A recent MarketingSherpa case study is instructive for anyone selling a high-priced subscription or membership based product or service, and wishes to boost renewals.

MarketingSherpa profiled Corbis, a photo licensing agency, which was having difficulty handling the renewals of its content licenses.

The solution? To introduce a process for identifying licenses about to expire and allow sales representatives to target those account holders with about-to-expire licenses and persuade them to renew. Sounds simple… but Corbis had licenses covering 4 million online images with varying types of licenses as well as varying license periods. Around 7,000-10,000 image licenses were expiring each month. And at the time only about 2.5 percent of those licenses were being renewed.

Corbis developed a renewal program that used automated emails to remind clients that their licenses were about to expire, and gave a prioritized list of account holders to sales reps who could then contact the relevant members. While this is relatively easy to set up in most off-the-shelf membership scripts, it’s not so easy when you’re a large company and need to modify existing technological infrastructure.

Essentially, the steps which Corbis took - and which YOU can model, especially if you’re running an expensive membership program - are as follows:

1. Automate the sending of reminder emails to members whose membership is about to expire;
2. Automate the sending of emails to you (or your staff) about the members with accounts about to expire (e.g. by email). Ideally prioritize account holders based on renewal value or other relevant factors; and
3. Call those clients (in order of priority).

Corbis’ automated email efforts resulted in doubling its online renewal rates – from about 2.5 percent to 4-5 percent. The follow-up calls further boosted renewal rates to 10 percent in some locations.

What I find particularly compelling is the use of follow-up phone calls. So many Internet marketers seem averse to contacting their customers by phone… but if you have members paying, say, a few hundred dollars per month, isn’t it worth it?

Source: MarketingSherpa, “How To Double Renewals with Triggered Emails and Sales Reps: 6 Steps”, MarketingSherpa, November 6, 2008

Loyalty programs are big business in the offline world. If it’s not frequent flyer programs… it’s credit card points programs… or loyalty cards to be stamped, punched, swiped or signed. All designed to bring customers back into the store to buy more, and in so doing “buy” their loyalty.

I’m guessing that at least some of these are cost-effective. After all, why else would companies pour so much money into them. Then again, having worked in and with corporate marketing departments, cost-effectiveness is not always the number one priority.

So is a loyalty card - or the equivalent - something to consider for your online business? For example, you could introduce a points system where customers earn points each time they buy from you and get a discount or reward from you when they’ve accumulated a certain number of points.

I’m sure there are many more variations you can try too. But before you jump in, consider the argument against using a loyatly program.

In fact, consider the move made by Muffin Break, the biggest muffin franchise in Australia, to cease its loyalty card program of many years.

I don’t know why Muffin Break dumped its loyalty card… but I do know this: I’ve been a loyal Muffin Break customer for several years. (I have a penchant for their blueberry muffins!) Throughout that time, I’ve never bought muffins from Muffin Break because of their loyalty card. And there’s no question that I will continue buying their muffins without their loyalty card. To me, the card was simply a nice-to-have - an opportunity to get a free muffin every now and then.

You see, I am a true loyal customer. The kind of customer you really want - who buys from you week in, week out, because you offer a quality product that I love, not because of added incentives… or “bribes”. I won’t disappear because you no longer offer a loyalty card. I’ll only disappear if you fail to deliver a quality product or service at a reasonable price.

Maybe Muffin Break has realized that it’s best customers are just like me. And that if it continues delivering a quality product, it will continue to attract our business, and it’s revenues and profits will continue to grow… without the need for a loyalty card.

I’m not against loyalty cards per se. I think they have a place. Especially for start-up retailers. But a business that delivers a quality product and great customer service will get loyal customers anyway. It won’t need a loyalty card. And the corollary is this: no great business can afford to rely on a loyalty card for its customers. True, long-term loyalty is earned… it cannot be bought.

Again, I don’t know why Muffin Break dumped its loyalty card. I hope it was for the right reason: that if it focuses on delivering top quality muffins, it will please its customers without having to “bribe” them with a loyalty card.

So when it comes to your business, by all means consider how a loyalty program could work… but also consider the power of delivering quality products and services, and superb customer service, that generate true customer loyalty.

…how to sell, for one thing. Hey, I know - I worked in a big agency, and was the “client” for a few others!

Don’t get me wrong - I loved my experience as a copywriter working for one of the big, multinational agencies.

And I certainly learned a LOT.

But I can’t help but question some of the ideas that were drummed into me as a “big agency copywriter”… which I had to rapidly unlearn when I went into business for myself… and which are just plain DANGEROUS for YOU if you’re trying to make a buck online.

As I mentioned, they didn’t teach me how to sell - i.e. to write advertising copy that actually compels someone to rip open their wallet and buy the product or service.

They didn’t teach me that… and they won’t tell you that. Instead, they’ll probably tell you that if you want to build your online business, you must:

1. Be creative
2. Build your brand.

Hmmm… that doesn’t seem too bad does it? Well, it is. Because it conveys the WRONG set of priorities.

If you sell online - i.e. you sell products and services on your website - then the no. 1 job of YOUR advertising is to generate qualified leads (or, as we say, “traffic”) to your website.

It’s not to be “creative”. And it’s not to “build you brand”.

Sure, be creative - if it generates more TRAFFIC.

And please DO build your brand - as a RESULT of developing a reputation for satisfying customers with great products and services.

But don’t make either of these the PRIORITY in your advertising… because the result will probably be a creative, entertaining ad, with a big, fat graphic of your logo… that does NOT generate enough (or any) qualified traffic to your website!

So…

If you’re considering hiring an ad agency to prepare an ad campaign to generate traffic to your website - and for some, strange, illogical reason you don’t immediately call me (!) - take heed:

If they yabber on about how:

• creative they are…
• the purpose of advertising is to build your brand…
• every ad has to have a “big idea”…
• they’ve won lots of awards,

… jump out of your chair immediately, pick up your briefcase and RUN!

And in case you’re wondering what they DID teach me that could help YOUR online marketing… be sure to read the next issue of Kikabink News!

No question, knowledge is power - with greater understanding you can make better decisions and therefore achieve better results.

But knowledge is only powerful to the extent that it’s actually used. Just like any other form of power - electricity, gas, etc - it lies dormant unless someone pushes the “power” button or turns on the ignition. Which means, of course, that the “switch” needed to transform that knowledge into results is… taking action.

When it comes to Internet marketing, there is plenty of information available on how to improve the effectiveness of your online marketing efforts. When you digest and understand that information it becomes knowledge. But it’s not until you take action that you see the results of all that knowledge.

Unfortunately, we can often end up, not just in information overload, but in knowledge overload - where we know what needs to be done… but just can’t act on it. This may be because of fear… because we can’t find the time to do it… because we’re under-resourced… because we’re too busy acquiring more knowledge… or a combination of all of these.

Unless you can delegate or outsource (in which case you may well be able to do everything!) I say: do one thing at a time. Narrow your focus to what is the most important thing you can do right now to move your business forward. Do that, and only that, before moving on to the next thing. By no means stop learning - a major objective of this newsletter is to be your eyes and ears for the latest Internet marketing news - but your priority should always be on taking action.

You’re better off acting on one thing you know… than knowing 10 things you never act on.