Can continuous renewals work for U.S. magazines? They work for titles in Europe - and consultants say U.S. magazines can beat the obstacles here

Can continuous renewals work for U.S. magazines?

New York City--It sounds like a circulator's dream: a renewal system that pulls 70 percent to 80 percent and reduces renewal notices to a simple billing process. But the continuous renewal system, although used successfully throughout Europe, still meets resistance and obstacles in the United States, according to California-based circulation consultant Ted Wakefield, who spoke at Face to Face, The FOLIO: Show/Fall.

Publishers who use continuous renewals automatically renew subscriptions until subscribers say stop. Freed from sending renewal notices, publishers simply send subscribers bills or explanations of how payments will be made. Payment mechanisms can range from a simple check to direct electronic debit from a reader's bank or credit card account.

Although U.S. newspapers often send out bills without renewal notices, the practice has yet to be used successfully in most magazines, Wakefield notes.

The now-defunct Geo, for example, received a low response to its 1979 offer of a 25 percent discount to subscribers who agreed to automatic yearly billing. Similarly, Time's experiment with a combination renewal notice and bill was called "confusing" by the state attorney general of New York; Time discontinued it in 1985. More recently, Reader's Digest had inconclusive results from its continuous renewal test in the United States, even though the program is used successfully in all its international editions.

So far, the only proven success in North America has been with American Express Publishing Corp. Its titles--Travel & Leisure, Food & Wine, New York Woman and L.A. Style--are either on the system or are being converted to it.

"Travel & Leisure can use [continuous renewal] because it's owned by a credit card company," says Eliot De Y. Schein, president, Schein/Blattstein Advertising Inc. The magazine does not have to ask for a reader's credit card number, something many people are reluctant to give or unwilling to look up, adds John D. Klingel, executive publisher, Hippocrates, and owner of a consulting firm. Asking for the credit card number usually cuts response rates, he notes.

American Express also has a trustworthy name, contends Elizabeth Petrecca, circulation director, Travel & Leisure. "We try to make it easy for readers to cancel if they want to," she says. Readers can simply cross the charge off their American Express bills or call the 800 number listed on the table of contents, she explains. As a back-up, the magazine keeps all original orders on microfilm.

Making it work

Both Petrecca and Wakefield agree that the concept could work for other U.S. magazines, provided they meet certain conditions. Fulfillment software, for example, must be upgraded to send out automatic renewal notices and billing. Further, the offer to subscribers must strike a delicate balance between clarity and unobstrusiveness: If the deal is under-explained, readers may feel confused and eventually tricked, Wakefield says; if the deal is over-explained, "readers wonder what they're getting into and pulls go way down." In addition, the offer must be presented as a convenience to the reader, a way to avoid missed issues and a way to get the lowest price, he says.

A key to Reader's Digest's success abroad has been the use of "link" letters, says Wakefield. These are sent out six weeks before a subscription ends and remind readers to expect a charge on their next bank statement.

Few magazines offer special incentives to encourage readers to choose the continuous renewal option, he notes. An exception is England's The Listener, which offers four issues free for normal subscriptions, but eight if the reader selects a continuous, direct-debit payment option.

Continuous renewal could also work particularly well for U.S. business magazines, Wakefield says, noting that readers tend to subscribe for lengthy periods anyway and prefer not to miss issues.

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