-savvy subscriber bases, the response to e-mail renewals has been very strong (though she declined to cite specific numbers).

Individual publishers' circulation departments increasingly will incorporate their own or third-party e-mail fulfillment systems into their existing fulfillment operations. Murray predicts that by later this year e-mail fulfillment will be commonly used by trade magazines, especially those with Internet-savvy audiences. More activity on the consumer side of the magazine business is likely to happen in 1999. The newspaper industry is likely to be slower to adopt the concept, though there's no reason why newspapers can't employ e-mail renewal procedures as a cost-saving measure.

(Full disclosure: Or rare occasions I end up writing about companies with whom I have had a business relationship, and this is one of those times. In the past, I have done some consulting work for two companies mentioned in this column, Email Publishing and Infobeat. The former also is currently a sponsor for the Online-News Internet discussion forum which I operate. I felt that the topic of this column was an important industry trend, and worthy of covering despite those relationships.)

Steve

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This column is written by Steve Outing exclusively for Editor & Publisher Interactive three days a week. News, tips, and other communications may be sent to Mr. Outing at:steve@planetarynews.com

The views expressed in the above column do not necessarily represent the views of the Editor & Publisher company