Free e-mail newsletter subscriptions are more than giveaways.

Across the industry, publishers are considering free e-mail newsletters as more than giveaways. They're increasingly viewing them as the entry point of their internal CRM system, according to Jalali Hartman, director of strategy at MarketingExperiments.com.

Getting a person to sign up for a free e-mail newsletter is the first step in a process through which publishers can achieve maximum customer lifetime value--the point where a mature customer is buying as much as he or she possibly can from them. Incorporate e-mail capture into as many different places on your site as you can.

That said, most websites carry over dated design elements that are relatively ineffective. Even though a certain percentage of people will sign up for anything that's free, an effective marketer will offer consumers a reason to sign up--something of value in exchange for personal information and permission to contact them via e-mail--to begin a more committed relationship. "Look at the free e-mail newsletter as a worthwhile product in and of itself," says Hartman. "The only difference between it and a paid subscription product should be the price."

Five key elements

Marketers often try to get people to buy or try something that they don't realize they need or even want--or at least to get the prospect's name into some kind of system through which the marketer can later sell something. Hartman outlines five key elements for boosting online registration and beefing up a prospect database.

1. Motivation. Different products prompt different motivation levels among different prospects. Therefore, the design and mechanics of the sign-up form requesting personal information is key when trying to influence someone with a low motivation level, but less important when the motivation value is high.

Newsletters represent a rather low motivation value compared to, say, the high motivation value of an online tax-preparation product. A special, limited-time offer might entice the newsletter prospect to give up personal information online. A person who needs to file taxes and wants to do it online, however, is already highly motivated, so the design of the forms doesn't much matter.

2. Value proposition. Almost as important as motivation, the value proposition requires the marketer to lay out a case for why the person should subscribe to the free e-mail newsletter. The force and clarity with which that value proposition is articulated is usually the biggest struggle, so this is where copywriters and designers must show their stuff. It's also important for the marketer to treat the e-mail captures for the free newsletter with the same attention given to the primary offer on the website.

3. Friction. Each time the marketer makes a new request for personal information--a phone number or credit card information, for example--friction occurs. A certain percentage of people will drop out at each point of friction in the process, so pare down the requests for information to those that you need--i.e., don't ask for a fax number that you'll never use.

Also, use successive degrees of development as the approach goes forward. For example, the goal is to capture an e-mail address, the person's name, and postal address. Offer a free e-mail newsletter on a topic in which you're the expert and the prospect has an interest.

Motivate the prospect with, say, access to all the archives. The prospect simply needs to register an e-mail address to facilitate delivery of the newsletter issues. The person's name and address, while important demographics for advertisers, are not as important as capturing the e-mail address itself. Therefore, put the name and address request on the next page as an option.

Add a motivator--a download, for example--that the person didn't expect. Even if the new subscriber doesn't take the bait and provide a name and address, you still have the e-mail address and can begin a relationship.

4. Incentives. Once the primary friction elements have been identified, counteract them with smart incentives. In a TV infomercial, just when the viewer thinks the offer can't get any better, something worth just as much as the original offer is added on--if the viewer calls in the next 12 minutes. Successful TV marketers know that getting the viewer to actually pick up the telephone is a friction point, so they sweeten the offer just before asking the person to place an order. Use similar incentives in your online marketing process.

5. Anxiety. Anxiety related to giving up information can usually be eased by a little message right under the fill-in box that says how much the marketer respects the consumer's privacy and is fundamentally opposed to spam. Adding that message will normally increase conversion by 10 to 15 percent. Another type of anxiety concerns the product itself, about it being too good to be true, which doesn't really apply to free e-mail newsletters.

Apply the same methodology to each step in the registration funnel

"Motivation, value proposition, friction, incentives, anxiety--those are marketing fundamentals," says Hartman, "and marketers should work on each of those elements in that order."

From start to finish, apply the same methodology to each step in the registration funnel--from the initial free e-mail newsletter signup through all the communication touch points. Then you can convert the person from a free subscriber to an active, recurring paid customer who recommends other people."

Converting from free to paid

How can publishers get free newsletter subscribers to open their wallets? "It's different in every case," says Hartman, "but there are some rules of thumb."

First, capture as much information as possible as part of the free trial. "Get them while they're in the moment," he says.

"In every test that I've ever done, we got more net subscribers by collecting payment information up-front than by letting people access the information for a period of time and then trying to get them to come back to enter their credit-card information."

The only exception is when you're offering completely new products that are complicated or really difficult to explain. Then, you really need to let them experience it and have a really smart follow-up in place--one that has the same precision as the original marketing pages. "That's a good time to offer an incentive," says Hartman. "Introduce something that pushes them over the edge, so they will buy something."

Deliverability

Deliverability, however, has become a problem. "We have a growing number of lists of e-mail subscribers, but the lists themselves are not growing due to the churn," he says. "MarketingExperiments.com was built on an original newsletter, and the same is true for Marketing Sherpa, which we just acquired.

Those assets are still valuable, but we've definitely seen a decrease in the effectiveness of e-mail deliverability across the board. We're looking at ways to cultivate the newsletters as part of our overall customer relationship and encourage the customer to come to us and seek out information instead of always pushing information out to them."

Conceive the offer first

Finally, Hartman suggests publishers conceive the whole online offer before doing any development or design of the program. "That forces you to look at the product and understand exactly what you have to sell," he says. "Then, break the product into parts so that you can introduce just enough to sell at each step--and keep pushing people through the process."

MarketingExperiments.com, 412 Boardwalk, 1 St. North, Jacksonville Beach, FL 32250, 904-993-1970, www.marketingexperiments.com