How can I convince my friend his business is being lazy?
January 16, 2006 8:53 AM Subscribe
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?
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?
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
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
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
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
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
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
posted by winston at 5:53 PM on January 16, 2006
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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