A while ago, I got a subscription offer from Inc. magazine that was so fresh, daring, and compelling I had to tell you about it!
Here's the story . . .
The outer envelope contained the intriguing teaser copy that read:
Pay-what-you-want subscription offer.
It's true!
Inside the #10 envelope was the order form that said (in part):
/x/ YES! Please send me my FREE issue of Inc. to preview.
I understand that after I have received my preview copy, you
will send me an invoice that I can return with the PAYMENT
AMOUNT THAT I DECIDE.
Talk about taking a risk and leaving the price up to the subscriber! I just had to find out more so I called Patrick Hainault at the publishers of Inc. who came up with the promotion.
Patrick told me that he got the idea from a Radiohead name-your-own-price offer that appeared on the band's website.
Would this approach work for the Inc. subscription mailing?
Let's crunch some numbers . . .
A subscription to Inc. (in the prospecting stage, not the renewal stage) was normally tested at prices from $5 to $12.
An economist would say that any truly rational being would only pay a penny for a subscription. But Patrick had higher hopes. He believed that most respondents would offer to pay something within the target $5 to $12 range . . . or more!
I asked Patrick how he thought this new promotion would actually do against his control. He explained that increased costs associated with the more complex fulfillment cycle might ultimately do the offer in, but he was unfazed.
Like all direct marketing pros, Patrick was committed to endlessly testing ideas in search of the Holy Grail . . . the new, more profitable control.
So how did the "pay-what-you-want" test do?
After the mailing dropped, I heard from Patrick with the results of the test. Here's what he had to say . . .
"Results aren't final but the "pay-what-you-want" package will likely garner less than 40% of the response we've received for the control against which it was measured.
It generally had the same look, but in the control, the subscription had a $5 price tag. I don't yet know what the average payment will amount to because we've given responders up to two free issues to determine the value of our magazine, but even when measured against a $10 offer, the format is likely to underperform.
My guess as to why it failed is that 1) people tend to freeze when given too many choices (and in a sense we gave them infinite price choices) and 2) we didn't put enough emphasis on establishing credibility for the offer."
So the punch line is, this very bold and creative "pay-what-you- want" offer bombed.
Does this bother Patrick? Not at all! As he put it:
"Any experienced direct mailer knows that you have to test, test, and test some more. Your control is your bread and butter but you have to keep trying new things if you want to get better results!"
And that is the whole point of this issue of The Levison Letter. If you're marketing with email, a web site, direct mail, or whatever, the name of the game is to keep testing and trying to "beat the control."
To maximize profits you have to constantly try to beat your best results and try to do even better.
And now, let me self-servingly offer my services.
Shoot me your control in any medium and I'll give you my honest feedback. No charge.
If I think I can't beat your control, I'll tell you straight.
If I think I can dramatically improve your profits I'll also tell you straight and we can discuss having me write a control-beater.
Can I always produce a winner? No. But I don't accept projects that I don't think I can have a big impact on so my batting average is frankly quite amazing.
I'm talking about winners like these . . .
Let's go to work!
And if you work in tech
check this out . . .
