M. Lee Smith outlines current challenges to newsletter publishers.

A successful renewal effort to keep current subscribers in the fold is vital to the financial health of large and small newsletter publishers now that direct mail response rates have declined.

That was the message that M. Lee Smith brought to the Washington NPA chapter meeting this month. His Tennessee-based M. Lee Smith Publishers LLC focuses on publishing state-specific newsletters on health, environmental and employment regulations and law. Editorial content is provided in cooperation with attorneys in each of the 50 states. His firm combines his newsletter operation with a large printing and fulfillment business.

"Renewals are the most important thing we can do in this business even though it is not the most exciting. It is necessary for the long-term success of every newsletter business," he said.

"Once we get a subscriber we work incredibly hard to renew that subscriber since today it costs us much more than it did in the past to get that subscription.

"Our company has been doing renewal telephoning for many years," he said. "If your company doesn't do renewal telephoning as some point in the renewal series, I can tell you that you're leaving a lot of money on the table. It works extremely well for us. We call and call again. Even after we lose them we don't quit there."

Another suggestion he made to improve the bottom line was to get more "cash" from your current subscribers by selling them more things. "You've got to find other ways to generate more cash from your existing customer base particularly when it costs so much to sell the initial subscription," he said.

Smith's firm is still heavily marketing forced-free-trials and expects to drop four million FFT pieces in the mail this year. "We do okay with it but it is not producing the way it once did." One approach that he is trying is marketing FFTs by e-mail. He indicated that it still too soon to tell if e-mail FFTs will work.

Despite the unfavorable climate for direct mail, he said that his firm is "still relying on the mail as the primary vehicle for selling new subscriptions."

He said that most newsletter publishers that he has spoken to are still struggling to be "successful" in electronic publishing--although he cited ucg as one publisher which has been successfully selling content electronically for a long time.

He looks at the internet as both an opportunity and a threat to newsletters. He contended that most newsletter publishers are not doing a very good job in terms of maximizing the opportunities offered by the internet.

Smith said that every publisher that he has talked with finds it difficult to sell new subscriptions and this climate has existed for the past three years.

"This is the hardest stretch that I can remember in the newsletter publishing business in the nearly 25 years I've been in business," he said. "There is tremendous volatility and things are changing. Direct response is down for all of us, and I don't think that it is going to change anytime soon."