Trial Offers: Four Questions to Consider Before You Offer Them

Subscription trial offers are often the most debated and discussed topic at a subscription business. Opinions range from offering a free trial, a paid trial to no trial at all. The important thing to remember is, no matter how much experience you or anyone else has on your team, no one has the experience and data on current products and prospective customers to know the perfect answer. Typically, surveying customers on what your offer price and the package does not yield accurate results because survey respondents do not respond in a way that will accurately tell you with confidence if they will actually pay and what price.

The best you can do is start with a well-informed plan based on the questions outlined below – then test, test, and test some more, to confirm your assumptions and optimize your results.

I. Should You Offer a Free Trial?

II. Should You Require a Payment for a Free Trial?

III. How Much Should You Charge?

IV. How Long Should a Trial Be? 

I. Should You Offer a Free Trial?

The first question when you’re considering a trial offer is whether you should be offering a free trial in the first place. Even if you find the answer is “no,” that doesn’t mean you can’t still offer a trial. It just may have to be a paid trial of a small amount instead of a completely free trial. Consider these questions as well:

  1. Do you already offer lots of free content?

If you do, you probably shouldn’t give a free trial. For example, newspapers that offer free online content won’t want to offer a free trial if their content is already available for free online. A newspaper like the Guardian actually gathers subscription revenues through its iPad, iPhone, and mobile apps, proving that you can have subscription revenues even if you’re free online, but you shouldn’t be giving a free trial to those subscription apps.

2. Do a lot of people try to only use your information for a short period of time?

A good example of this is, which has a lot of reviews and product recommendations listed on their site, but they keep the actual scientific ratings behind the paywall. A site with this setup shouldn’t offer a free trial when they’re already giving so much away for free. The problem here is that trial participants will just sign up for the free trial and then cancel right after they obtained the information they wanted. It certainly isn’t conducive to getting a lot of paying subscribers.

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  1. What about offering free samples to compel people to convert from free to paid?

A good example of this is Testing Mom, which offers 100 questions in exchange for just an email address. By obtaining an email address, they can then market other offers and potentially upsell you into a paying subscriber. A best practice to remember is if you’re giving access to one singular piece of content, you shouldn’t also be giving away free access to your entire subscription site.

2. What about offering a “light” version of your subscription to get people hooked so they’re going to want to pay for full access over time?

A good example of this is the subscription site Fast Case, which has a free iPhone app and a couple of other mobile apps for the Android and for the iPad. Because of this, it doesn’t make sense to just offer free access to their site on top of everything. Visitors can get a “light” version of Fast Case’s content for free through the mobile applications, and if they’re really interested in the service, they’ll pay for full access through the site.

3. Is your content or service unusual enough that it’s hard to explain to a newbie?

In some cases, letting visitors experience your subscription could be an easy way to get people interested in your product. A really great example of this is A Story Before Bed. A Story Before Bed records a grandparent or a parent reading a children’s story out loud. The site allows visitors to record a story for free with 19 available titles to record. Then they market to those people who have recorded for free to get them to pay to record other titles.

4. Are you in a highly competitive marketplace and you’re not really dominant?

This may be the time to offer a free trial. A good example is MorningStar, which offers information and databases regarding stocks, bonds, and mutual funds. This is obviously a very competitive marketplace and MorningStar, while being somewhat well known, is not a dominant brand like Financial Times, Forbes, or even the Motley Fool. So they offer a two week free trial to their premium service.

5. Do you have a refer-a-friend program built into your trial offer?

If you do, you may want to offer a free trial because you’re obviously going to get more leads that way. A good example of this is Dropbox. When Dropbox sends an email to someone who signs up for their service, they have an offer to get extra space for free. The offer is actually a link to refer-a-friend. For every friend referred, you get more gigabytes of storage space on Dropbox. Your friend who accepts the offer is sent an email where they can also receive 250 megabytes of bonus space. This is a great way to generate leads, generate word of mouth, and draw more people into your free offer and then try to sell them into your paying subscription plan.

6. Are you in a highly budget-conscious market?

A good example of this is Education Week, which markets to school principals and people in the education sector who are deciding policy, a very budget-conscious market. They offer a 2-week free trial. They also have a lot of free newsletters they use to try and get paying subscribers.

7. Is your content or service so engaging and segmented into chapters that almost once people get started, they’re going to want to keep going?

A really great example of this is, where they offer Google analytics essential training. If you go to the table of contents for the Google analytics essential training, the blue lines of text are videos that anybody can view for free, whereas the gray lines of text require a subscription.

Obviously, if somebody wants to learn Google analytics, they’re going to want to watch a sample to make sure that the content is the type that they can understand and is worth their while. If they’re really invested in learning Google analytics and they find that those first few videos are really great, they’re obviously going to be hooked and are going to want to continue into a conversion so they can get the full breadth of content.

 II. Should You Require a Payment for a Free Trial?

A credit card number at sign-up should always be required to automate the process of charging for a subscription when the time arrives. It also psychologically conveys the idea that your content is worth money and they are signing up for something that will eventually be converted into a paid service.

Avoid charging a preauthorization hold, which is a minimal amount like a dollar or the monthly subscription amount, held until the end of the trial. Those sorts of charges are getting a lot of pushback from the credit card companies, so it’s advisable to wait until the end of the trial to actually charge somebody’s credit card.

One option is to implement a paid trial for just a dollar. When you implement a paid trial, you’re getting a much more qualified lead of somebody who’s willing to pay for your service. If somebody is willing to spend a dollar, it’s highly likely that they’re also going to spend more money on your site.

The exception to the “always get a credit card” rule is if your trial is a light version of your service. An example of this is Highrise. If you look at the very bottom, they have a free plan for 2 users and 250 contacts. They are offering a light version for free, which is effective because people who may not need more advanced services can first get accustomed to the site. Then as their career blossoms or as their business grows, they will probably upgrade. Another interesting move is how they bury the trial. There’s no big “Free Trial” button, which allows people to choose from their subscription plans first.

As for processing the first charge, it’s advisable wait until the end of the trial, or to give a little bit of a grace period. For instance, if someone signs up for a 10-day trial, wait until day 12 to charge their card, as they may cancel on day 10. The more chargebacks and refunds are minimized, the better. A grace period tends to minimize all the dreaded payment processing snafus.

Providing written confirmation of the charge either by mail or by email is a must. An email will usually suffice, and when the account is charged, make sure that your merchant account, or the account that’s listed on your customer’s credit card statement, is your site’s name and not that of your parent company (or educate that the parent company will be billing). This may require setting up separate merchant accounts for each of your sites, if you have different sites. Making it very clear to your trial members about what they’re getting will minimize chargebacks. An unfamiliar name on a credit card statement is a surefire way to have people start questioning those charges and possibly issue a chargeback.

III. How Much do You Charge?

It is advisable to just go as low as 99 cents, which seems to be working really well in the newspaper industry for metered paywalls. Testing is key along with measuring the conversions and the lifetime value by test group before beginning. If you have a rather expensive business-to-business (B2B) subscription plan, you could make the case that a $99 trial for 14 to 30 days might help with your customer base.

IV. How Long Should a Trial Be?

Many sites vary the amount of time they devote to a trial. Seven, 14, and 30-day trials are the most popular amongst B2B and B2C sites. 30 days is usually too long, and unfortunately, most subscription companies don’t test their trial length. Testing will really help to determine how long your trial should be. Here are some questions to ask to help you get to a starting trial length:

  • How long does it take someone to become fully engaged in the service, so much so that leaving your service would be painful for them because they’ve gotten so accustomed to it?
  • How long does your new user education process take? If you have an email series that offers first steps and then follow up emails to get new members on board, how long does that usually take?
  • How long does it take for them to forget that they got the service entirely?

A high amount of churn due to trial cancellations can be a sign of a trial period that is too long. Shortening the length of a trial will cut down on people who sign up for the trial, get access for free or for a dollar, and then leave.

As with any offer, you will need to test all of your assumptions. Many subscription businesses simply do not do enough testing in this area. One of the reasons is low traffic, which means it will take a long time to get enough data to be statistically relevant. And that’s with an understanding of the upfront conversion of your trial offers! You will need to track each test group through trial conversion to customer their first renewal anniversary and even long-term, understanding the full lifetime value of that customer!

Referrals: The Unsung Hero for Creating Subscription and Membership Growth

A primer on building a referral program, with a directory of 15 referral platforms.

Referrals are one of the most effective ways to generate new subscribers for your site at a very low cost, but not nearly as many subscription businesses use this tactic as they should.

What is a Referral Program?

When we talk about a referral program, we’re speaking of a specific program which could leverage software, an app or a marketing campaign to get your existing members to recommend your site, service, box subscription or publication to their friends, their peers, their family members.

Recommending tools, services and content is something people do all the time. But for your business to be effective at getting your visitors, members or subscribers to recommend you, you need to make it very, very easy for them to recommend your product or your service. The reason is, studies have shown that people really do tend to listen to their peers or their family members when it comes to purchasing decisions.

“What You Should Know About B2B Referrals (But Probably Don’t)” by Influitive and Heinz

The customers that you get through referrals also tend to be much higher quality. We have found that referred subscribers can have up to a sixty percent higher lifetime value than subscribers you get through other paid media channels. That’s a significant improvement. You might not see sixty percent in your specific business, but study after study have shown that they do generate higher quality subscribers.

Referrals are also a very, very cost-effective channel. Referred subscribers cost one-fifth to one-tenth what you might pay for a subscriber generated through paid media on a cost per acquisition basis. When setting your goal for your referral program, try to generate up to fifteen percent of your monthly new members, a good small but steady contribution month after month at a very low cost per acquisition. This allows you to use your budget more effectively for some of your other subscriber or member acquisition channels, like paid search, email marketing, or advertising.

Types of referral programs

Here is our list of how you can generate referrals with five specific types of programs. We chose these because they’re applicable to both B2B and B2C, though some work a little better for one or the other, which we’ll explain as we go into them.

Referral Program #1: New Subscriber Referrals

The first program is something we like to call “referral at birth”. That’s where you present a new subscriber with an option to refer this service to their friends right at the moment of sign up. Essentially, when somebody joins your subscription or membership, you build in this type of “tell-a-friend” or “recommend us to a peer” pitch right into the sign-up process.

When designing referral at birth programs, focus on your new member onboarding process to include the promotion.

You should also think of other key points in your subscriber lifestyle where you might be able to insert a referral program. This could be if somebody comes back and makes an additional purchase from you in addition to their subscription during the checkout process, you might insert some kind of referral program. Also, think about renewal. If a subscriber is renewing, they’re probably happy with the service, they might want to recommend it to a friend or a peer in the B2B space.

It’s very important if you’re considering referral at birth, test this against other offers you might make during that process. We’ve seen a lot of marketers like to use their thank you pages after a new registration to offer some co-registration deals or maybe some upsell offers. If you’re using something else on your thank you page, definitely test which is going to be more beneficial for your site in the long run, whether to generate referrals or to generate co-registration revenue or a direct sale.

Referral Program #2: Direct Referrals

Another program is a direct referral request. These are special promotions that are designed specifically to get your member base to recommend your service to their friends, their family members, their peers.

The idea is that you want to make it something that your subscriber would want to share. Why would they want to share this? It makes them look like they’re offering a special deal to their friends. They get to feel like they’re a part of something. It’s also important to create a deadline to create a sense of urgency. That way you can also measure the effectiveness better rather than having an ongoing program month after month after month.

We recommend you try and send your referral request in multiple channels because some people respond to email, some people respond to direct mail and others, social media. Also, you might consider building something into your customer service scripts where you can have if somebody’s on the phone with a customer service agent where they present an offer with some kind of benefit for their family members, business colleagues or their friends if they were to make a referral.

Referral Program #3: Reward Program

You could consider implementing a very specific reward program.

We sometimes get questions about what the difference is between a direct referral program and a reward program. It’s an astute question! The difference between a direct referral and a reward program is that a direct referral program benefits the referred subscriber, the reward program benefits the referrer.

You want to give your existing members a bonus every time they refer someone. These should be an ongoing program, not a special promotion. This is something that lives on your site, it’s always there, members know about it, and then any time they refer someone, they’re going to get their benefit.

Your program could be a cash benefit, credits to their account, an extension of their subscription or membership term, or additional services that you might offer.

If you’re going to use cash or credit for your reward program, it’s important to figure out how much can you offer. You’ve got to look at the lifetime value of a subscriber, look at the other cost-per-acquisition and figure out how much can I really afford to spend on these referrals in order to make it profitable.

Don’t just think that cash is the only kind of reward to offer. In fact, non-cash rewards can be really effective when executed in the right way.

You don’t even have to send anything. You don’t have to send a product, you don’t have to send cash, you don’t have to give them credits, you can also just simply recognize your subscribers. This can work really well because sometimes that’s all people really want is to feel engaged with your site, and feel appreciated. If you make it very easy for your customers to refer your site to other people, then also make it very easy for you to recognize them publicly in some way.

Referral Program #4: eCards

Another program you can consider are eCards, and I’m sure everyone listening to this has received or seen an eCard. These are essentially just online greeting cards. Sometimes there’s an animation, sometimes some sound, but basically, it’s things that people can customize and send to their friends or their peers.

In addition to making it personalized from the existing subscriber and letting them personalize it to their recipients, you also want to try and tie in some way that when the person receives it, they’re brought back to your site. You could also include a special offer for new subscribers with these eCards so that the people who get it see that it came from their friend who’s a subscriber at your site, but now they’re offering you a special offer, or you could include a direct signup form. Make it engaging, and then also make it so that it can take another action and become a member of your site.

You can make these as simple or as complex as you want. The key here is that the more personalized you make it, the more your customer is likely to share it.

25 Essential Subscription Conversion Tactics

Subscription marketing is a world unto-itself, and understanding the details, no matter how small, can make a huge difference in conversation rates and the lifetime value of your subscribers.  The following are 25 tactics we have learned from years of testing for maximizing conversion rates on your subscription trial offers:

The Offer

1. Email Collection: Ask trial participants for an email address at the very beginning of the registration process, before they click any button. Email collection should come before a name or a credit card number is entered, which should be done on step two of the registration process.

2. Form Design: After you obtain an email address, keep your form to one column and put as much of it above the fold as possible. Visitors shouldn’t have to scroll and jump between both columns. Keep it really simple and as brief as possible.

3. Button Design: Create a button with drop shading, a three-dimensional look and a contrasting color from the site design. It should stick out and your eyes should be drawn towards it. It’s also important to have a positive Call-To-Action button copy that gets people engaged, like “Get Started,” “Get Instant Access Now” or “Join Now,” avoiding words with a negative connotation, like “Submit.”

4. Artificial Deadline: Imposing an artificial deadline on your trial offer (or promotional offer) compels visitors to register sooner rather than later.   You May Be Interested In:

5. Testimonials: Testimonial quotes from customers on the registration page are another great tactic to increase trial signups. Another way to foster credibility is to include member logos whenever possible. However, be mindful to make the logos grayscale, because the last thing you want is a bunch of colorful logos that take away from your own site and clash with one another. Include social sharing as well. For instance, Facebook provides a plugin that allows a visitor to see how many people and how many of their friends “like” your business’ page.

6. Lightbox Overlays:Use a lightbox overlay that pops up after a visitor has been on your page for a certain amount of time. The amount of time can be determined by checking your analytics to see how long visitors are on your site.

Offer Terms and Conditions

When it comes to terms and conditions, there are four standards to be used by a business, especially one operating online to display transparency, demonstrate legitimacy and convey trust with your future subscribers.  A good trick to remember is the four P’s:  Prominence, Presentation, Placement, and Proximity.

7. Prominence: Your terms and conditions should be large enough, clear and easy to read, and above the fold. All disclosures should be written in a way that consumers can understand.

8. Presentation: Your terms and conditions should not be hidden behind a hyperlink. Your privacy policy can be, but you want to make your terms and conditions spelled out in plain text and directly above the registration button.

9. Placement: Avoid distracting animation or advertising or anything that would take away from visitors spending the time to read your terms and conditions.

10. Proximity: It’s optimal to have the copy for your terms of use and service above the registration button.


11. Honor Promises: If a person signs up for a trial, they must get access for the period of time that was promised. If a ten day trial is promised with instant access and a password is needed, email the password immediately. You can’t email it to them two days later and then charge them on day 10 because they really only had 8 days of access to your site.

12. Make it Clear: Trial participants need to know exactly what they are signing up for. A terms of service notice must be present before they click, where they explicitly agree to a free trial that will convert to a monthly or yearly subscription unless cancelled.

13. Language Usage: The language used in offering a discount as part of a paid trial is quite important as well. For instance, word an offer this way:  “Get our service for 30 days for $1. That’s 90% off a regular price!” It needs to be clear that you are offering a percentage discount and that normal charges will apply after the trial period. In the case of a $1 trial, it may not even make the most sense to indicate a 90% discount. Instead, say: “Get access to our service for 14 days for $1. After that period of time you will be charged a monthly rate of X.” Be sure to also clearly disclose your refund policy.

14. Disclose Total Cost: In the same vein, it is imperative to disclose the total cost of your subscription. If for any reason your service has an installation fee, tax, or any sort of variable fee, it all needs to be disclosed. If you’re going to be sending the billing information to a third party, using a payment processing server like Chase Payment Tech or a merchant account, this must all be disclosed as well.

15. Cancellations: Include the details of the cancellation process and make it very easy to cancel on your site. Though it is true that most subscription owners don’t want trial participants to cancel after they sign up for a trial offer, in the end a cancellation is much better for your business than a customer issuing a chargeback.

Conversion Tactics

16. Email Communications: Use the email addresses you obtained at registration for your marketing purposes. Set your email service provider to send auto responders with a thank you note the minute they sign up for the free trial, along some first steps to access your best resources, features or tools on your site.

Email communications with trial subscribers should be sent between 9AM and 3PM with the following recommended frequency for a seven-to-ten day trial:

  • At sign-up
  • Three days into the trial
  • Six days into the trial
  • 24 hours before the trial is over

The email send 24 hours before the trial is over should contain a reminder that the trial membership is about to expire and their card is going to be charged.

As always, test which email tactics work for you. Sending an email reminder can be a very powerful tactic to improve conversions, but may not work every time. If people sign up for a trial and then cancel, create a separate email list for them,  you can still send marketing emails in the hopes of winning them back.

If emails don’t help to convert your trial subscribers into paying subscribers, you may need to revisit your marketing copy, or consider a different free offer such as an e-book, webinar, or white paper.

17.Form Abandons:Of course, because you offer a trial or an incredible promotion doesn’t mean everybody’s going to take it. Sometimes you’re going to have form abandons, where people submit an email but don’t fill out the rest of your form. Most businesses have a form abandon rate of above 20%. Having a form abandon rate lower than 20% is phenomenal.

Tracking form abandons is important to gain an insight into how visitors are interacting with your registration process. There are two types to track: Initial and Final form abandons. 

“Initial” abandons are those who abandon the cart or the sign up page at some point in the process, but return to complete it within 30-60 days. “Final” abandons are those who give up on the process altogether and never come back. Most sites can usually save up to 20% of their abandons with email communications, among other methods. When sending an email to abandons, always remind the subscriber of what they are going to be missing.

Another way to use email to save form abandons is to opt for a two-part trial form. The first part of the form is an email opt-in, and the second part of the form asks for credit card information. While it is always recommended to take credit card information at the point of the trial offer, the downside is it will immediately lead to form abandons. Splitting up the registration process ensures that even if a visitor abandons at the credit card stage, you’ll still have an email for marketing purposes.

The shopping cart is not the only place you want to attempt to save form abandons. It can also be done during the post-trial cancellation. First, try to extend the trail at the first cancellation attempt, or accept the cancellation and cross-sell another product. Even if you can’t get the subscription renewal, attempt to increase your revenues by selling one-off products.

18. Debit & Prepaid CardsStay away from debit card pre-authorizations on free trials because some banks will place a hold on the funds until the payment is settled, leading to angry calls from trial participants who will want to cancel and get out completely. If your payment processor or the banks that are connected to your payment processor are placing holds, there are two ways to deal with the situation. The first is to get someone at your processor or the banks to release them. The other option is to convert everyone to a $1.00 trial. In this case, it will save you from the hassle of pre-authorizations and you will still have credit card information on file. 

When it comes to prepaid cards, proceed with caution and try to upsell them as soon as possible. It’s very difficult to renew an account that was paid for with a prepaid card. When the renewal time arrives, there’s a real risk that the card may not have enough money on it. If you are able to determine when somebody is using a prepaid card, send them a one-time upsell offer. It can be an annual membership or a lifetime membership – it just needs to be something where you can get the most out of that card.

Services like Vindicia, Recurly and others can tell you not only it’s a prepaid card, but also how much money is on that card, so you can then make an offer that’s tailored to that amount. It’s important to not just ignore prepaid cards and assume that most of your users won’t use them.

Upselling Tactics

When it comes to upselling people into annual subscriptions or other offers, there are a few ways to make the offer much more effective:

19. Weekly vs. Annual: Change the wording to reflect the weekly price instead of the annual price. If an annual subscription costs $199, wording the offer so that it reflects the weekly price of $3.85 will help with conversions. 

20. Discounted Yearly Offer: Make a one-time discounted annual plan offer to customers who chose a monthly subscription plan.

21. Targeted MarketingTry targeted marketing and don’t be afraid of telemarketing. Look at your analytics and either call or email the most loyal subscribers or the most frequent users of your site.

22. Combine Sales and Trials: When a product is purchased on the eCommerce portion of your site, make an offer to begin a trial during the checkout process. Charge the credit card that’s used to make the product purchase once the trial is over. However, you can’t do this if you have one company handling your products and another handling your subscriptions. You’ll need one company with the same merchant account to do this, otherwise it will be considered a “data pass” and will run you afoul of the Federal Trade Commission.

23. Combine Trials with EventsOffer attendees to your events a key or coupon code to obtain access to your site. Then create a series of special welcome emails to remind people that they entered into this trial subscription because they attended the event, and that after their trial is over, you will be charging the same card they used to pay for the event ticket. Always remember in a situation like this to make an equal offer to your current subscribers. If your current subscribers are attending the event, give them a discount on the event ticket or extend their subscription by a comparable term to the trial offer. Retaining customers is always easier than finding new ones.    

24. Don’t Over-extend Guarantees: If you offer 100% money-back guarantee, it doesn’t matter how long the person subscribes with you, or how far away it was from the point of purchase, you have to give that money back. Always stick to a limited term, like a 30-day money-back guarantee. Also, stay away from offering risk-free guarantees. Risk-free means a lot more than just giving the money back, it also means you would have to refund any taxes or shipping and handling and other costs if the subscriber cancels. It’s better to say exactly what you’re willing to give back as part of the guarantee, rather than saying that your trial is risk-free in any way.

Rinse and Repeat

25. TEST, TEST and TEST:  Successful subscription conversations are about constant testing and tweaking.  Do not, we repeat … DO NOT … EVER … Fall into the “we tested that before and it failed” trap.  Always retest, you would be surprised what has changed!  Always challenge your assumptions, always retest, always be testing. 

How to Get Your (Successful) Subscription Marketing Campaign Out the Door

Market smart and profitability, with our step-by-step directions.

Are you launching a marketing campaign to support an existing or new subscription business, membership, or product? You don’t need a big marketing budget to get started, but you need to market smart.

This Subscription Marketing guide outlines in detail 12 steps every subscription marketer needs to take to get a marketing program off the ground and drive profitable revenue, even with a small budget or little experience.

Market smart and profitability, with these detailed step-by-step directions.

  • Step #1: Define Your Prospects
  • Step #2: Understand Your Prospect’s Use of Words
  • Step #3: Research Your Buyers (Cheaply)
  • Step #4: Define Your Benefits
  • Step #5: Get Testimonials
  • Step #6: Optimize Your Sales Site
  • Step #7: Promotion Research
  • Step #8: Get Your Affiliates and Referral Partners Set Up!
  • Step #9: Set Up and Plan Your Promotion Calendar
  • Step #10: Getting Promotions out the Door, Think Like an Agency
  • Step # 11: Creating Your Promotional Offer
  • Step #12: Do Your Modeling
  • Summary

Step #1: Define Your Prospects

Who is your business selling your subscription or membership to?

When asked, subscription executives define their perfect prospect; they tend to start naming all sorts of different demographics, vice presidents of this, analysts of that, managers of the other thing, this industry, that industry, Wall Street, boys, girls, men, women, everybody. If your answer to this question is “everyone,” your marketing can’t be focused or effective.

The thing is, you can only do great marketing when you are focused on a very defined target. What you need to succeed in your subscription marketing is a target demographic. Think of your target demographic like the old game Pac-Man, where you have one sizeable primary target customer profile, a/k/a/ demographic, and perhaps some smaller secondary ones. If you already have an operating subscription business, go and look at your genuine buyers, and you find they tend to clump into a couple of big clumps.

When looking for target demographics, these are some of the attributes that you’re going to try to understand:

  • Why are your current customers buying? Why would prospects buy?
  • What’s their motivation? (That’s a significant thing for you to know as a marketer before you do anything.)
  • Which traffic sources convert best already?
  • Can you find enough great traffic sources to market to?
  • Are they early adopters? Are they going for new things? Do they like cutting-edge things, or are they more somebody who would prefer to get it because everybody they already know gets it?
  • Are they bargain hunters? Are they going to go for some discount? Do they want savings? Do they want the cheapest on the market, or do they want the best? Think about it. You could buy a Mercedes and a Kia, and they both are the same thing, but it’s a very different demographic that they both appeal to differently.

Understand as many things as you can about your target demographic’s wants, needs, desires, problems, everything. Knowing these will provide an excellent foundation as you work through your marketing.

Step #2: Understand Your Prospect’s Use of Words

Understanding how your target customer uses words is one of the most important things you need to know about as a marketer to a new marketplace.

The words are not how you use words; your sales team uses words, your marketing, content marketing, or editorial team words. Don’t just go to Google and look up heavy keyword traffic either, because you don’t know who the people are on Google using those keywords. Use the words your prospects and customers use. These are the words you may use for keyword targeting, copy, even the taxonomy in your product, service, app, or site.

Your target customer? They tend to describe themselves in a certain way. Do they say I’m a housewife, or do they say I’m a homemaker? How do they portray themselves? Then, what are the keywords that they will use to find your site? If you can, go to your own (or competitor’s sites) and find out what kind of keywords are being used. If you already have a blog or some free content that’s available, look up the search logs and understand the words people tend to use when looking for information.

Different words will have an incredibly diverse impact, even when describing the same thing. As an example: look at the terms B2B, b-to-b marketing, of course, business-to-business marketing. All three of those are, one would think, interchangeable, but look at the difference in usage by the target market.

Know your words; they will significantly affect how your prospects react to your marketing campaigns.

Step #3: Research Your Buyers (Cheaply)

Now it’s time to understand, really understand, in detail your target customers. Take the time to see them as real people, with real issues, who you know inside and out versus an abstract concept called a demographic. Here are some of the best places to find out more about your potential buyers:

  1. Surveys. Conduct a survey. If you cannot survey your current buyers, go to a vendor or perhaps a free newsletter or something and offer to do a research study in conjunction with them. Maybe you could offer to be the researcher that surveys your partner and learn from the data.
  2. Comments: Read comments by your target prospects and customers on your site, competitor sites, and other locations where why maybe. What are they talking about in discussion groups, and what are the words they were using there? What are they saying on forums and groups? What are they saying on their blogs? What are the comments they are writing on stories? I’d instead read their comments than read the top reporters who write for them. You can learn more from their words.
  3. Search Logs: Pull your logs and understand the search terms on your site or products. Access Google Webmaster and understand the search terms people are using driving search traffic to your site.
  4. Customer Service: If you already have an operating business, customer service will be golden for you. Your customer service person or team is on the front lines talking with customers. Talk with the team! Understand what they are hearing when people buy when people cancel, and when people have issues. You will learn a lot!
  5. In-Person Meetings: If there’s any way that you can meet your customers or target prospects in person, please do so. The key is, you can either meet them in person, say at a trade show or in their offices. Or you can call them up on the phone and talk to a few people. You can do usability tests. Whatever way you possibly can. It’s going to make such a difference to your marketing because you’re going to begin to understand them at a gut level that you didn’t before when they were an abstract mass. I cannot tell you the power of meeting a few people in person. Here’s the key. Make sure the people you meet in person or on the phone represent the demographic you’re marketing. You don’t want the squeakiest wheels. You want the people who do fit that target market pretty well.

Step #4: Define Your Benefits

After knowing your prospect and knowing them well, you should only map out positioning and benefits. First, ask yourself these two questions:

  1. What am I selling? I cannot talk about that from the perspective of the website. I have to talk about it from the perspective of the audience. That’s one of the biggest mistakes that most subscription businesses make. They think about what they made instead of about the people they expect to buy from them.
  2. What is the IMMEDIATE benefit when someone buys? One little secret. When people purchase a membership or a subscription online, no matter for what term, a term could be month to month. It could be quarterly. It could be annual. Those are all different terms that people might buy. No matter what period they buy for, the reason secretly why they’re buying is instant gratification. They’re buying because they want to get at something right now that seems like it’s more than worth what they’re being asked to ante up right now.

They do not think I will get whatever great tool, content, app, or other outstanding product feature or benefit you offer over the next twelve months. It isn’t that case, and it isn’t like a magazine subscription where you used to think, I’m going to get this lovely magazine for the rest of the year. That psychology isn’t there with online (mobile) subscriptions and memberships. It is much more of an immediate impact purchase.

When you’re writing your copy and thinking about your positioning, it better be something that you get immediately or darned soon. I’m going to lose five pounds in the next two weeks. Not over the year, I’m going to have a better-looking body. It’s got to be pretty soon. Now, that doesn’t mean that after they come on board as members, you’re not going to continue to keep them on board and keep them satisfied in different ways, but they need to feel excited about what they’re getting right now.

Now, taking your answers to these two questions, it’s time to build your case for buying your subscription or membership. If you’ve done any research into copywriting, you already understand about features versus benefits. Features are the stuff on your website, the actual content, tools, service, or another part that makes your subscription or membership unique! The biggest mistake I see in the market, especially in business-to-business subscriptions, are companies selling with features.

Features are NOT benefits. Benefits are the answer to, “what do I get from using your service?” from the demographic that’s buying it. This is incredibly important, and if you can look at what the person is getting out of the information, tool, service, or content they’re buying from you, that’s your benefit. Another tip? Once you have your benefits all put together, go out and talk (again!) to your customers and see what they think! You will learn a ton, and more than likely, you will want to tweak your benefits and sales copy based on those learnings.

Step #5: Get Testimonials

Showing benefits versus telling what your benefits are to a prospective subscriber is way more powerful, and to do that, you need to get testimonials. While the concept of doing so may seem scary to you, focus on the result, testimonials are compelling and support conversions.

It’s tough to get good testimonials. If you send out a blank note or request saying, “please, write a testimonial for me,” people are going to write what they think, and the testimonials you receive will be pretty generic, like “I think this a great site.” That type of testimonial will not support your conversion!

What you want is a testimonial that ties into the benefit copy that you just created. Then you need a testimonial that backs that up, that says essential, “Yes! True, I experienced it!”

One of the secret ways to do that is when you send out that note saying, “could you tell me how this site was good for you?” guide them on what to say! For example, in your message, be specific with your question and ask, “how did my product, the name of the product, help you, with (and then put your benefit statement in there)?” E.g., How did it help you find a date? How did it help you get into a relationship? How did it help you save more money? How did it help you grow your career? How did it help you achieve profitability?

When customers see this type of question, they know the beginning to their answer; it’s incredible. They’ll start writing. A detailed set-up question prompts them to write the testimonial that fits your benefit. A detailed set-up question is guaranteed to get your better testimonials.

Step #6: Optimize Your Sales Site

You’ve gone out, you’ve researched the market, and you’ve researched what they’re going to be buying you for. You’re still not allowed to send out a marketing campaign.

Now you have to optimize your site. You never want to do an outward-facing promotion, except perhaps a tiny test, until you’ve fixed your site itself. Why is that? You don’t want to spend time, money, and effort getting the word out and having prospects come and see something that isn’t ready. That’s like sending them to a coming soon page or a page where they’re going to go, “Ugh, this is awful!!” and bounce right off. Why would you ever want to do that? Instead, fix your site so that it will convert as much of that traffic as possible.

Here’s where you look. Instead of working on your homepage, work backward. Work from the checkout back to the homepage. Why? You optimized your homepage, but the rest of the pages throughout the site still aren’t perfect. Wonderful. They come to the homepage, and they say, that doesn’t look bad, and then they get a little further, and then they say “Awful!” and bounce off. You just lost them.

Optimize the checkout, then optimize the order form page, then optimize your paywall. Work your way back out. If they get that far in, you’re going to have a good chance of converting them. Make that traffic work harder for you by focusing on conversion as you optimize each page:

  • Before you do ANYTHING, make sure you have set up Google Analytics, Google Webmaster, Google Tag Manager, Facebook tracking pixelsand Google Adwords conversion tracking (at a minimum)to your sales site. Some of these tools you add code that tracks your entire site and others also require special code on your key conversion pages. Get this set up at the start so you can understand your site and mobile app to track conversions as you optimize and test.
  • Now that you are ready, you are going to optimize for conversion. Show your prospects the benefit that will be immediately available as soon as they join. As you go through all your pages, initially work to make sure the benefit copy is clear on your key pages. As you build traffic, you can A/B or multivariate test to improve the conversion rate at each step of your subscription sales process.
  • Next, you also want to optimize for referrals or “tell a friend” and social sharing. By optimizing, I mean you’re going to try to put on public pages (and even some members-only pages) links that people can use to tell their friends about how wonderful your business or program is. At the moment they’re feeling the most excited about it, especially new members as they tend to get very excited, you want them to be able to tell everybody. The key is not to use an app that you set it and expect that to work. It’s probably not going to. It’s not optimized. You will need to test and really understand how which tools, placements and design support conversion for your business.
  • Last but not least, optimize your system and process for ‘staff tweaks’. What are staff tweaks? These are the constant and ever-changing tweaks to landing pages, conversion pages and copy around your sales site. Optimize your content management system so that next time you want to change things, let’s say your benefits change or your offer changes, or a new partner, that it’s easy for your marketing staff to get in there and make the change without getting in line for IT and development team resources. This can be a real problem. Make sure you think about this critical issue so you and your team you can optimize pages, create new landing pages, campaigns and whatever you need without being slowed down. There are lots of tools on the market now that can help with this!TheThe key thing is not to tie changes needed for your optimization efforts into your IT and Dev team. Get yourself prepped so that you’re ready to act when you need to and you’re not held up by IT and development resources (they will thank you for this too!).

Step #7: Promotion Research

Before turning on any campaigns, you need to research every single place in the outside world, online and offline, where your business possibly could ever advertise or promote itself that’s relevant to your demographic.

The media, or the place where you promote and place your campaign, is by far the most important factor for your success. Understand social media, blogs, and other places where your target customers hang out. You need to dig in and start getting to know this very early on. In fact, if you can’t find enough places and you’re considering a launch, I would urge you to reconsider your launch.

Here are the three key things you will need to research:

  1. Research Influencers: The first thing to do when starting any type of marketing is to go out and start files on everyone. Start files on every blogger, ever Twitterer, every group, every active commenter on sites relevant to your business, every journalist.
  2. Research potential marketing partners.   Now, research anyone who could ever possibly be a marketing partner, an affiliate, runs a mailing list, runs a media site, sells technology that also sells to your target customers, even people or companies with active public and private Facebook groups and LinkedIn groups. This includes: vendors; online and traditional magazines; apps; associations; competitors; consumer packaged good firms; anyone who’s got an opt-in list; a postal mail list; a telemarketing list; an active social media following, group or forum; basically, anyone who has a relationship with your target customer is a possible partner at some point.
  3. Research Influencer and Partner Followers:  When you have your list of potential marketing partners and influencers (which includes your competition!), track the companies and individuals who are linking to their sites, engaged in social media and other channels. These are either other potential influencers, partners and even … target customers.

Ways to Keep Track of Your Research

We have certainly used different ways to track this information over the years, the one thing we recommend against is paper! Use Google docs, start a private blog (password protected) or perhaps set up your CRM system so each list is set up as though it’s like a lead, which it is. It’s a marketing partner lead, a list lead and/or someone you want to develop a relationship when you ramp up your PR program. One of the reasons to use a CRM system is that over time you’re going to find more and more targets and you’re going to forget who you found or you’re going to forget what deal you did with them if it worked, who did you call, etc …?

There is no right or wrong approach, do what is right for you and your business. What IS important is to start keeping your leads and information about them it in ONE place so that it’s all documented. Even for incredibly niche subscription businesses, you’re going to end up with a much longer list than you expect, almost always.

A side note on buying outside lists: If you are considering an outside list, do not be impressed with the size of the list, look at the quality of the people or companies.

We have seen lists that had maybe ninety-seven people on them and ended up making thousands and thousands of dollars because they were the ninety-seven right people. We have seen lists with lists that were fifty thousand, sixty thousand, a hundred thousand people and have only received a few click-throughs and nothing else. Size isn’t relevant in terms of the response rate. Often smaller lists will often be much more powerful. It’s like the smaller lists are concentrated. Super concentrated and so super powerful. The only reason why very large consumer sites might not be going after the small lists, it’s just economies of scale. If you have to get out campaigns to thirty million people in the next two weeks you just can’t go after lists with ninety-seven people on them. You just don’t have time. The niche businesses have a much better ability to target a particular type of customer, and it makes you more powerful as a marketer.

List tip #1: When you’re looking at lists you never want a compiled list.

List tip #2: You want a buyer list. Do not worry about what they bought. If they bought something (via direct response, an app, or online), that is what really matters. Other questions such as topic and how recently did they buy or opt-in are important as well, but the key to list performance is if they have bought something prior.

List tip #3: If a list has done well for you, go back to your marketing partner and ask if you can market to just new names (and anybody else who’s new on their list) monthly. You can automate that for efficiency. It’s a wonderful campaign that’ll really work.

List tip #4: Here’s a secret that a lot of people don’t know. If you’re in business to business, some of the best lists are vendor lists. In certain marketplaces, we’ve tested associations, trade magazines, very large convention attendees, and then vendor-customer lists in a particular niche and the vendor lists almost always outperformed everybody else’s and really significantly. Why? We believe it’s because the vendors these days are working very hard to qualify them because they’re trying to make them into sales leads or they actually are paying customers. These are highly qualified names and they tend to perform extremely well.

Step #8: Get Your Affiliates and Referral Partners Set Up!

These days, affiliates can have a bad rap, primarily due to the low quality, spammy networks that used to be so popular. If you have a negative opinion on affiliates, take a step back and think about them differently.

Many subscription management platforms have the ability to track referrals and then pay referral fees. Even if you do not have that capability, you set up conversion and goal tracking in Google Analytics on special landing and conversion pages to do the same (though a bit more work). You do not have to leverage an affiliate platform to have an affiliate or referral program. TheThe key thing to remember is, if you have a potential partner, you want to set up a program to reward them when they refer customers to you.

How you set up your program is really up to you, but the most common way is to pay a percentage of your first term of sale. We prefer that type of payment so there are no ongoing payments for subsequent terms. Once they are in the door, it’s our job to onboard and retain them. Depending on what your product costs, whether its monthly or annual, the volume of sales, your LTV and desirability of your partners’ customers will impact the % you offer. Some companies offer 15% of the first term regardless, some will offer up to 100% of that first term.

Source: Bigstock


Step #9: Set Up and Plan Your Promotion Calendar

Next, set up a timing strategy and calendar for your promotions.

We recommend you “calendar” at least the next three months, if not the next twelve months. Now, you WILL change stuff as you go through time, but you need to put a stake in the ground. You need to strategically set out and understand how you are spending your time and resources. Otherwise, you end up getting caught up in the campaign of the moment and losing track of stuff that really needs to get done, and not marketing as effectively as you can.

  • Ongoing Campaigns: First of all, calendar the ongoing stuff. Most people don’t think to calendar this. Most people don’t think, “I need to stick pay-per-click on my calendar” or “I need to stick updating my blog on my calendar” or tweeting or a link building campaign or double-checking that the email autoresponders still match benefit copy this week.Yet, these activities are things you absolutely have to calendar because if you don’t, either you’re going to forget to do it because a) you’re going to be too busy putting out fires with the big campaigns or b) it’s going to suck up all your time and then you’ll never get around to doing the big campaigns. We’ve seen people fall into either one camp or other or go back and forth between them both.
  • What works best, is to put time in your schedule. We tend to do the ongoing “to-dos” Friday afternoons. These are the campaigns that tend to assure you a steady low level of sales year long. They’re important sales. You need to continuously be doing it.
  • Big Campaigns: Next, pick times when you’re going to be doing a big campaign. You can’t run big campaigns all year long and you also don’t want to do one big campaign a year. Instead, you want to take the money that you have to spend (and your energy and your time) focused on at least four big campaigns a year. In fact, think about four big brand-building campaigns a year AND four big “buy now”, special offer, campaigns.These are very different types of campaigns. If possible, schedule the branding building campaigns a little bit before the buy now campaigns. The more you can get yourself known in the marketplace, it will soften that ground and warm up prospects Then when you come in with your harder offer, people are going to be like, I’ve heard of them. I’ll take that!
  • No matter how wonderful your offer is, your prospect is going to bounce if they do not know you. So, when you time your branding and “buy now” offer campaigns, this is what we call the secret branding conversion bump. With branding and market recognition in place for your business, a little bit of promotional work goes a long way. It is a lot easier to get a good response rate from a campaign if they’ve heard of you, you will get a better conversion rate all around. It’s worth investing in a little branding.

Understanding the connection between promotions and your sales funnel.

In the old days, a lot of people thought of the sales flow as a funnel and a step-by-step process. Today, the sales funnel starts a lot higher up and it’s very fluid.

When marketing your subscription business, your job is to make sure your prospects have not only heard of you, they have a pretty good opinion of you and your product as well. There are ways to achieve this, through free “stuff”, a trial offer, or perhaps a free email newsletter. Maybe it’s a great blog. Whatever that is, when they’re ready to buy, they will.

Your campaigns need to create awareness and your programs engagement, so they “self-serve” and bounce their way through the awareness, consideration, trial, buy process and sales funnel and jump on offers when you promote them.

  • TOO LITTLE: If you are not doing any outward branding campaigns, your funnel gets skinnier. The volume of prospects is low. You (or your team) are essentially just focused on doing a direct sale with minimal support.
  • TOO MUCH: You can also promote TOO much as well! Coca-Cola actually has a rule that when they’re rolling one of their campaigns, they try to reach the typical consumer at least eight times in a week. If they reach you nine times that ninth time is actually pretty much wasted. They’ve found that that’s not going to move the needle in terms of sales, but they need to pound you up to eight times just to get you to remember the message and then go and buy the Coke. That’s why people have frequency caps. They say I want the eight but I don’t want the ninth. The problem is, if you keep on pounding the same list over and over again with the same offer, you’re going to get list exhaustion as well. You’ve got to be careful with this. Again, this is why you’re going to schedule throughout the calendar year, test and evolve based on your learnings.

Timing of your campaigns

You’re going to build your campaigns into a big crescendo. Use deadlines in offers to create an urgency of a deadline at the end of that campaign. Then you start the next crescendo, the next big campaign.

A lot of times, your best case for campaign length will be two to three weeks. You should try to get eight touches in during that one period of time. You don’t want to touch this prospect eight times over the course of a year. You want to touch them in a much shorter time period because then she’s going to remember it.

Tip: Don’t hit your list and targets with the exact same ad all the time. Can you imagine if you got eight of the exact same broadcast email offers in one week or even three weeks? You’d be like, go away! Instead, there’s a lot of evidence that shows that you can go across media. The nice thing is your prospects are probably in many different media. They’re not only using email. They’re on websites. They are using social media. They are reading articles in online, social media, they’re listening to the radio. They’re all over the place during the course of those three weeks, so target your campaign accordingly.

Remember, you are the conductor!

Your prospects are in many places and you can reach them across many places but the key is, orchestrate it to create maximum impact!

Let’s say you have some really great affiliates and referral partners. You will want to orchestrate their efforts so they’re all going to, in the same week or two periods, promote your same offer. Then, you will pull back across all of these partners and stop the campaign. Most of your prospects will be on duplicate lists, so they’ll begin to remember it and act. Orchestrating is like combo a branding slash offer campaign.

Try to get all your different promotions for a given campaign going at the same time and then you can back off and let it ride for a little while. Then you go back on and start your next big campaign. It’s very effective.

Source: Bigstock

Step #10: Think Like an Agency

Let’s get those promotions created, out the door and live!

When you are doing so, don’t fall into the “today” or “this week” trap. I have seen too many subscription teams use a calendar as their to-do list for a given day or week. They go to the calendar, see they need to promote on a given date, and then come up with an offer, write creative, and go to production.

That is not the only way! Consider a marketing agency, they turn out high-quality, high-impact, and high-converting campaigns consistently and at a high rate. What do they do differently? They look at the entire calendar (e.g., not just next week’s email campaigns) and essentially, batch their work with a blueprint called a creative brief.

Creating an agency-like blueprint

Instead of looking at the calendar as a to-do list to get done, an agency views all the various promotions across email, social media and other channels as one campaign with many different tactics. The marketing agency orchestrates the elements of a campaign with one single creative brief.

In that creative brief, there will be copy points, key factoids that everyone’s going to reference, key search terms, and essentially everything that a team will need to execute the 1- to 3-week campaign.

A creative brief is usually one to two pages, but its everything you need to know about the campaign’s offer, about the demographic, about the benefit, the official benefit statement, official promotional price, and deadlines. That creative brief can now be used as the tactical blueprint to efficiently execute all the creative copy, emails, and design.

Many small teams forego using a creative brief because they are well, small, and they feel its extra work. I strongly recommend against that thinking. Even a one-person shop needs a creative brief, with everything documented in one place, you can:

  • Go back and reference thinking and strategy if things change.
  • Cut and paste all the key creative elements as you need them again, and again, and again.
  • Keep yourself honest if you are keeping with the deadlines and goals of your campaign.

The creative brief can typically take a ½ day or full day to get right. Once you have that, you now have the blueprint and executing is incredibly easy and incredibly quick and frankly, the intern can do it. It’s not tough. The only thing that is tough is orchestrating the media buys and partners. You should orchestrate them early on. In fact, you might start contacting them before beginning working on the actual ads for your campaign creative.

When launching a campaign, I recommend you hold a private webinar for your top partners and affiliates. Talk through the campaign, launch timing, creative and help them understand what’s in it for them (their revenue cut) and make them feel great about your business providing them the tools they need to be as successful as possible. Get them excited. Get their feedback and then they all roll it out together.

That’s how you execute agency style.

Step # 11: Creating Your Promotional Offer

Now let’s talk about what you actually would be offering in your promotional campaigns, you have basically three different types of offers you can present:

  1. LEAD GENERATION: This is something that is very big now and it really does make a difference. This is one of those ways that you can get that name, get the opt-in, get the registration and then be able to and convert them in a fairly short time period.What you’re looking for is for someone to opt-in, then convert them into trying or purchasing. Generally, when you generate leads, you need to them try to convert them to a paying subscriber in about 30 days. After 30 days, the people who are most likely to convert will have done do.
  2. TRIALS: There are many different types of trials you can offer, but my biggest recommendation is to always, ALWAYS get a credit card and charge something for it. You’re going to need to test and optimize and find out what works best for your prospects. (It could even be a $1 trial!)The period of time can differ although, I tend to recommend a shorter period of time than a longer.
  3. During the trial, your job is to convince your prospect they should continue and pay to be a paid customer. Tactics include email drip campaigns, sending a postcard, or even calling them. You could do all sorts of different things. What is critical, though, you have to ask for a credit card with the trial. Really. Unless you’re doing site licensing. Everybody else, you need to ask for a credit card with the trial. If they won’t give you a credit card, they weren’t a good prospect in the first place.
  4. PREMIUMS: You may want to offer a premium. A premium is a gift with paid order. Don’t assume that if you’re offering something that it is going to improve your lead generation rate or trial offer take rate. Test it.

Whenever possible, with your subscriptions, try to point out to people what benefit they’re going to get, immediately, the minute that they subscribe. If they feel like they’re going to get something right away, the minute they pay to subscribe, it’s like bam, right there, again, instant gratification. Really push that through.

A word about deadlines;

You always want a deadline on your promotional offers if you possibly can. Never make the deadline the first of the month. That’s because even if it’s the thirty-first I really don’t believe the first is coming for maybe another week yet. Psychologically, you never see that first coming until it shows up and suddenly it’s the second. You want your deadline on the fifteenth, the thirtieth, and the thirty-first will work. Any of those dates will work, but the first or second really do not work.

Step #12: Do Your Modeling

Pay attention, even if you didn’t like math in school or don’t have a math background, pay heed to this: Subscription marketing is ALL about math.

It’s imperative to model the performance of your subscription marketing campaigns.

1         First, estimate your lifetime value.

The lifetime value of a subscriber or member is the amount of revenue you receive while they are subscribed. For example, if you offer a monthly subscription and your price is $20.00 and your typical member sticks around for 5 months, then your lifetime value (LTV) is $100. If you offer an annual subscription for $1,000 and your typical customer sticks around for 5 years, then your LTV is $5,000.

If you do not currently sell subscriptions, you will want to underestimate.

If you’re a current subscription business but you haven’t done a lot of heavy marketing maybe in the last six months or in the last year, underestimate. You want to underestimate your lifetime value because the people who are on your file now are probably your biggest fans. They’re the hardcore people and their lifetime value is going to be really different than the lifetime value of maybe your average typical newbie from a big marketing campaign. Underestimate, keep yourself safe.

Do add in the average cross-sales and up-sales. Those are other things that you’re selling people once they come in as a subscriber. Maybe you’re selling them an event ticket, an ebook or coaching. Maybe you’re selling ads against their page views or renting out your list. There may be other ways that you’re making money from that subscriber. Make sure that’s all estimated in there.

When we say lifetime, we really do mean the life of the account (but still underestimate). You’re going to take that number and set it to one side.

2         Next, calculate your estimated cost-per-acquisition.

Your cost-per-acquisition needs to track a new subscriber going through all the different tactics that you typically would be using. You need to track offers, leads, trials, and conversion rates by promotional channel. You also need to track any commission on the sale, cost for the promotion (e.g. cost-per-click) and other activity. Maybe you’re paying a consultant a one-time fee.

Please bear in mind internal team time suck. Social media, marketing partnerships, and barters can suck up a huge amount of time and you are not tracking it. It’s your internal fee. You want to reflect that in your budget because otherwise, you will not fully understand the cost if you want to ramp up a program. (Then you’re going to be crushed with work.)

You also want to include card processing costs. In other words, what does your merchant account cost you to process each order? That could be a large part of your cost, especially for high-volume low-cost subscriptions and memberships.

To do all this math, I recommend you go to the site and download our Subscription Financial Model. It’s a comprehensive excel spreadsheet, while very detailed, is pretty easy to fill out. Download the workbook and instructions, take a look at it. It will help you. It has ten different kinds of marketing campaigns and it helps you figure out the math on all of them, immediately showing you a campaign cost or cost per acquisition for each one of them.

You’ll be shocked when you look at it because the amount it costs you to get a new subscriber from each one of the different types of marketing. Each is so different. You won’t realize it until you do the calculations. You’ll finally understand where to put more effort. It really changes what you decide to do with your time.

3         Finally, understand acquisition budget per subscriber. 

Now that you know your lifetime value as well as the cost per acquisition, averaged across all campaigns and (at a minimum) your most expensive and your least expensive campaigns, you can do some math to determine the maximum amount you want to spend acquiring that customer.

The more you invest in marketing in general, the more you make over time. The trick here is to spend smart. You MAY want to spend 100% of your LTV or you may want to spend only a portion of it, and there are valid reasons for both options. Your president or CFO should be making this decision with the marketing department. The marketing team should not be making his decision in a void.

You, your marketing team, your company should clearly understand that you can spend a certain $, the first term revenue, or % or sale for each new customer acquisition.

TIP: For markets or product lines that are declining, cut off every possible expense and just milk it. Let it run. The few faithful that are left, the ones that will pay and pay, you will at least make profits from them and you won’t waste any more money. You have to really know your marketplace to make that decision.


Successful subscription marketing is constant learning and adjusting based on analytics and testing.

Look at every single source where you’ve got members in the past year (month or quarter) and understand actual results. How much did you make and what did it cost? What was that lifetime value of the people you got from that campaign and from what source? Map all this detail against your original estimates to understand, not only how well you did against those estimates, but to learn how to model your business better moving forward.

There will be radical differences between your estimates and reality. You’ll always be surprised. There’s ALWAYS going to be a surprise. One campaign will have done way better than you thought, and one of them will have stank and you never would’ve seen it coming. You will get smarter and smarter about what works for your target customer and your business, and you can use whatever you learned to improve your marketing investment the next time around. Over time, you get better and better and your marketing machine will ramp up to support your profitable subscription business.

Affordable Travel Club

Affordable travel Club: Making travel economical

When we think of a travel club, we think about rewards for bigwigs that travel regularly for their jobs. We often tell ourselves that the travel club is not for normal people or the average Joes, which is far from the truth. In fact, anyone can earn free travel benefits, even if you travel once or twice a year.

How travel clubs reduce expenses making it affordable?

Affordable travel clubs can help budget-conscious travelers to redeem rewards for discounted or free travel. Typically, traditional standalone reward programs are irrelevant to passive travelers. Affordable travel clubs, on the other hand, cater to all types of travelers and increase the relevance of the program. By integrating multiple platforms such as flights, hotels, car rentals, etc., businesses can offer targeted rewards and promotions relevant to their club members.

Affordable Travel Club
Affordable Travel Club

These travel clubs come in all shapes and sizes to enable their members to get exclusive discounts on travel products and services, incentivize frequent or loyal members with free perks, earn outstanding rewards and redemption rates. The members can also redeem for additional benefits and valuable incentives such as airport lounge facility, priority boarding, waived baggage fees, complimentary class upgrades, and more without paying out of the pocket purchase.

How does this affordable travel club work?

Start with identifying the goals for introducing affordable travel club to the potential customers. The prospective members will feel appreciated with affordable benefits on top of exceptional customer service throughout every stage of their interaction. Sign-in bonuses and lucrative welcome rewards can further help members to afford free or discounted travel right after enrolling. The members can get access to exclusive rewards and offers by paying a minimal membership fee, often on a yearly basis.

Examples of affordable travel club

Expedia Rewards, Marriott Rewards, Starwood Preferred Guest, United Airlines MileagePlus, Delta SkyMiles, etc. are some of the biggest reward programs that offer affordable travel (flight + hotel) benefits. However, these are best suited for frequent flyers or corporate travelers. Custom Travel Solutions is an affordable travel club membership program that caters well to both beginner travel hackers and seasoned pros.

How affordable travel club works?
How affordable travel club works?

Custom Travel Solutions has a diverse network of airline and hotel partners that are available to book at wholesale prices. With over 1.8M hotel networks and over 200 low-cost flight carriers, Custom Travel Solutions offer curated travel services with high-touch customer service to score cost savings for big spenders and not-so-big spenders.

FAQ’s for the affordable travel club

What is the best travel club for less-frequent travelers?

An affordable travel club is best to earn and redeem rewards for beginners or less-frequent travelers as it allows you to make most of the discounts and member-only rewards by paying a minimal membership fee. It is key to find a low-fee, high-value “bang for your buck” club if you are looking for deals for the occasional trip.

How can travel rewards be used for discounted travel?

Travel rewards can be redeemed against free travel upgrades such as complimentary hotel rooms, flight upgrades, access to the airport lounge, and discounted travel services such as car rentals and more. Referrals are also another great travel club rewards feature. Referral rewards are a great way to introduce a travel club to untapped markets of members who are looking for a solution.

Does the network size of a travel club make it affordable?

The network size and diversity of a travel club is a crucial element that makes it more affordable and appealing to the customers. The bigger the network, the greater the options for redeeming rewards.  Think about it, you want a travel club that is well connected in the industry and can provide worldwide savings, at places you trust. Assurance is a key with travel club members.

Who is the ideal user of an affordable travel club?

The ideal users are the ones who fulfill one or more of the following criteria-

  • who travel occasionally
  • have flexible travel dates
  • Destinations are flexible
  • Prefer saving over a preferred airline or hotel
  • Creature of comforts with no fixed preferences

How to evaluate an affordable travel club membership program?

The best way to evaluate an affordable travel club is by understanding the rewards and potential savings it offers to create a smooth travel experience along the way. Consider what you want to redeem your rewards to select the best fit that matches your needs and lifestyle. Consider the access you are receiving with the membership, and value it presents to other public travel sites.


This industry brief introduces the “travel club” concept and how membership-based organizations – such as employee groups, alumni clubs and credit unions – can use travel clubs to bring in more revenue from membership fees and strengthen loyalty among their members. By harnessing the inspirational and aspirational nature of elite travel and lifestyle benefits within a customizable, intuitive online platform, travel clubs can… • Help members take once-in-a-lifetime trips at discount prices
  • Streamline the logistics of travel, such as obtaining visas or medication
  • Keep customers/members actively engaged in the organization
  • Add value to other ancillary channels such as loyalty programs
  • Attract new customers/members through the appeal of elite travel and lifestyle benefits
Online Travel Agency

Online travel agency-The Complete Guide


In the current digital era with an abundance of choices and overwhelming options, the role of an Online Travel Agency (OTA) and travel club have become increasingly important within the travel and hospitality industry. Back in 2015, OTAs accounted for about 60% of online bookings of independent properties and hotel chains combined.

Currently, OTA travel controls nearly 2/3rd of all online hotel bookings. Let us delve into how they play a crucial role in increased hotel bookings and how to implement them correctly.

Table of Content:

  1. What is an Online travel agency?
  2. How Do Online Travel Agency (OTAs) work?
  3. How Online Travel Agency (OTA) help to increase revenue?
  4. How do OTAs make money?
  5. Why do travelers use OTAs?
  6. What to consider when choosing an Online Travel Agency (OTA)?
  7. Tips To Increase Your Bookings Through Online Travel Agents

What is an Online travel agency?

Online Travel Agency (OTAs) is a web-based travel company that lets customers research and instantly book travel products or services via an online platform. OTAs sell a range of travel-related services to other companies or travel providers, thus acting as third parties.

OTAs can provide access to customers at different locations and handle bookings in large volumes which is rather difficult to access through retailers’ marketing efforts alone.

Also read: Affordable Travel Club: Making Travel Economical

How Do Online Travel Agency (OTAs) work?

• OTAs are able to pull travel deals and booking options from all around the internet and provide the user with many options so they can choose what fits all of their needs. Find the right OTA partnership and optimize it to reach your target audience and generate revenue.

• Next, you can list hotels and properties of all sizes and showcase rooms through the product description, photographs, nearby points of interest, etc. Listings can be thoroughly searched using filters that narrow search such as Wi-fi, pool, spa, etc. and OTA will align travel criteria with the matching properties.

• OTAs provide real-time access to price, demand forecasting, current bookings, etc. to further help the travelers. The booking platform is secure and can be used as the main point of contact to make amendments or cancellations.

How Online Travel Agency (OTA) help to increase revenue?

Adding your hotel on OTAs can significantly improve hotel bookings and increase revenue. Here are a few reasons to have multiple OTAs connections for your hotel –

Increased traffic – One of the major benefits of OTA is that it drives traffic to the hotel’s main reservation website. OTAs act faster than the hotel website and redirect guests to research and book. According to Google, nearly 52% of customers visit the hotel’s main website and view the available rooms, etc. before the final booking.

Increased exposure = more bookings – Hotels can get more exposure by partnering up with OTAs. As your hotel gets more visibility, it leads to increased bookings, also known as, Billboard effect. Many guests prefer to book via an OTA before direct booking. According to a study around the online pre-purchase behavior of guests, about 75% made the reservation through an OTA website before booking directly with a major hotel brand.

Better OTA ranking and reviews – OTAs include reviews and rankings to individual hotels that allow customers to get a good idea about hotel services and eventually give a push for conversion. Increased conversion rate means more revenue for your business.

Target high-value customers – OTAs can target high-value customers through their listing tools and drive profitable growth for hotel brands. Marketing programs of OTAs can help achieve specific business goals and generate more revenue.

Access to analytics, insights, and tools – OTAs provide free access to competitive insights, marketing data, travelers’ preference and more to help your business with overall strategy and pricing. It allows you to compare your performance with your competitors and understand target markets that help to increase ROI.

How do OTAs make money?

Most online travel agencies make money through commissions from their clients for travel bookings and the travel provider they market on their digital platform. OTAs have multiple revenue streams, and the extent of their net profits depends on the type of services they offer – corporate, custom, leisure, and partnership marketing.

Here is a breakdown of the most common ways that OTAs make money.

Commissions: A massive chunk of income of OTAs is made via commissions per booking. The commission rate may range anywhere between 5% and 25% or may go up higher. Fees for serving clients: OTAs also make money through fees that they charge from their clients for a range of services such as travel planning, booking, creating a detailed itinerary, arranging necessary paperwork and transport, and more.

Specialized services or Consultancy: OTAs can earn big bucks by offering consultancy or technical assistance to their clients. Based on their expertise, they may book corporate or group travel services, offer dedicated travel guides during vacation, negotiate with local tour operators on clients’ behalf, and more.

Advertising and Premium listings: Many OTAs earn big bucks directly from travel vendors through advertising or by offering premium listing options on their web platform. An OTA may feature certain hotels and airlines as top results in client searches and then earn a pay-per-click basis.

Why do travelers use OTAs?

The new age travelers prefer booking via OTAs for several reasons. According to a report published in 2020, many travelers use OTAs for the quality of services, safety, and trust. Let us explore five main reasons that make OTAs the preferred option for bookings among travelers –

  • Convenience -The modern, savvy traveler relies on OTAs to easily access and a convenient booking process. OTAs are accessible on most devices – web browsers and mobile apps. It is a one-stop-shop for all travel products and services within a single platform, making the booking process easy and hassle-free.

Instead of physically booking hotels, airlines, or car rentals one by one, customers can book everything under one digital platform with easy payment options. Also, customers get booking details in real-time with instant confirmation.

  • Cost-effective -OTAs often provide their customers with exclusive booking offers such as sign-up bonuses, coupons, etc., that tempt customers into booking from them. Also, it is easy to compare different travel providers on OTAs and thoroughly research before finalizing the right option.
  • Range of services -OTAs offer travel products and services under one umbrella that leaves their customers spoilt for choice. Customers can search everything from hotels, vacation rentals, flights, car rentals, and adventure packages.

The ease of accessibility of online bookings facilitates customers to get detailed information on services or products they are booking. For instance, before making a hotel booking, customers can check the detailed description of services provided by the hotel along with images, reviews, level of service, etc. that helps in driving the purchase decision. Additionally, customers can search through a plethora of airlines to make a booking as per their budget and the quality of service provided by the airline. In the future, if they wish to make the same booking, it is easy to check the past booking option and refer to it without searching for it all over again.

Quality -Most travelers rely on OTAs for quality of service or product. OTAs are seen as experts in travel products they sell, and customers have a certain level of expectation from their products regarding quality, security, hygiene, and privacy.

Customers do not shy away from sharing their personal information and entrust OTAs for a high level of security and protection from spammers or breaches.

Reviews -Travelers often leave reviews after their booking, which lets other potential customers know about their experience and steer them into booking. Positive feedback or reviews play a vital role in travel buying.

What to consider when choosing an Online Travel Agency (OTA)?

Online Travel Agencies vary in offerings, size, type, and industry depending on their travel portfolios and niche interests. Here are the things to consider when choosing the right OTA for your business –

Your target audience and markets: The first and foremost thing to remember while choosing the most suitable OTA for your business is the regions, markets, or customer segments you wish to target. Some OTAs target specific niches or demographics, while others target a particular geographical location. If you want to cater to the corporate travel market, you should partner with an OTA targeting business or corporate clients.

Features of OTA: OTAs come fully equipped with several user-friendly features, including back-end management, inventory management, customer support, payment processing, subscription management, and more. While some OTAs offer a dedicated team to manage different aspects of your business, others provide various useful tools and analytics software to manage customer journeys throughout their entire life cycle. Choose an OTA that offers seamless and smooth integration of these tools, which eliminates the risk of mismanagement in the future.

User experience and accessibility for customers: Your business requires an OTA that offers a seamless experience to your target audience and is loaded with valuable features that interest them. Your customers should be able to browse and make bookings without any hassle easily.

Also, it is essential to check various features of OTAs – including their services, product offerings, and database of travel products. Make sure that their listed products fit best to your business model. If your potential customers look for a guest house or rental, there is no point considering an OTA of a big hotel chain.

Expertise: Look for OTAs that have experience and knowledge along with a solid market presence. Large OTAs usually have a good record of handling businesses and promoting them along the way. Working with a reputed OTA with access to rich tools will help make your entire business process faster and less problematic.

Tips To Increase Your Bookings Through Online Travel Agents

Once you have found the right OTA for your business, it is time to make the most of your time and effort to increase your revenue. Here are some solid, actionable tips to improve your bookings through OTAs –

Know your competition: The competition in today’s travel industry is extremely fierce, so it is essential to know your competition or business rivals before laying out a perfect business strategy. It will help you set clear objectives and well-defined goals to stand out from the rest. To launch your business, advertise your business vigorously on all digital channels using email marketing, social media campaigns, and more to reach a larger audience.

Pricing: Price is one of the most important criteria for customers to drive the purchase decision. Make sure that you employ the right pricing strategy at the right moment using forecasting methods. Use scarcity to your advantage. Offer limited-time discounts or coupons to engage urgency and coax customers into buying.

Reviews and ratings: Many prospective customers read guest reviews before making up their minds to buy from you. Make sure to highlight positive feedback and reviews while resolving the negative reviews to improve continually. It is vital to building a good rapport with your customers to establish yourself as a reliable and trustworthy brand.

Upsell and cross-sell: Customize travel packages with add-ons such as travel insurances, visa assistance, and other value-added services that lure your target audience into buying them in a way that also increases the order value. As per the TripAdvisor survey, Wi-Fi is the most desirable amenity for travelers, followed by free parking and breakfast.

Use OTAs promotional marketing: Take full advantage of OTAs by capitalizing on their promotional opportunities, such as running ad campaigns, travel loyalty programs and strategic placement on the search engine for greater exposure. This will help bring more visitors to your website and help generate good returns on your bookings.