By cleaning up publicly-available SEC data, Equilar Insight generates approximately $20 million a year by selling group subscriptions, priced above $11K/year, to large corporations. CEO David Chun spoke to us about how the site uses old-school B2B sales techniques to close deals while investing heavily in technology to create online content that’s consistent and convenient. Plus, find out why Chun thinks usage, not renewal numbers, are the most important retention figures.
Company Profile
Source: Equilar
Founded: 2000
No. of Publications: 2 (Equilar Insight and Equilar Atlas)
Employees: 100 full-time
Business Model: Hybrid (90% subscriptions, 10% other)
Paying Subscribers: 1,300+, primarily for Equilar Insight
Location: Redwood City, CA
Website: http://www.equilar.com
Target Market
Equilar Insight targets large corporations looking to benchmark executive compensation across major corporations or nonprofits in order to determine its own executive pay. The site specifically targets HR directors and VPs but is also used by general counsel, finance departments, other company VPs, outside advisors and institutional investors who are voting on executive pay recommendations.
Content
Equilar Insight’s content allows professionals to accurately compare pay packages (including stock options and other perks) across thousands of public companies using SEC and proprietary survey data.
There are also some free articles available on the site, such as “Top 5 Executives” and “2012 Nonprofit Healthcare Pay Report,” but the main benefit of the subscription is access to Equilar’s database, which HR professionals can use to run their own customized searches and benchmarks.
The information is pay-worthy for two main reasons:
- Consistency: Most of the information Equilar feeds into its database is publicly available through the SEC and proxy statements, but Equilar cleans up this data to make it easy to compare and use. (For example, if a CEO makes $1 million a year, but she’s been working for 1.5 months, her pay gets listed as $100,000 in an annual report. Equilar lists it as $1 million in its database.)
- Convenience: Equilar is able to convert its data into presentation-ready Excel documents. This is a huge convenience to busy HR professionals, saving them time and mental effort.
Updates are added multiple times a day, and Equilar has about 25 Web coders and 25 researchers to produce the reports. The company has invested quite a bit in technology, creating a proprietary back-end since the site’s needs are unique and specific.
Revenue Streams
Equilar generates about $20 million a year in total company revenues.
More than 90% of that comes from subscriptions. The remaining 10% consists of a mix of events, customized research, and one-off sales (mainly reports).
Since decisions determining executive compensation often involve more than one person or department at a company, Equilar Insight only offers group subscriptions on an annual basis:
- The Basic plan includes access to executive & board benchmarking data, Top 25 Survey data, and the site’s Knowledge Network.
- The Plus package includes the basic features, as well as more advanced peer analysis and CD&A (Compensation Discussion and Analysis)best practices.
- The Premium package includes the benefits above as well as pay-for-performance and corporate governance tools.
The basic plan, for one to five users, starts at $11,995. Like most group subscriptions, each client’s plan is priced according to the size of the company and the number of registered users, and Equilar does not offer any ballpark figures on its site. However, the premium package is the most popular. And a small percentage of subscribers qualify for Equilar’s “Advantage” discount for smaller companies making less than $500 million in annual revenues.
The reason Equilar doesn’t offer a single-user price is because its data is used not only by the head of HR or Executive Compensation but also General Counsel, corporate secretaries, the finance department and possibly other outside consultants. By offering up to five users on a single plan, Equilar is able to make sure the same data is being used by all decision-makers and stakeholders in a company.
Given that the site has been in operation for 12 years, it’s run a number of pricing tests. But Chun says that despite numerous tweaks, nothing stands out. “People like simplicity — the clearer you communicate the value, the better. The harder you make it it’s just another obstacle to the closing process.”
Marketing Tactics
SEO
Equilar Insight has some of the best SEO we’ve seen among subscription sites, coming up as the first result for the company name, “executive compensation data,” “benchmark CEO pay,” “peer research for companies,” “Board Compensation Pay,” and “proxy voting analytics.” Chun told us the site hired one SEO consultant many years ago but basically do it themselves (as noted above, the site has 25 Web developers on staff). In addition, the company’s relationship with media outlets (See PR), has helped raise their SEO rankings, as well.
PR
The researchers at Equilar double as PR reps, creating content they know the media is interested in, such as the site’s annual report on executive pay or its Behind the Numbers video series.
Postal Direct Mail
The company has a complimentary print publication it publishes three times a year using the site’s own data content and doubles as a direct mail piece. Each mailing is usually around 20,000 to an in-house list.
Trade Show Speeches
The site gives about 10-20 presentations a year at industry events, with Chun doing most of them.
Social Media
Social media does not bring in significant amounts of new traffic, but the site allows readers to share all of the free content. In addition, Equilar’s Behind the Numbers series is hosted on YouTube, making it easy for journalists to embed and post on other sites.
One thing we liked very much is that the URL to which the site’s Twitter profile page links is Equilar’s newsletter sign-up form (http://www.equilar.com/newsletter-sign-up.php).
Conversion Tactics
Since Equilar does not take credit cards online (it bills solely through invoices), the site mainly converts site visitors through follow-up phone calls and live demos.
The site offers a number of free, quality publications, such as its newsletter and reports.
Visitors who download a report receive a follow-up phone call (the second option is an email). These prospects may be sold a subscription plan. Chun explained that many heads of HR and Executive Compensation are authorized to charge the site’s hefty subscription price since the information helps determine multi-million dollar salaries and compensation packages.
Site visitors can also subscribe by filling out a lead generation form. They will then receive a phone call in order for Equilar to make a customized estimate.
The site also offers a free demo via a Webinar to prospects.
The entire sales and conversion funnel is managed in-house by Equilar’s sales staff, which numbers around 15 full-time employees.
Retention Tactics
The average Equilar retention rate is around 90%, and the average account lifetime is between five and six years.
Equilar has a client services team that monitors subscriber activity and provides training and support to clients, which helps with retention. Chun said that having a pro-active sales team, which measures the frequency of client usage and makes contact regularly has also helped with retention.
Cross-Sells and Upsells
When we spoke with Chun, Equilar was not yet cross-selling any products or services, but will likely begin cross-selling Equilar Atlas (of which Sheryl Sandberg is a member!) in 2013.
About David Chun
David Chun was an investment banker who always wanted to start a company and saw that information providers with recurring revenue stream outperformed the market. With the SEC data becoming electronic in the late 1990s, he saw an opportunity to build a business around it, and that’s how Equilar Insight was born.
His biggest lesson learned during the 12 years he’s been running Equilar is that while the costs of operating have gone down, competition has increased.
“Once you get product up and running, it does require fair investment every year to make sure you’re still the market leader. You can’t rest on your laurels.”
He also advises other subscription site executives to look for “leading indicators” in retention marketing, not lagging indicators, like renewal numbers. His specifically cites monitoring usage: “If your account manager sees that an average account is running five data searches, and one account is running one search, that account may need more training or person you’re interfacing with may have left the organization. ” By tracking leading indicators, you’re not surprised when renewal time comes and can intervene sooner.
Vendors & Technology
Equilar manages most of its technology needs in house, but using the following third-party vendors:
Hosting — XO Communications
http://www.xo.com/
CRM — Salesforce
http://www.salesforce.com/
Marketing Automation — Marketo
http://www.marketo.com/
Freelancers — oDesk
https://www.odesk.com/
Subscription Insider Analysis
Equilar seems to have combined both new technology and old-school B2B group subscription tactics. By focusing on building a proprietary system and having in-house Web coders and researchers (who excel at SEO), Equilar Insight is better able to deliver SEC data than free offerings online. This is a major convenience factor for HR professionals, even though the site does not offer “Instant Access.” Instead, Equilar uses old-school B2B sales tactics like phone calls and invoicing to close group subscription sales and bill clients. With a 90% retention rate, $20 million in revenues, and no need to fight credit card churn and chargebacks, there’s little to argue with in that model.
We also strongly endorse Chun’s intense focus on subscriber usage metrics. Among best-of-breed B2B firms, we’ve seen a consistent emphasis on what is increasing called “customer experience,” and it starts with ongoing measurements of usage at the subscriber level. If there’s one guarantee in the paid online content business, it’s that if they’re not logging in, they’re not going to renew.
We have a few recommendations for the site, mainly since there’s always room for improvement. First, the site should change it’s “submit” button on its lead generation for to have more compelling copy and color. The site should also consider offering a trial, particularly the clever multi-user trial created by GenomeWeb. And lastly, the site should consider using affiliates for customer acquisition, particularly trade organizations and Board information sources.
