Topic: Generating Revenue With An Ezine - We Test 3 Different Approaches For Converting Free Subscribers To Paying Customers

Test Number: #060501-EZN

Word Count: 3500+

Focus: 8 Questions

1. Which offering will generate the highest yield: a premium subscription, a specialized ebook, or a tangible product line?
2. What conversion ratios can you expect to achieve when offering paid content to free subscribers?
3. Which of these two methods are best for packaging your premium content - a pay subscription or an ebook?
4. How much web site traffic can you expect to generate from the release of your ezine's latest issue?
5. How can you increase the number of readers who visit your website as a result of your ezine?
6. How can you sell more retail product with each issue of your ezine?
7. How can you minimize the impact of a premium subscription offering on your free subscriber's cancellation rate?
8. Which ebook compilation software did we find most effective?

060501-AWA - We study 600 awards sites to select and test the top performers.

Can you attract traffic by winning recognition? What does it take to win? How do you prepare your site? What is the easiest way to submit?

TEST SUMMARY

We created and tested three separate ways to attract revenue from a free subscriber base. We ran the tests over a period of 120 days.

TEST PRODUCT

(A) Tangible Products
(B) Premium Subscriptions
(C) Specialized eBooks

TEST COSTS

Product A's development costs included construction of an ecommerce store ($7500).

Products B's development costs included preparation of a 15,000 word report ($3500).

Product C was developed at the same time as product B, and so the additional cost was limited to reformatting ($1500).

How did a fledgling, niche web site, launch a content-rich ezine, and in just 6 short months accomplish the following?

• Grow traffic from 12,000 to 70,000 page views
• Increase retail sales by more than 600%
• Develop the largest portal in it's class (with more than 5500 events listed)

Here, in the midst of all the dot.com demise, is an Internet Cinderella story. The group launched their new ezine in cooperation with the Research Team at MarketingExperiments.Com, and the success of this venture has been well documented. (*1)

Marketing experts generally agree that one of the most powerful ways to attract web traffic is to develop an ezine. An ezine can provide a steady stream of rich content and thus a number of benefits:

• A higher ratio of page views, as visitors spend longer time at your site
• Improved search rankings, as your archives are more appealing to the "all knowing" spider/bot
• An ongoing dialog with customers and prospects, as they receive consistent communication from your site
• A powerful way to glean contact information from prospects, as they encounter a genuine incentive to leave their address
• The opportunity to repeat your offering, as you can continue to present it in subsequent mail-outs
• A mechanism for selling ancillary products, as you may (honestly) discuss their merits in your editorial
• The possibility of repackaging your content, as you offer it via subscriptions, ebooks, reports, CDs. etc.
• Increased traffic, as you experience a surge immediately following the delivery of each issue.

There are many benefits, but in the first part of this experiments, we determined to quantify just one...

What kind of traffic surge did we attract immediately following the delivery of our test ezine?

We measured the increase in traffic for two separate ezines. We compared only two days for each. That is the day before the release of a new issue, and the day of the new release. (*2)

ZINE 1 was a weekly publication. Here is a summary of our findings:

ZINE 2 was a twice-monthly publication. Here is a summary of our findings:

It is notable that ZINE 2 achieved a higher percentage of visits and page views than ZINE 1.

What made the difference?

We believe that there are at least 4 keys to maximizing the traffic surge generated by an ezine mail-out. We discuss these in Section 2 of this report.

But for now let's focus on another key question.

How effective was our test ezine at increasing retail sales in our online store?

For ZINE 1, we created a themed estore. We referenced it on the ezine's web site, and we placed one ad (middle position) in each issue of the ezine itself.

We were able to quantify the increase in orders immediately following our ezines mail-out.

Here is what we discovered:

The results are "strong", and we remain perplexed as to why publishers bemoan the lack of advertisers. After all, if the ad space in their ezine is truly effective, then why not use it to sell their own products?

The item featured in our test ezine sold 8.5 times more than any other item in our store.

How effective was our test ezine at converting free subscribers to pay subscribers?

In this digital conundrum where consumers have come to expect rich content for free, and dot.com moguls have raided the pockets of shareholders in the name of purchasing "eyeballs"... is it still possible for a keen marketer to monetize a free subscriber base?

For ZINE 2, we created a single "offer" page that was designed to convert free subscribers to pay subscribers. We referenced the link to this page in our free issue.

Here is what we discovered.

• 17% of the total subscriber base clicked through to the offer page.
• 3% of those who viewed the page made the purchase and upgraded their subscription.
• The annual value of these new subscribers was $298.20.

It is important to note that the number "17%" reflects the impact of only one mail-out. This same subscriber base will encounter the links to the offer page in each issue.

When the topic is more relevant, or when there is more time, many more of these free subscribers will "check out" the premium edition.

If 60% of the subscriber base eventually encounters the offer page, and if this ezine eventually wins 50,000 free subscribers, annual revenues could approach $268,000.

What's more, if we could increase the conversion ratio by 1.5% (to 4.5%) we could increase annual revenue to $447,000.

But how does the inclusion of an offer for paid content effect the cancellation rate of your free subscribers?

We'll tell you how to get the answer, in the PART 2 of this report.

How effective was our test ezine in selling specialized ebooks?

Which offering will generate the highest yield: a premium subscription, or a specialized ebook?

We took the same content offered in the premium subscription (tested previously) and repackaged it as an ebook.

So what impact did this change have on direct sales? We achieved an 8% conversion ratio. (*3)

That would seem to be a significant improvement, but the numbers are deceptive.

• The lifetime value of a customer for the ebook was $29.95.
• The lifetime value of the subscriber for the ezine was $298.20.

In actuality, the subscriptions sales were 4.27 times more profitable than the ebook.

So do we recommend a strategy based on premium subscriptions as opposed to ebooks? No. We recommend both. Each has it's own appeal, and each can be used to sell the other.

Section 2 (Continue...)

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