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Straight Dope Classic from Cecil's storehouse of human knowledge02-Mar-1984
Dear Cecil:
Publishers Clearing House, Reader's Digest and the like are constantly giving away
millions for free. Why? What do they get out of it? This question is really burning a hole
in my brain. --Doug W., Irvine, California
Dear Doug:
I don't want to tax your brain unnecessarily, Doug, especially in view of the fact that
holes are being burned into it, but surely you remember that the Reader's Digest
Association, Inc., publishes a magazine entitled Reader's Digest, to which it is anxious
to have people subscribe. Similarly, Publishers Clearing House is in the business of
drumming up subscriptions for its many publisher clients. Million-dollar sweepstakes
giveaways have been shown to be a pretty good way of doing this, and it is not hard to see
why. I have here a very impressive letter from Reader's Digest that is chock-full of
fascinating gimmicks, including two "computerized sweepstakes cards," a
personalized computer-printed cover letter, and a "Super-Bonus" card with a gold
"bonus box." I am supposed to scratch the box with a coin to reveal the
Super-Bonus prize (a Cadillac Seville, as it turns out) that I could win in addition to
the $250,000 Grand Prize. For those too poor to supply their own coin, a shiny new nickel
is helpfully provided.
We note that the letter skillfully obeys the Five Golden Laws of Direct-Mail Marketing:
(1) Grab the recipient's attention with official-looking verbiage. The Reader's Digest
letter is covered with things like "Urgent you reply by Jan. 30" and
"Attention Postmaster: Requested delivery date is on or about..." It looks like
a subpoena or a tax refund.
(2) Cram the letter full of eye-catching gimmicks. The more items a letter contains (up to
a point), the higher the response rate. If I remember correctly, the optimum number of
items is five to eight. The Reader's Digest letter contains seven items.
(3) Get the recipient involved by giving him/her something easy 'n' fun to do, in this
case using a coin to uncover a secret prize. An alternative tactic is having the recipient
paste a sticker on an entry card.
(4) Give the recipient something of value so he/she feels obligated to participate. You
don't think Reader's Digest really figured nobody could come up with his own nickel, do
you? Significantly, the nickel was plainly visible to the recipient through a window in
the envelope.
(5) Force the recipient to make a clear choice between subscribing and not subscribing in
order to enter the sweepstakes. This is a key point. The Reader's Digest letter contains
two envelopes to return your sweepstakes entry in. One says YES--enter my subscription,
and the other says NO--I do not wish to subscribe. Reader's Digest is legally obligated to
treat entries equally whether you subscribe or not, but most people--and let's face it,
the average sweepstakes participant is no Rhodes scholar--do not realize this. "There
does seem to be a lurking feeling that if I do order the product I will win," a
Reader's Digest spokesman was recently quoted as saying. Ergo, lots and lots of
subscriptions. You see the beauty of this? As far as Cecil can tell, the whole thing is
completely on the up and up; you don't have to subscribe to win. But people THINK it's
fixed ... and so they subscribe.
Devious? You bet. If it's any comfort to you, though, the publishers often think they're
getting screwed too. A magazine executive who has had dealings with Publishers Clearing
House recently told Cecil, "They make themselves a bloody fortune. Literally for
every name they supply you, a magazine publisher loses between $1 and $1.50. If we were to
go through Publishers Clearing House and offer a six-month subscription for $10, we would
get $2.50 out of that $10--they get the other $7.50. As you can imagine it costs us more
than $2.50 to send out six issues."
So why do it? For starters, you hope your loss-leader subscribers renew at the regular
price--although the renewal rate for such readers is notoriously poor. More important,
says my informant, "you can hype your circulation," in hopes that you can
increase your ad rates based on higher readership. "Ad agencies [from whom publishers
try to extract ad orders] don't care where you get your circulation numbers from," he
says. In the long run, however, "it just doesn't pay," he concludes. Words of
wisdom for all you budding magazine entrepreneurs.
--CECIL ADAMS
The Straight Dope / Questions or
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