Lee Bellinger succeeding with almost completely outsourced operation, while he works from his yacht on the Washington waterfront.

Successful newsletter publishers enter the business in a variety of ways. Lee Bellinger had been editing The American Sentinel as a contract editor for three years in 1988 when he asked the publisher, Tom Phillips, for a raise and was told, "Why don't you buy the newsletter instead?"

Originally titled The Pink Sheet on the Left and published since 1971, it was the first newsletter Phillips acquired to launch his business, but by the late 1980s the conservative political title didn't fit in the Phillips Business Information Group. [ *]

The American Sentinel is unusual among conservative publications. "We're not sponsored by a foundation, we don't rely upon donors as some conservative organs do," Bellinger noted. "The American Sentinel is strictly a subscription-based, for-profit operation."

Bellinger recalled his first years of owning the newsletter. "It took about five years for me to get the newsletter to the point where it became really successful for me," he said. "I now run an almost completely outsourced operation. At best, I can be described as 'administratively challenged,' but I think I've de signed a system which allows me to concentrate on what I do well.

"Our fulfillment operations are handled by a firm in New York State. I'm in the Washing ton area, but our corporate headquarters are in Charlotte, N.C., and we handle bids and production from there. Bruce Moses in Oregon has done our direct marketing operations for six years. He's great. If he's made a mistake in that time, I haven't found it."

Outsourcing essentials

"Setting up this type of outsourced operation is not as easy I may make it sound," Bellinger said. "The key point is that the vendors you deal with can't just be good, they have to be superb. And I have one person on staff in Charlotte who functions as our administrative center of gravity."

Bellinger observed that it's technology that makes this type of outsourcing possible. "With it I can run our operations from remote locations, even including the company's 40-foot yacht on the D.C. waterfront. 'Off the Record,' the name of the cruiser, is also used to entertain friends and contacts in D.C., and it's also an excellent location of confidential strategy and business development meetings, which can thrive in an informal atmosphere."

Bellinger described the operation as an amalgamation of a publishing and a mail order business. "We do a lot of business in special reports," he explained. "I try to publish about six a year--outsourced, of course. One typical title is 'How to Hire and Fire Lawyers."'

Regarding another title, "The Ultimate Privacy Protection Guide," Bellinger said, "I hired an agency to 'take me apart,' to learn everything about me they could, and then construct a 'defense system' that would prevent people from finding out this type of information about you." Prices for these reports are often about $99.

Note: George Lutjen, once publisher of the newsletter center at McGraw-Hill, explained to me years ago that "a hardcover book is much more satisfactory for the ego of the author, but for the pocketbook of the publisher printing the same information on hole-punched paper and putting it in a looseleaf binder and calling it a manual or a report is much more lucrative."

Editorial strategy

"I think the success of the newsletter for over 30 years now comes from being 'tactically agile,"' Bellinger said. "When I first was editor in the mid-'80s, we bashed the Soviets and arms control. After the U.S.S.R. imploded, our target of opportunity became the Democrat-controlled Congress. In 1995, after the Gingrich Revolution, we focused on the 'police state' that the Clinton administration was establishing after Waco and the Oklahoma City bombing.

"Today we monitor the state of civil liberties in the U.S. We try to give readers 'action to take' information. Here's a small example. The Metro transit authority in Washington has changed the name of the U Street station to the 'African American Civil War Memorial' stop. Fine. But they still aren't acknowledging the correct name of the Ronald Reagan Washington National Airport. It was established by an act of Congress. We publish the name, address and phone number of the top Metro official. He'll get a couple hundred calls and letters.

"People are asking," Bellinger said (including your correspondent), "that if in my secret heart of hearts a third Clinton term wouldn't have been better for business than Bush's election.

"Bill Clinton was good for conservative publishers and fundraisers across the board, but I believe The Sentinel was less tied to Clinton-bashing than many others. He's hardly been mentioned in our marketing pieces.

"We write for intelligent, upscale conservatives, 'Libertarian Republicans.' Right now we're covering stories of Republican turncoats in Congress who are undermining the Bush Tax Cut plan. The struggle between the Jeffersonians and Hamiltonians in this country has been going for for 200 years and isn't anywhere near over."

Marketing strategies

"We have several control offers. One of our best is the '7 FREE REPORTS' deal. For a one-year subscription the reader gets the choice of two and for a two-year offer all seven. It moves a nice percentage of orders to the two-year deal and gets us a subscriber we know likes to buy reports. [Copywriter] Craig Huey is always after me to do a 'personality package.' I think the issues we cover are more important to our prospects than me, but who knows someday I'll probably let him try it."

Competition

"I don't find it to be a cutthroat business," Bellinger said. "We all tend to use each other's lists. Human Events and The American Spectator are great lists for us. in addition, we're having success with some medical lists. David Kessler's regime at FDA made libertarians out of a lot of physicians.

"Whenever I see Bill Kristol [editor of The Weekly Standard] on the TV talk shows, he's educating viewers to the issues we mail on. I do stay away from the militia groups and don't want anything to do with the 'Holocaust Never Happened' people.

"We've grown now to about 21,000 subscribers with a conversion (first-time renewal) rate of 42 percent, which is outstanding for consumer titles."

The online cattle drive

To date, Bellinger is resisting. "My observation is that the only publishers making real money on the web are the people who sell reports that tell other publishers how to make money on the web. The only surprise for me is that so many people were caught off guard by the collapse of the dot-coms--the venture capital funding they could get provided an artificial market for b-to-b service providers."

In his own market he noted, "The conservative market tends to be dominated by huge foundations that raise lots of tax-deductible money from a handful of donors on the promise that they will get their many 'free' reports into the hands of millions of internet surfers. As a result, internet surfers are conditioned to getting everything free, and they are for all intents and purposes waterbugs, not dedicated readers. Under the current internet model, selling conservative reports is a dubious proposition at best."

(*.) The original title, Pink Sheet on the Left, was a reference to a scandal in the controversial Nixon-Helen Douglas Senate campaign of 1950. Tom Phillips eventually decided that it was just too "inside baseball" and picked The American Sentinel.

When Bill Clinton was elected President in 1992, Lee Bellinger changed the name back to The Pink Sheet. "I thought it would be a very left-wing administration--a good time to return to our 'roots,' It just confused everyone. People didn't know what newsletter they were receiving; it was affecting renewals. In about six months we simply decided to go back to The American Sentinel."