Subscriber Acquisition Program

One year later….

Or: Why keeping all that data is so valuable

Circulation: Unified Strategy

Analysis Tools

Enhance Database

Demographics Geography Lifestyle/Lifestage PRIZM

Universe of Addresses

Targeted and Integrated Campaigns

Track Results

Track Results

Telephone Numbers email addresses

Focus: Understanding High Value

Quadrant View (Last year)

Quadrant View (This year)

Focused Retention

Box

Last Year

= Mature = Younger Years = Family Years

This year: With the Retention Box

Quadrants Last Year

Quadrants This Year

Blended Quadrants Next Year?

Segmentation Last Year Non-subscribers, Grouped by modeled groupings based on PRIZMne, sub-

grouped by Generations (Boomers +, Gen X/ Millennial)

< 40 < 40 40+ 40+

8

Segmentation This Year Non-subscribers, Grouped by modeled groupings based on PRIZMne, sub-grouped by

Generations, sub-grouped by ex-subscriber status, then by Last Stop Reason, then by

income and finally a few other attributes as we feel the need in an individual mailing...

< 40 < 40 40+ 40+

1 to 2 yr

< 1yr

2 to 3 yr

3 + yr

Never

1 to 2 yr

< 1yr

2 to 3 yr

3 + yr

Never

R1 R2 R1 R2 R1 R2 R1 R2

Call

/ M

ail

Gro

upin

gs

1800ish

Typically use

120 segments

with 3 creative

versions.

Execution last year

Execution This year

Execution this year

Our Standard Rotation

The Phoenix Segmentation Model

Your segmentation model

Baseline Good Starting Point

Start Slow

Work your way up

ZIP Code

Groupings Cloning High value

PRIZM’s

Form a plan (Last year) • Quick overview (circ acquisition) ---

– Where are my customers, where aren’t my

customers?

– Concentration of potentials?

• Crewing vs. Direct Mail vs. Sampling

– Test vs. Control group (simple A/B design)

– Versions of mail piece? (tuned to geography)

– Creative approval

– Timing of mail drop (holidays, events)

– Oops, forgot ?????

Form a plan (This year) • Quick overview (circ acquisition) ---

– High value customers

– Concentration of potentials?

– Versions the mail piece?

• (tuned to DEMO-graphy)

– Controlled Timing of mail drops (rotation)

– Special ultratargets (Boutique mailings)

– Retention and acquisition

– Backend analysis to guide future plans

One year later: A whole new world

• Issues solved: – Management of the rotation grid.

– Planning of the creative/production process.

– Postal expertise.

– Results measurements.

• Benefits: – “Personalized” messages.

– Lift in retention / drop in churn.

– Revenue per unit of circulation increase.

– Better understanding of customer value.

– Selective timings of mailings to Ex- and Never- Subs.

Ready to do it?

• Define a course and stick to it

• Mistakes will be made

• Don’t assume you can do it all

• Don’t assume you can’t do it all (done right, you can out ADVO ADVO)

• Sustainability!

Words of wisdom: Make this a more than a one person project.

Picking what was important?

• Ability to attract and ability to retain – Complex to simple and back to complex (once we learned)

• Extracted data from our circulation system

• PRIZM Clusters (PRIZMne at ZIP+6)

• Combined Clusters into groups with Lifestage/Social Groups

• Subscribers

• Ex-subscribers

• Never Subscribers

Focus On The High Value: _________

Where did we end up?

• Better understanding of how research and

testing work together.

• What to test (for less).

• How to get a statistically valid sample size.

• Better able to test price, lists, copy and timing.

• Key analysis measures.

• Retention rates and anticipated response rates

• Disasters to avoid (not that we had any ;-)).

View from the real world

(Examples of our lessons learned)

Getting to value

Started here

Added our subscriber model…

Quick hits…to full campaigns

Cluster 01

Very high

attraction/retention

index, very high

penetration. But is

the remaining pool

large enough to tap?

Tracking

Tracking starts in the campaign

Actually, it starts before

the campaign. It starts

with the target planning

meetings….

Tracking by Segment

Zoom…

Lifetime Value

Lifetime Value Model

• View 1 – Initial setup

Note: All rate, rate steps and

costs of delivery are illustrative

amounts.

Lifetime Value model

• View 2 – Status of starts through the

critical grace period

Note, at week 12, the starts

taken have already

generated a positive return

Yet, some orders are still

working off the initial costs..

Lifetime Value model

• View 2 – Status of starts through the

critical grace period

Look at the retention at this

point!

Profitability graph for “Crew” starts

Profitability graph for “Direct Mail” starts

Overall Breakeven Point

Payment Patterns

Payment Analysis

Should you even send a third bill?

Bills Sent Bills Paid

Payment Pattern Analysis

First Bills Sent

Second Bills Sent

Final Bills Sent

First Bills Paid

Second Bills Paid

Start of Subscriptions

Final Bills Paid

3rd notice does add value

But does it add enough?

For now… yes a third notice

Lift in “Green”

(payments that we

can not associate

with a bill), and

enough 3rd notices

come in.

Frequency of Delivery

Drift Analysis

Initial Analysis

7-Day production

dropped from 87%

sold to 67%

Initial Analysis

While Sunday and

Weekend orders went

WAY up

Average Rates holding

Decision time

• Options:

– Continue to sell lower FODs

– Stop Selling lower FODs

– Decided to keep offering the lower FODs but

with much lower focus

Result… 7-Day orders back up

And Average Rate still up…

Ultra Targeting

• Past Easy Pay upgrade efforts traditionally

yielded very few conversions.

• On May 17, 2007, we dropped 2,300 direct

mail pieces to ultra targeted segments

within our Loyalty Ladder.

• This was the first time we utilized the

Loyalty Ladder for a targeted retention

campaign.

Ultra Targeting

• Selection criteria:

– Silver step in our ladder(subs for at least 1-2 years)

and Bronze (subs for six months to one year)

– Shining Stars Boomers and NonBoomers R7 bill me,

excluded annuals.

– Selected zip codes:

• North

• NEV

• SEV

• West

Ultra Targeting

• The Offer:

• Used Claritas ConsumerPOINT to provide the store that this group was most likely to shop at: Nordstrom.

• We selected $15 domination gift cards (in the future we will test other increments, including no gift card).

• The rate was promoted as 'like receiving two weeks free, 20% off', i.e. $17.15 rate.

• All approved by ABC.

Ultra Targeting

• Creative:

– Boomer-Centric

creative.

• Results:

– 2.5% response

rate.

Ultra Targeting

• Next up:

– Repeating the boomer piece (1.7% response with 3

weeks remaining in campaign).

• (Note: Confirm your program with ABC).

– Hispanic based on language use and tenure in

market.

– Tenure based campaign into a highly competitive

section of town.

– Working women with children.

– New to market in “highly” competitive areas of town.

Looking for the silver bullet?

I’ve found a few:

Patience

Freedom to explore

Encouragement to explore

The right tools

The right people

Questions?

greg.bright@pni.com

602.444.8226