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Looking for Mr. Good Price. (DM Notebook).

It is true that newsletter pricing is largely a metaphysical exercise that bears no particular relationship to cost of production. But there are realities that have to be dealt with.

1. If you have established competition in, say, the $200 price range, it will be difficult to enter with a $500 price.

2. Some markets, i.e. nonprofits and education, are price resistant. Newsletters in those areas tend to cost less than others directed at Fortune 1000 firms without regard to questions like frequency and editorial intenstity. It's what those markets will bear.

But say you are an established publisher with $177 twice-monthly. Renewals are holding but new subs seem ever more difficult to acquire. What are your pricing options?

Go up. Directly to $197 or in two annual $10 bites. No one who likes your newsletter is going to not renew because the price is $10 or $20 more than last year. (If times get that hard in the industry they may not renew at any price.)

Why $xx7? What makes "7" a magic number for ending digits? Ray Henry later a founder of the Newsletter Association, claimed on a panel at one of Howard Penn Hudson's early newsletter seminars some 30 years ago that "I made it up."

More recently Marlene Jensen said she has tested "7" extensively and "it gave up to a 10 percent lift over prices without it." Her conclusion: "The frustrating thing about direct response is that we can know WHAT works but we cannot know WHY" (NL/NL 1017/02).

On the other hand, Tom Phillips of Phillips Publishing International used to say, "$97? $147? $197? Why give away two bucks a subscriber? Go directly to $99, $149, or $199."

Price point are real. Publishers have found resistance when the price crosses a mark, $100, $200, $300. In the ethereal regions, titles with prices like $795 or even into the four digits, this is probably less true. These subscribers do have the deep pockets to pay for information.

Magazine publishers have lots of data to argue over prices like $17.95, $19.95, and $23.95. There's much less information available about products priced in the range more typical of newsletters. I did know of one multi-title business publisher who realized that across all their titles they had literally tens of thousands of subscribers. They added 98 cents to each price figuring they'd get tens of thousands of dollars in return for no effort at all.

Consumer publishers are the most conservative. I used to do an annual price survey. I'd see the same consumer titles holding the line on price year after year. Dennis Syik, who was profiled in NL/NL a couple of months ago (ACC Sports Journal) has taken 20 years to get his price from $35 to $45. Consumer publishers could raise their price $2 or $3 every other year. No one would strongly object. Honest.

I sound like a "price hawk," but I continue to believe, for most newsletters, there are fewer people interested in subscribing than the publisher would like to believe, but that those who are interested will pay more than the publisher suspects.
COPYRIGHT 2002 The Newsletter on Newsletters LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2002, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Author:Goss, Fred
Publication:The Newsletter on Newsletters
Date:Dec 15, 2002
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