The ‘Continuity’ of Subscription Marketing — Wow, It’s Everywhere!

Somewhere down the line, I missed the memo that “continuity clubs” is now a yesterday term and that “subscription marketing” is preferred. While some of us may recall “12 CDs for $.01” or may even today have a favorite product-of-the-month subscription, it seems marketing has fallen in love with subscriptions.

Somewhere down the line, I missed the memo that “continuity clubs” is now a yesterday term and that “subscription marketing” is preferred. While some of us may recall “12 CDs for $.01” or may even today have a favorite product-of-the-month subscription, it seems marketing has fallen in love with subscriptions.

Such was the topic of a recent Direct Marketing Club of New York luncheon — where featured representatives from the entirety of the “subscription ecosystem” shared their perspectives: Barry Blumenfield, BMI Fulfillment; Jim Fosina, Amora Coffee & Amora Tea; Robert Manger, Sandvik Publishing; Pattie Mercier, Vantiv; Craig Mirabella, EverBright Media; George Saul, Fosina Marketing — and serving as moderator, Stephanie Miller, TopRight.

It is truly astounding so many products can be “moved” by subscriptions — nail polish (Julip), underwear (FreshPair), software (Adobe), music streaming (Spotify, Apple), men’s designer wear (Trunk Club for Men), women’s shoes (Shoe Dazzle), cosmetics and personal care (Birchbox), buyers’ clubs (Amazon Prime), and dates (match.com) — just a few of the examples offered up, in addition to coffee/tea (Amora), and educational learning (EverBright Media and Sandvik Publishing) that were represented on the panel.

While the channels and the product mix have expanded, some tried-and-true maxims from the days of “book and music clubs” have not been lost, according to the panelists. They include:

  1. It’s all about the bond with the customer — how you differentiate your product and service to justify a continuing relationship and greater lifetime value.
  2. This is a direct marketing business — pay attention to marketing ROI in every detail, even when business is great, there could be warning signs of waste and cost in specific areas of marketing spend.
  3. The entirety of the customer experience needs to be looked after — from product development , to advertising, to ordering, to service (extending from self-service to contact centers), to fulfillment.
  4. Pay particularly close attention to such areas as technology and fulfillment: surprise and delight requires such focus.

While channel expansion has brought to the marketplace new realities:

  1. Does your brand have a “thumb stopping” moment? With more and more mobile engagement, subscription marketers must make it easy to stop the consumer, make her pause, and consider the product/service offer in a mobile moment.
  2. There is a role for every channel — but each channel has its own metrics to pay attention to. While the panelists were proprietary with details, the lifetime value of a customer acquired via email, direct mail, DRTV, website or mobile most likely is distinct from each other — and may have different attrition rates. You’ll need to manage these distinctions in the marketing mix.
  3. A payment processing partner is important. In any given year, millions of credit cards expire — and this will be even more prevalent as chip-enabled cards flow into the marketplace.
  4. “Bill me” invoicing — once a mainstay in the business — has practically disappeared altogether over the last five years — as consumers in general appear to have become more casual about not paying.

To say the least, this business model has expanded far beyond books, magazines and music — and it makes me wonder: What’s next?

New EPA Data Shows Mail Recycling Humming Along

For paper recycling trend watchers, and direct mail advocates, something happened in the latest Municipal Solid Waste Characterization data just published last month (June 2015) by the U.S. Environmental Protection Agency. First, the actual report has been renamed “Advancing Sustainable Materials Management: Facts and Figures 2013.” Second, discarded advertising mail and catalogs now constitute just 1.6 percent of all MSW generated – down from 1.7 percent in 2012 and 2.3 percent at its peak in 2005 (before the Great Recession and 2006 postal rate hike).

Rarely, is discarded mail collected on its own for recycling – beyond post office lobbies and undeliverable mail collected by the U.S. Postal Service. This may be a direct result of single-stream paper and paperboard recycling in municipalities where office papers, newspapers, printed materials, magazines, catalogs, discarded mail, cartons, paper packaging and other mixed paper are more often than not collected in single bins (as they are in my hometown of New York City) by residential and commercial haulers.

While we may have lost some transparency into visibility of specific types of paper that are generated, recovered, converted to energy and landfilled – direct mail is no longer its own category for recovery, recycling and landfilling – we do see trends for paper and paperboard overall – and the results are encouraging.

First, a record 34.3 percent of all municipal solid waste (MSW) generated across all categories was captured for recovery in 2013. Disposal of generated waste in landfills decreased from 89 percent in 1980 to less than 53 percent in 2013 – and total MSW generated per capita stands at 4.4 pounds per person per day, about the same as it was in 1980, and down from its 2000 peak.

Not all recovered materials are recycled – some are composted and some are converted to energy. But all recovered materials are diverted from landfills.

For newspapers/mechanical papers (which include commercial printing papers such as direct mail and catalogs), the recovery rate reported in 2013 was 67 percent. In 2009, as much as 63.4 percent of discarded advertising mail and catalog had been recovered – but since 2010 recovery data for discarded mail has been rolled into the “newspaper/mechanical papers” category. For all paper and paperboard categories, 48.7 percent was recovered, and just 1.6 percent was landfilled. So we appear to be holding our own in recovery – and keeping fiber out of the dump.

As an aside, three categories of MSW did report growth in recovery in 2013: yard trimmings, consumer electronics and food – a direct reflection of the increase in composting (both residentially and at the municipal level), as well as manufacturer take-back programs and local electronics recycling collection efforts. The EPA report also states that the U.S. Postal Service is now instituting bulk mail recycling (lobbies and undeliverable bulk business mail) and that is helping to bolster recovery figures.

What’s our takeaway as marketers?

First, print marketers need to keep pushing consumers to recycle their mail, magazines and catalogs – after they’re done with them. The Direct Marketing Association “Recycle Please” and MPA | The Association of Magazine Media “Please Recycle” are two programs that encourage consumers to keep discarded papers out of the trash.

Second, just because you are digital, doesn’t get you off the hook for recycling. In fact, the EPA has consumer electronics recycling as a top priority – and smartphones, tablets, laptops, computers and other vehicles for digital advertising need to be recaptured. The DMA offers e-recycling data on its Recycle Please Web site as well.

So keep recycling America – read, respond and recycle that direct mail!

The Biggest Threat to Our Business … Hovering and Heinous

In the world of fiscal policy – if there’s a public or private behavior that has a disagreeable effect, then government has a tool to move behavior to a desired effect: taxation.

If the world has too much global warming, then tax fossil fuels and carbon emissions.

If smoking causes cancer, then tax cigarettes.

If alcoholic consumption brings on social ills, then tax wine and spirits.

If the world is becoming more unequal, and the middle class is under threat, then tax wealth.

But if the world has too much economic activity … why would that not be only a good thing?

In the United States (and probably elsewhere), the trouble with taxation — unfortunately, moral judgments aside — is that it is used too often for another objective: simply feeding the government leviathan. Failure to curb public spending, excessive entitlements and inefficiencies result in public debt and harrowing deficits – and a need for government to raise revenue anywhere it can.

But what if raising those taxes works against an overwhelming public good — that of economic growth that spurs even more government revenue? What if jobs, sales, manufacturing, services, the business of business, were all under threat by such a move?

Shouldn’t such a tax proposal be rejected on first consideration? How could such a proposal ever be offered in the first place?

Say hello to today’s U.S. Congress. Right now, in key House and Senate committees that consider taxation, budget and appropriations, is an idea that would be nothing short of ruinous to advertising and marketing: the removal or reduction of tax deductibility for advertising expenses, or the amortization of those expenses over a long period of time, far beyond advertising’s more immediate and practical impact.

Just more than a century ago, the federal government enacted an advertising expense tax deduction – rightly understanding that advertising activity spurs economic growth. That in turn creates jobs, sales, tax revenue, and other beneficial effects that lead to a virtuous circle of positive effects. I congratulate our policymakers … of 1913. That decision literally helped create a golden era for advertising – which helped produce the world’s most successful economy ever known.