The other day on the ASAE List Serv, Scott Oser shared some interesting experiences from his previous employment at National Geographic. He outlined the results of marketing tests this organization had done on moving new members through the first couple years of membership.
Here is what he reported.
“While I was at National Geographic, we looked at renewals many ways but one was as follows:
- New subscribers--any one who had been a subscriber for less than a complete year
- 2-3 year subscribers--anyone who had already renewed once but less = than 3 times
- Renew b-4s--anyone who had already renewed more than 3 times
We created those groups based on the renewal trends we saw when analyzing response rates. Our most worrisome group was obviously the new subscribers. Their renewal rate was traditionally the lowest because the publication was not yet part of their regular life. The second most at risk group was the 2-3 year subscribers and obviously the highest retention occurred within the last group.
As with most publishers we offered a pretty deep discount to get new subscribers in the door. Through testing we found that hitting these people with a full price offer in their first year as a subscriber significantly hurt renewal rates. We therefore developed a step up pricing schedule where depending on source we held the low price the same for the first renewal, increased it slightly for years 2 and 3 and then increased it even more for all of the renew b-4s. I realize it sounds kind of crazy, but we were charging our most loyal subscribers the highest price because we knew they would pay it.”
Do you have any comments or feedback on this strategy?