Consumer publisher Garret Wood relying increasingly on ancillaries.

Garret Wood never gave a thought while growing up as to whether he wished to become a second generation newsletter publisher as a career because his father, Wallis W. "Chip" Wood, had not yet founded Soundview Publications.

Chip had had a varied career that included marketing copy-writing for conservative and investment newsletters until, in 1989, he formally took over publishing and marketing responsibility for Larry Abramson's Insider Report.

At the same time, having left college, Garret was working in the bar-coding industry. "It was boom times there," he said. "Everyone needed our services and I was working 80 hours a week for not very much money.

"My dad realized his little venture was turning into a 'real business' with an office and a couple employees. At that point I joined as print and production manager, similar actually to what I had been doing with the bar-coding firm," Garret said.

"To be honest, we thought of it as an interim position for me, something I could do while considering career choices and not working 80 hours a week.

"It turned out to be a perfect spot to learn the newsletter business because everything we did, editorial and marketing, went through my hands. I soon became fascinated with the marketing writing.

"Through the years we've moved more and more into the health market and I have to say, no offence intended, that it suited me to get out of the geopolitical area and all of the controversies there.

"Today we have only one financial title, The Gold Stock Report, although we do have hopes to build it."

Other Soundview titles include Women's Health Letter, Second Opinion, and Caribbean Travel Letter.

Marketing

Soundview still relies very heavily on direct mail. Typically they use a self-mailer, sometimes a four-color magalog, but often in a black-and-white "special report" format. They normally alternate between the self-mailer and the materials "repackaged" into a #10 or #14 envelope.

"One thing I decided this fall was that it was a mistake to be in the mail with the self-mailer format at this time of year when your piece hits the prospect's mailbox buried among 30 Christmas catalogs. Next time we'll definitely be using an envelope format at this time of year," Wood said.

"We continue to get good response, but the market is tougher and tougher. Expenses for everything--postage, printing, paper--continue to go up. Our prospect audience is very sophisticated, they see and read everything, and we face tough competition from Phillips and Agora and other health publishers. We're all after the same audience," he said.

"We should be heading into the best of times. The prime audience for our titles, boomers, are moving into middle age and retirement. Time and numbers are on our side, but we are not there yet.

"My dad and I say to each other that if we were putting out work of the quality we do today 10 or 15 years ago, we'd be multi-millionaires."

Ancillaries

Like other consumer health publishers, Soundview is now heavily involved in the ancillary marketing of vitamins and supplements. "We have to constantly work to be on the leading edge," Wood said. "We deal with one lab in particular and with a couple independent formulators. We have to be competitive, but of course everything we offer must be fully FDA and FTC approved.

"These products don't yet represent 50 percent of our gross revenue, but they are responsible for 75 percent of profit. And that's recognizing the fact that this type of sale is entirely different from newsletter subscriptions which have the wonderful tax benefit of deferred subscription income immediately," Wood pointed out.

Today, the in-house staff at Soundview in Atlanta is 24--18 of whom are involved in fulfillment of orders for special report premiums and other ancillary products.

"The reason ancillary sales make up so much of our profit is, because of competitive reasons, while costs go up, we're pretty much 'trapped' with subscription prices in the $39-$49 area, unlike specialized investment titles which can go to $100 or more," Wood said.

"And we make these offers--you know--'Get 17 special reports free when you order' and '100 percent satisfaction guaranteed or all your money back.' As far as I know, no one has made techniques like FFTs work in low-price consumer newsletter marketing.

"And with the low prices, we live with conversion and long-term renewal rates that business newsletter publishers would find to be catastrophic, conversions around 20 percent or even in the teens, and renewals at the 30 to 40 percent level."

Wood said that he has become more involved in marketing. "My dad and I have discussed 'succession planning' and agreed if we left responsibilities as they were, Soundview would be a very well managed company that slid into bankruptcy.

"Right now we use some good outside copywriters, but I'm writing much of our internal marketing, inserts, and offers to house lists.

"We tended sometimes to treat outside copywriters as inviolate. We'd hire them, get their stuff, mail it, and sometimes lose miserably. Today we critique strongly everything we put out before it goes in the mail," Wood said.

"I've spent time studying all the 'great books' of direct marketing. It is a form of scientific writing. As the old joke goes, "That's why it's called COPY-writng, because you copy what works.'

"I look at it this way. There are headlines which work almost every time. Should I use one of these or spend my time trying to create all new 'great headline'?"

For the record, Soundview Publications has won a number of awards in The Newsletter on Newsletters' Newsletter Promotion Competition.

The internet

"Our experiences haven't been that good," Wood said regarding online publishing. "Initially we were pushed online by the audience for our investment titles. It was the high point of the market boom and people were daytrading.

"We went the route of choosing the weird little guy with servers in his basement, but he goes out of town for the weekend and the site goes down and you're stuck," Wood said.

"So we then went the route of the big internet company with impressive glossy offices. And we wrote them impressive checks as well, but it had the same sort of problems, not meeting schedules, costs way over budget.

"Now we're doing it again, but this time in-house. (Friends tell me, 'Now you're trying the third bad way to go about it.')" Wood said that Womenshealth letter.com will be online "soon."

"I've come to the conclusion that it can be basic. Having good copy and changing it frequently is more important than design.

"We'll include a free e-zine and embed ads in that," Wood said. "We may be moving to a 24-hour 800 number. Up till now 'regular business hours' have been satisfactory for us. Our audience is older, retired people, the calls come between 11 a.m. and 3 p.m."

Always with an eye on the competition, Garret Wood concluded, "I look at Bill Bonner at Agora as the gold standard for this type of marketing. We missed a golden opportunity but we'll get there."

7100 Peachtree Dunwoody Rd., #199, Dunwoody, GA 30328, 770-668-0432, fax [phone].