Advance Renewal Offers Kill Brands

As a diehard direct marketer who worships at the feet of offers that get great response, this blog shows my branding side.

Sometimes, we must look beyond pure response and look at what happens to our customer database when we continually insult them. Over time, the fickle customers stay and the committed ones jump ship.

Pardon the pun, but that's no way to run a ship.

Denny Hatch represents the seasoned direct marketer who has studied this business as a practitioner for years. And I agree with the theme of his recent editorial in the September 2008 issue of Target Marketing Magazine. 

He named the article "Going to the Advance Renewal National Bank" and advises publishers to sell their subscriptions in advance rather than going to their bank to fund the business.

He describes his proven subscription model this way.

The usual sequence for renewal efforts is as follows: 1) renewal at birth -- add a renewal effort on the initial invoice suggesting that the new subscriber sign up for another year at some ridiculously low rate (which I can offer you because you will save me the cost of sending out a renewal and save yourself the nuisance of receiving unwanted mail).

So far so good. But I take exception to his tactics listed in point #2 that may get sufficient response to warrant continuation, but risk killing the brand.

2) send monthly renewals at expire (X) minus six months, X minus three months, X minus two months, X minus one month, X, X plus one month, X plus two months. You keep sending renewals until they are no longer profitable.

As a customer, my preference is to renew at one month prior to renewal. Or show me how I can save by subscribing for longer periods as an option. But please, after 8 renewal offers, I have no idea what your best deal is. And worse, I begin to ignore all such renewals until I quite getting the publication.

But please, ask me what my preference is and respect it. You do nothing but cheapen the subscription to the publication in question with an endless series of renewal offers that confuse me, reduce trust by stating that my renewal is running out soon even though I have six more months (and you intentionally attempt to hide this fact because you know it reduces response as mentioned in this article).

To be fair, Denny Hatch expresses his own frustration when he renewed a WSJ earlier than he intended. He says: "I would rather have this money for four months than give it to Uncle Rupee."

Nonetheless, Denny Hatch supports the basic renewal tactics as stated in numbers 1 and 2 above.

Do you agree that sometimes we have to look beyond response to see how the offers impact customer loyalty, customer referrals, reputation and long term growth? Do direct marketers typically respect the "brand" or understand the negative impacts they may have on long term sales by focusing solely on initial response rates?

Posted on September 2, 2008 and filed under Branding, Direct Response Creative.