How to change prices

Raising the price of a publication requires considerable attention to detail. In addition to the obvious worries about the financial effects of a price increase, you must change the price in dozens of places, decide how to handle subscribers you are in the process of trying to renew, and figure out what to do about new orders that come in at the old price.

Effects of a price increase

Usually—but not always—higher prices mean fewer new orders. Over the years, we have tested a number of prices for publications and have almost always found that the higher the price, the fewer the orders that are received. However, the opposite may hold true when dealing with some publications. Let's take the following example.

Years ago a company ran a test for a highly technical accounting publication. The outside copywriter who prepared the mailing piece always inserted "TK" (journalese for "to come") everywhere the price was to appear in the copy. Whenever the production people at the company saw "TK," they knew they should insert the actual price.

For this particular mailing, the company intended to use a price of $36. However, the copywriter mistakenly types $86 instead of "TK." The company missed the error in production and went ahead and mailed the piece at the then unheard of price of $86.

The results were very encouraging, but the company felt that they had to go back and test the $36 price anyway to see if they got an even better response. When they did, they found that they actually received fewer orders at the lower price. Apparently, the customers felt that in such a technical area, the information would not be valuable unless it cost a lot.

The point is that while industry rules of thumb are useful, you should always conduct your own tests. Your publication may have some special quality that will make it behave differently than the rules say it should.

You should also look at the effects of price changes on new orders and on renewal orders separately. We have found that renewal orders are relatively insensitive to price increases. The renewals are likely to fall off if you raise prices, but not as steeply as the new order response rates. That is one of the reasons you see so many mailing pieces offering a "special rate for new subscribers only."

Checklist

Once you decide to raise prices, you should draw up a checklist of what you need to do and when you need to do it.

The following is a sample checklist:

Once all the steps are down on paper, it is usually a simple matter to carry them out.

Using QuickFill

QuickFill can easily accommodate any strategy you choose for raising prices. The key is to think through clearly how you want to treat each of the three different groups:

Let us review some of the possibilities for each of these groups and discuss how to handle them in QuickFill. Let us assume you are changing your price from $72 for 12 issues to $96. Let us further assume, you have been using a renewal series called STD72.

Customers who have not started the renewal process

Probably the best strategy to pursue with this group is to simply present them with the new price when it comes time for them to renew. You will not gain anything by pointing out to these customers that you now have a new, higher price. To follow this strategy, you must take the following steps in QuickFill:

If you have been using more than one renewal series, you will need to repeat these steps for each series that you have been using.

Now when it comes time for these customers to be renewed, they will automatically receive notices at the new price.

Customers in the middle of the renewal process

It is probably best to continue to send these customers renewal notices at the old price and wait until their next renewal to present them with the new price.

To carry this strategy out, all you need to do is change your STD72 renewal series, so that the 'Next renewal series' fields contain the new STD96 series the next time they come up for renewal.

If you prefer to raise the price immediately for subscribers in the middle of the renewal process, just run the 'Change renewal series' update to change series STD72 to STD96. Specify that you want to change all customers, regardless of whether or not they have started the series. (This can be done at the same time you change the subscribers who have not yet started.)

(Click here for more information on the 'Change renewal series' update.)

New customers

You must check two places to change the renewal series used for new orders you receive after the price increase. The first is the renewal series field on the publication definition renewal tab. QuickFill uses this series for all new customers, unless you have overridden it by specifying that QuickFill should use another series on the tracking code. The second place is on your tracking codes. You should check your tracking codes and change any renewal series that you specified in the definitions for the codes.

Suppose, for example, that you have a special student offer with its own renewal series called SDNT72. This series is used on a tracking code called STUDNT and has special messages—for example, "special student rate"—that are appropriate to your student offer. You will need to create a new series (SDNT96, say) and link it to the STUDNT tracking code. You do so on the 'Tracking codes' definition screen.

Finally, you must decide whether or not you will honor new orders at your old prices. If you will, you can just leave your tracking codes as they are. Orders that come in on old order cards with the old price will be automatically filled at that price.

If your policy is to charge the full new price for these orders, you have two choices. You can either mark the old tracking codes "expired" (you do this on the 'Tracking codes' definition screen), then create new tracking codes for the new prices. Or, you can put the new prices directly onto the existing tracking codes.

We suggest that you use a new set of tracking codes. That way you will leave a clearer record of exactly what was done in case you have questions later on.