Subscription and Bundling Strategy 101: One Size Doesn’t Fit All
Presented By:
Conor Jensen TexasBarBooks Austin, TX
Leslie Sinner McEvoy MN CLE St. Paul, MN
Presented at: ACLEA 54th Annual Meeting July 28, 2018 Portland, Oregon Conor Jensen TexasBarBooks Austin, TX
Conor Jensen builds and maintains the subscription‐based practice manual offerings from TexasBarBooks, the publications division of the State Bar of Texas. TexasBarBooks Online leverages the company's existing print production files to publish their contents on a web‐based application, allowing lawyers modern features, greater convenience, and a cheaper entry price than purchasing the manuals outright. It also serves as the main hub to provide free or discounted material to those on scholarship, working pro bono cases, serving on committees and boards, and law students. When not sifting through files of code, or helping a customer, Conor likes to grow food and turn it into experiments. He also consumes a lot of information from books and screens, processes it into prose sometimes, and wanders around aimlessly, hoping to stumble upon something unusual. He lives in Austin.
Leslie Sinner McEvoy MN CLE St. Paul, MN
Leslie Sinner McEvoy is the Web Education Director at Minnesota CLE. She joined Minnesota CLE in 2009 as a Webcast Program Attorney. Leslie coordinates live web‐based CLE programming as well as on‐demand programming for Minnesota CLE. She is also a mediator and arbitrator and speaks on related topics for Minnesota CLE. She also has served as an adjunct professor of Dispute Resolution at Mitchell Hamline School of Law in both the traditional program and the online hybrid program. Subscription and Bundling 101: One Size Doesn’t Fit All The Subscription Economy: An abbreviated interpretation
Conor Jensen Website Manager, TexasBarBooks [email protected] (feel free to email me!) The Subscription Consumer’s Progress Subscriptions are a share of access to one resource. The customer forgoes ownership for various reasons: • Exclusivity and status • Minimalist preference – pays for experience or service over good • Resource is too large to own and maintain oneself • Predictable consumption rate, eliminates buying decision
Pre-Industrial Post-Industrial Consumer-based Internet Boom Information Age Society Ex. Food Staples, Ex. Telecomm Ex. Exclusive Web Ex. Every type of Theatre season Services, Daily Ex. Diner’s Club Content, email good, SAAS, tickets, elite social Newspapers, Cards, collectibles newsletters, early Amazon and other clubs, periodicals Athletic and Country and homemade adopter e-commerce supply Clubs products like zines e-commerce chain innovation and comics, MLM’s, services, cell and mail catalogues and cloud services clubs Thought Exercise
What was the first Internet-based subscription product you used? o!What was the resource you were sharing? o!Why was the good or service better consumed that way?
o!Do you still subscribe? Or, why did you cancel? The Business Perspective… Subscriptions have one prize in common:
Annuity Revenue Stream
Your product or service becomes a predictable and stable asset.
NOTE: I used a subscription service to license this photo! Breaking it Down…
Non subscription products require the resource-heavy process of reacquiring customers each time a new product version is released.
Even the most devout follower of your line of products needs some type of explanation.
The lure of the subscription-based model has increased for all businesses in tandem with the fast- paced innovations in production and delivery systems.
Largely because: • Marketing can focus on accumulating more subscribers instead of reacquiring old customers for new sales. • Customer Service can build relationships with an increasingly familiar stable of customers. • Developers can make incremental improvements rather than endure the risks of new version releases. Our Subscription Story October 2015 to present What we already had …
•! 3 full-time production technicians •! Authoring tool (Adobe Framemaker) •! Well-established Publishing Processes Print version of Texas •! A list of customers who got a new version Family Law Practice of each title release Manual
Downloadable version including PDF with content and editable Word forms for use. Subscriptions Just Made Sense
What was the resource being shared?
A server replacing binders full of materials, or folders full of unneeded files that needed to be stored locally Why was it better (for some)?
• Customers were now working on multiple devices, including tablets. • Purchasing decision got lighter for customers. They could buy in much cheaper, and proceed with the manual if it was worth it to them. • Distribution for discounted and free versions became easier and more controllable – ensured law students, scholarship attorneys, and pro bono donations were using latest version of our material. • Brand update – gave our company a modern look and feel. A title traditionally with high age demographics started attracting young lawyers. And those production efficiencies?
• Some luck, some smarts, some lessons • Our already in-use word processing software developed a much improved HTML converter. • Our Adobe software trainers proved competent in a seminar, so we hired them to build for us. They made a custom tool that placed our HTML conversions in a modern web template with light Web app features. It utilized one-by-one form downloads to repurpose files that already existed. • One additional staff member learned the code of the tool, and the ins and outs of the content display. Knowing the product deeply in-house saved on recurring maintenance costs. • Integration into established internal processes is a constant work in progress. Acceptance is the answer. What we had now… Preparing for Launch Easier than expected As expected More challenging than expected •!The web developer of our main ecommerce site built a subscription customer management tool. •!Our marketing team strategized to get as many of our current book customer’s eyes on the website as possible. •!We beta tested 100 users and surveyed 15 by phone. •!We had extensive meetings for launch preparation and sourced many opinions. Integrating all suggestions proved less useful than waiting on customer feedback. •!Integrating and disrupting well-established internal processes. Lift off and beyond…
Lessons learned: •! A “good enough” product is a GREAT product. •! Minimum Viable Product—There will be customer feedback. The less resources you burn before the customers use the product, the more flexibility you have to make responsive improvements. •! There is a big distinction between how you want users to interact with your product and how they use it. •! DRY – Don’t Repeat Yourself •! An old adage of the computer programming world, don’t stray far from all of the conditions and parameters established by mainstream subscription services. Not only are these thoroughly tested, they are what customers expect! •! Starting from scratch is a last resort. There is a big difference between how you want users to interact with your product and how they interact with your product. PATIENCE! • Much harder than expected. Customers accumulated … • They had needs. We adjusted. We created a customer service subcommittee, and new CS documentation tools. We marketed internally to educate staff. We renamed our products to convey different format options for each title. And we scaled up… •! Adding 5 more titles with the conversion tool Texas Real Estate Forms Manual Texas Guardianship Manual
Texas Foreclosure Manual
Texas Collections Manual Texas Business Orgs Manual
More titles coming soon! … The Sales Charts Looked Up! And we shall not forget that the transition to online subscriptions worked because ... many still just wanted the GOOD OLD-FASHIONED BOOK!
And we were grateful for them. Subscriptions are not easy. But the value comes in time, in the form of :
Annuity Revenue Stream
• Incremental Product Development • Increased Customer Relations • More Predictive Budgeting • Marketing toward accumulation over reacquisition = good business • •
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• Bundling Basics for CLE Leslie Sinner McEvoy, Minnesota CLE ACLEA Portland July 2018 What are your favorite bundles? Consumer & CLE Bundling: The Science What the Experts Say….
!!What is Bundling? !!Why Bundle? !!Psychology of Bundling !!How to Bundle !!Marketing Tips What is “bundling”?
!! “A product bundling strategy is a marketing approach where multiple products or components are packaged together into one bundled solution.” Product Bundling Strategy, Neil Kokemuller.
!! Examples:
!! Computer and accessories
!! Multiple bank account benefits
!! Cable company packages offering phone, data and TV
!! Fast Food Restaurant food items
!! CLE Examples:
!! Multiple programs purchased together
!! Programs bundled with publications Why bundle?
!! MUTUAL BENEFITS !! Company !!Increase sales of individual products !!Increase overall revenue !!Decrease cost of promoting individual products
!!Raise visibility of necessary but less popular products
!!Competitive advantage !! Customer !!“Cluster of satisfactions” in one purchase – efficient satisfaction of multiple needs
!!Price reduction through “economies of scale” Keys to Success: Proper Focus
!!Focus: !!Customer Convenience !!Value for Customer !!Results: !!More revenue !!Increased customer loyalty Psychology of Bundling
!! Why does bundling separate items together at a discounted price work? Customer Value Perception
!!Bundle must be “worth it”
!!Cheaper & Desired
!!Complimentary products
!!Convenience – one stop shop
!!Simplification of purchase decision How to Bundle
!!Focus: !!Customer Value & Convenience !!Market Driven
!!Complimentary products !!Customer Feedback & Data !!Product Performance Analytics How to Bundle
!! The customer needs to see value. !! Three reasons customers will consider buying a bundle:
!! They see a huge savings
!! They love the product combination in the bundle
!! Both How to Bundle – Product Combinations
!! Products have a rational relationship to each other !! Main product with similar products !!Ex. Books or Music of similar genre or “2 for 1” or “2 for less” !!Ex. All June Webcasts or all Business Law Webcasts in June !! Main product or products with “accessories” or complimentary products
!!Ex. Earrings to go with the Necklace !!Ex. Business Law Webcasts with Ethics and/or Bias Webcasts !! Main product with different products !!Ex. Different types of appliances !!Ex. Business Law Webcasts with Business Law Deskbook subscription Key Concept: Choice
!! Sales can soar when companies bundle products together into one cheaper package.
!! Here’s the catch: Customers who value the bundle may not value given ONLY the option of a bundle WITHOUT the ability to buy a burger alone.
!! Mixed Bundling: Bundle and Stand-alone option
!! Pure Bundling: Bundle only option The “Secret Sauce”
!! All products in the bundle are of VALUE to the customer
!! Bundle price is CHEAPER than price of products bought individually Marketing Tips for Bundles
!! Highlight Bundle Options
!! Emphasize Savings
!! Communicate Value
!! Timing Bundled Benefits: Netflix Bundling in CLE
!!Similar Products !!Different Products !!Set Selection !!Curated Selection !!Pick Your Own Bundling: The Experience Minnesota CLE Experience Types of Bundling - Web Department
!!Season Passes !!Webcasts !!Webcast + Publication !!On-Demand Seminars Minnesota CLE Requirements
3 year 45 credits Live 30 On-Demand reporting total credits 15 credits cycle Annual Season Passes Different Strokes for Different Folks - Annual
!! Limited Pass – 10 in person courses - $1,295 !! Unlimited Pass – unlimited in person courses - $1,595
!! Webcast Pass – unlimited live webcasts - $1,495
!! Super Pass – unlimited in person courses, webcasts and on-demand - $2,095
!! All include discounts on publications too !! https://www.minncle.org/ SeasonPassPurchaseSeminars.aspx Webcast Bundles Purchase Options: Single
1 hour – - 2 hour - 3 hour - $75.00 - $135 - $195 - $75.00/hr $67.50/hr $65.00/hr Webcast Packages June 2018 : $14.50/hr Curated Series: Divorce A to Z Part 1: $31/hr
Part 2: $39/hr On-Demand Bundles Purchase Options: Single
1 hour – - 2 hour - 3 hour - $65.00 - $135 - $175 - $65.00/hr $67.50/hr $58.34/hr Limited – 50% off - $32.50/hr
Purchase Unlimited – 50% off - $32.50/hr Options: Webcast – 50% off - $32.50/hr Pass Super – FREE
5 hour - $195 - $39.00/hr Purchase 10 hour - $295 Options: - $29.50/hr Bundles 15 hour - $395 - $26.34/hr
Bundling Revenue Impact
!! 25% of Web Department Revenue from the Web Pass
!! 35% of Webcast Revenue from Web Pass
!! 25% of Webcast Revenue from Webcast Packages
!! 50% of On-Demand Sales from On-Demand Bundles
!! 55% of On-Demand Bundles Sales from 15 credit Bundle Bundling in CLE – Current Trends
!!Texas !!? !!? !!? !!? Bundling Resources
!! Product Bundling Strategy - http://smallbusiness.chron.com/product-bundling-strategy-41789.html
!! Bundling Pricing Strategy - http://smallbusiness.chron.com/bundle-pricing-strategy-67049.html
!! Product Bundling is a Smart Strategy – But There’s a Catch - https://www.forbes.com/sites/hbsworkingknowledge/2013/01/18/product- bundling-is-a-smart-strategy-but-theres-a-catch/#3f315a17a516
!! Product Bundling: How it works, optimization tips, and examples - https://www.skubana.com/product-bundling/
!! What is Product Bundling & How to Bundle Your Products to Increase Average Order Value? https://www.tatvic.com/blog/product-bundling-bundle-products-increase- average-order-value/
!! 3 Ways Product Bundling Increases Revenue https://bluestout.com/blog/3-ways-product-bundling-increases-revenue/