Adam T. Sutton

Longer Subs Give Higher Lifetime Value

May 12th, 2008

Here’s another eye-opening session at the MarketingSherpa Selling Online Subscriptions Summit in New York City. Michael McCurdy, Director CRM, and Leslie Semegran, Director Online Marketing,, talked about maximizing customer lifetime value. is a site for jobseekers looking for $100K+ jobs and recruiters. They offer subs for a month, six months or a year. And they found that six-month subscribers have a 29% higher lifetime value than monthly subscribers and that annual subscribers have a 39% higher lifetime value than monthlies.

This is a no-brainer, then, right. They tried a few things to push more monthly subscribers into the longer terms without hurting the overall conversion rate.

-> Default to the 12-month option

Customers select their subscription length by choosing one of three radio buttons. The team tried making the 12-month option the default, but that didn’t work.

->Change the copy

They tried adding two sentences of copy to the options, describing the features of the service. The radio buttons still defaulted to the 12-month option. No luck there either.

-> Spell out the cost benefits

Then they changed the copy again, eliminating most of it. Now the options read:

o $15/month for One Year (Save 50%)

o $20/month for 6 Months (Save 33%)

o $30 for one Month

This option worked. Annual subscriptions increased 250%. Six-month subscriptions stayed the same. Monthly subscriptions decreased 15%.

-> No stopping there

They were finished, right? Wrong. Customers got confused. Many expected to pay $15 each month and not $180 once a year. They wrote unhappy emails demanding credit to their accounts.

So, the team added a “Total charge today” feature at the bottom of the page. They also added to the radio button copy:

o $15/month for One Year (Save 50%) $180 billed yearly

o $20/month for 6 Months (Save 33%) $120 billed every 6 months

o $30 for one Month ($30 billed month to month)

This change maintained the more profitable subscription mix and even moved more monthly subscribers to six-month subscribers. And refund requests were reduced by 20%.

The lesson? Your goals can change mid-stream. McCurdy and Semegran started by wanting more long-term subscribers. They got that, but made some customers unhappy. They had to adjust their goal to lifting customer lifetime value without upsetting customers.

Adam T. Sutton

About Adam T. Sutton

Adam T. Sutton, Senior Reporter, MarketingSherpa
Adam generates content for MarketingSherpa's Email and Inbound Marketing newsletters. His years of experience in interviewing marketers and conveying their insights has spanned topics such as search marketing, social media marketing, ecommerce, email and more. Adam previously powered the content behind MarketingSherpa's Search and Consumer-marketing newsletters and carries that experience into his new role. Today, in addition to writing articles, he contributes content to the MarketingExperiments and MarketingSherpa blogs, as well as MECLABS webinars, workshops and summits.

Prior to joining MarketingSherpa, Adam was the Managing Editor at the Mequoda group. There he created content and promotions for the company's daily email newsletter and managed its schedule.

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