How can I convince my friend his business is being lazy?

January 16, 2006 8:53 AM

What resources exist to illustrate that an online credit card subscription is a sound financial investment for a print magazine?

I've been trying to convince a friend of mine who works in the magazine industry that his company is at a severe disadvantage because they don't have a credit card subscription service on their website. They don't want to have one because they think it will cost too much.

The arguments I have in mind are

a) You'll increase subscriber base by x percent.
b) People are x percent more likely to subscribe if they can just do it on their credit card.
c) People are x percent more likely to resubscribe if they just have to reauthorize their credit card.
d) The monthly costs will only represent x percent of the revenue you can accrue through this method.

Would I be out of line in telling them to check their server logs to see how many people turn away from their subscription page already?

posted by jon_kill to computers & internet (7 comments total)

This is a little like asking "What resources exist to illustrate that a PayPal account is a sound investment for an auctioneer". It's so intuitive that I doubt there's much formalized research.

What you're describing is a rudimentary Cost-Benefit Analysis. There are many sites online that will guide you in putting together a basic analysis that is both mathematically and economically sound. You may also want to look into a simple ROI calculation.
posted by Jairus at 9:04 AM on January 16, 2006

The easiest way, IMO, would be to hunt down a couple online credit-card processors, and find out how much they charge. Some have a per-month charge, some do it on a per-transaction basis. If they were doing it on a per-transaction basis, presuming the transaction charge wasn't too expensive, I don't see how they could lose.
posted by antifuse at 9:17 AM on January 16, 2006

A few years back I was with a company that was setting up a webhosting business and we wanted to take subscriptions via credit card. We used authorized.net and I remember not being "in love" with them but overall was happy, I'd imagine nobody really loves their credit card gateway. From what I can recall, the costs broke down to something like: $200 a year, $15 a month, $0.25 each charge with some extra fees thrown on in there too. If you think you can make more than $400 a year off of offering the option to the customers it would seem to make sense. Personally, I've never subscribed to a magazine that didn't take credit cards.
posted by pwb503 at 10:38 AM on January 16, 2006

Sorry, wrong link. It wasn't authorized.net it was authorize.net.
posted by pwb503 at 10:39 AM on January 16, 2006

People are x percent more likely to subscribe if they can just do it on their credit card.

The easier it is to subscribe to a magazine, the more churn a magazine ends up having. A large percentage of the "whim" customers won't end up re-subscribing no matter how easy it is. Churn looks bad to advertisers. They like having more readers, but they also like having a stable readership demographic to advertise to.

The New Yorker went through a period where it was advertising on TV and selling ad space like crazy, and still losing money. I believe they've solved that since Tina Brown left, but it's a good lesson that more is not necessarily better.
posted by dhartung at 12:02 PM on January 16, 2006

Combining some of the advice above - what you might want is a break even analysis. Essentially, you want to say to your friend that all the company needs to get is X +Y new and reneewal subscriptions in the first year to break even, and that anything after that is adding to profits in the company.
posted by WestCoaster at 5:16 PM on January 16, 2006

Do they not accept credit cards at all or just not on the web site?
posted by winston at 5:53 PM on January 16, 2006