Northstar Media successfully changed the tire on a moving car in 2011 by leveraging its existing databases to launch travel42, a B2B subscription database providing customizable reports to travel agents in the US and Canada. We spoke with Tom Cintorino, EVP Digital Media, about how travel42 created a site and content with a better value proposition than the free, user-generated travel reviews out there, as well as how the site acquires new subscribers through marketing deals with travel consortia. Plus, find out how the site is getting an 87% retention rate and selling site licenses with tiered pricing.
Company Profile
Founded: January 2011; parent company Northstar is 75-years-old and has had profitable websites for the past 10 years.
No. of Businesses: 7 publications, 35 live events, and a wide array of digital products, including data licensing and marketing services (includes building websites for customers).
Employees: 9 full-time on travel42; more than 200 for whole company.
Business Model: 100% subscription
Paying Subscribers: 7500 users, combination of site licenses and individual subscribers.
Location: Winston-Salem, NC, with offices in New York, Chicago, Los Angeles and Secaucus, NJ.
Websites: http://www.travel-42.com/
Target Market
Northstar Media has three primary audience segments–travel agents, meeting professionals and corporate travel managers. The majority of their business revenues are through advertising and events.
Travel42 targets their first audience segment — travel agents — working either independently or within a company in the US or Canada.
Content
Travel42 provides travel agents with customized reports of more than 5,700 destinations, 10,000 hotels and more than 300 cruise ships for clients, based on three existing Northstar digital products: the STAR Service database of hotels and cruises, Weissmann destination reports and Intelliguide Corporate travel alerts. In 2011, Northstar integrated these databases into one, re-branded and built a whole new UI that allows travel agents to create customizable reports with the subscriber’s logo, photo and contact information. These reports allow travel agents to keep their clients by allowing them to access a single source for comparable reports on multiple destinations. And subsequently, Northstar was able to retain most of its audience while free online reviews were changing the travel information industry for most other publishers.
The reports are populated with information from the databases, with hotels and destinations serving as the primary data points. The site’s UX design lends itself to a shopping cart-like experience where users can include or omit information as they build their customizable reports. Users also get alerts via a personal dashboard on the site.
The site is pay-worthy because the editorial content (i.e., 10,000 hotel reviews and 5,000 destination reviews) is professionally done according to a strict stylebook; these are not user-generated reviews like those on TripAdvisor and Yelp, written in first person and with a love it/hate it feel. Instead, the reviews are “very sterile,” says Cintorino, and presented in a standard format so that agents can skim for the information they need for their clients, whether they’re reading about Bermuda or Tokyo.
The site does not necessarily add “new” content or reviews, but rather focuses on updating the reviews on an algorithmic basis. Tier one destinations like New York and Paris are updated annually. Tier two destinations are updated every two years. The site will also update information when subscribers request it.
Currently, travel42 employs about 200 correspondents on a freelance basis to update the reviews. The site is also exploring Web technology to update factual information that’s doesn’t need human interpretation, e.g., museum hours.
Revenue Streams
Travel42 is making about 7-figures a year, and 100% of revenues come from subscriptions.
The site has a slightly complex pricing strategy that is not entirely clear on their pricing page (see screenshot below).
The first user in any company is charged $42/month, and must commit to a one-year term. If they cancel before the year is up, they forfeit the entire year’s subscription price. After a year, they are on a month-to-month renewal cycle and can cancel anytime.
If additional users join under a company’s site license, they are charged $32/month, and must also commit to a year.
Cintorino says that the few cancellations they get before the one-year mark follow the 95/5 rule; 95% pay the fee and 5% are excluded. Possible exclusion criteria, which are evaluated on a case-by-case basis, can include extenuating circumstances, such as a travel agency shutting its doors.
Because travel42 had the advantage of its Northstar sibling publications to draw upon, the site has not conducted extensive price testing; instead, it opted for a few surveys before launch. But Cintorino advised other subscription marketers to control their pricing from the start. “If you have a product which is all over the place, it’s extremely hard to get it under control and in a manageable scenario.”
Marketing Tactics
According to Cintorino, travel42 has 17,000 unique visitors per month, and more than 400,000 page views per month. Most of the traffic is direct.
Marketing Deals
Most of travel42’s subscribers are acquired through marketing deals with consortia, a conglomerate of travel agencies that have joined together to form an organization and negotiate better pricing and terms with travel suppliers (e.g., Hearst rental cars, Norwegian cruises, etc.). The consortia will allow travel42 to market through events and other programs, and in exchange, any new members acquired through the consortia are offered a discount. (The consortia are not affiliates and do not get a commission on subscription sales.)
Trade Shows
Travel42 will participate in trade shows, many of them are hosted buyers. There’s usually a speed-dating feel, where suppliers and travel agents meet each other.
Northstar also has its own trade shows, at which travel42 will get a booth, host focus groups, and get one-on-one meetings.
Leveraging Northstar Properties
The site will leverage other Northstar brands by sometimes getting mentioned in the editorial copy.
Northstar also has the email addresses for about 60% of the universe of travel agents. Travel42 will use existing lists to cross-sell subscriptions.
Advertising
Travel42 also pays for some advertising in outside print magazines catering to travel professionals.
Blogging
Four of travel42’s editors blog under “Recent Tipster Posts” featured on the homepage of the site. One of the site’s strategies for 2014 is to build up bloggers from external sites that link back to travel42. “Our goal is to be voice of the industry,” says Cintorino.
SEO
“If we have good SEO, it’s by accident,” says Cintorino. “I don’t expect for travel agents just to find us, I expect them to hear about us through the industry, consortia, etc.”
That said, the site has good SEO, listing first in organic results for “hotel reviews for travel professionals.” It was “set-up” according to Cintorino and there is no one on staff actively managing it.
Group Subscriptions
Travel42 generates most of its leads for site license sales through trade shows. It values identifying internal champions for site license sales, and its online conversion funnel bifurcates based on whether a prospect is looking for an individual subscription or one for a large agency.
When prospects sign-up, travel42 will then ask what agency and what consortia they belong to, and if travel42 already has someone from that organization, they’ll let the prospect know s/he needs to talk to in order to get approved.
Conversion Tactics
Travel42 requires an email registration in order to view any of the departments on its navigation bar, which is a good practice for acquiring email addresses. However, the site doesn’t present a notification of this unique feature, and therefore, a new visitor may think the site is dead since clicking on the navigation bar when not logged in simply refreshes the homepage. This needs to be rectified (see our Analysis below).
Also, the site has no “Subscribe” button in the nav bar, although the homepage does feature a prominent display ad for the site’s 7-day trial.
“We find that education is key to get agents to purchase, so we offer a 7-day free trial, and we do two educational Webcasts weekly,” says Cintorino. The Webcasts are 30-60 minutes and basically serve as a live demo of the site. Prospects can register to scheduled demos, and the registration form asks for qualifying information that is then integrated with Salesforce.
The site tested requiring a credit card at trial sign-up, but found it deterred sign-ups too much, so stopped. Currently, the site has a trial-to-paid conversion rate of 7% to 10%.
Trial takers’ information is directly integrated into Salesforce, after which travel42 staff will call to ask how the trial is going. Some are converted over the phone, while others opt to become paying subscribers via the site. Trial-takers will also receive pop-up/overlay notifications towards the end of their trial. They are not sent email reminders. “We send them enough emails,” Cintorino says.
Cintorino says the site used to test the length of the trial, anywhere from 7 to 30 days, but found that almost all users convert towards the end of the trial, no matter the duration, with no significant difference in numbers. Therefore, the site opted for the shortest trial duration it tested of seven days.
In addition to the webcast/demo, prospects can sign up for scheduled basic and advanced tips for using the site, as well as a tutorial.
Payment is processed via credit cards or wire transfers.
Retention Tactics
Travel42 has a renewal rate around 87%, and all of its credit card users are on auto-renewal.
Its training and tutorials, in addition to being great conversion tools, are also good for retention, says Cintorino. Since the product is meant to be embedded in a travel agent’s workflow, “getting them to use it fully is best retention tactic.”
About Tom Cintorino
Tom Cintorino ran sales and marketing for VC-funded high-tech start-ups, and then got into media in the 1990s when all media companies were launching Internet divisions. “I ended up in subscription probably because it’s a lot more analytical and I’m a lot more analytical.”
His advice to other subscription publishers is to follow your customers’ passions. “That was the key to me before we launched travel42; there was a core part of the content that they were passionate about, and that’s how I knew there was something to invest in and protect and we could build travel and services around it. If you’re just a nice-to-have, they’re going to find it for free.”
Vendors & Technology
Travel42 manages its hosting in-house, and built its CMS system.
Payment processing — Zuora
http://www.zuora.com/
Email management — ExactTarget
http://www.exacttarget.com/
Web design & development — Decision Council for design, along with in-house developers; 365 Media for helping us build data
http://decisioncounsel.com/
http://www.365media.com/
Webinars & Demos — GoToWebinar
http://www.gotomeeting.com/online/webinar
CRM — Salesforce
http://www.salesforce.com/
Analytics — Omniture
http://www.adobe.com/solutions/digital-marketing.html
Consultants — InfoCommerce Group when entering new features into the market. “If we’re puzzled, we use Russell and Megan.”
http://infocommercegroup.com/
Insider Analysis
Northstar Media didn’t just leverage its existing databases to create a new one, but rather, its customizable reports add value to its underlying data. We think this is the true genius of travel42. We also like how travel42 has relied more on travel consortia for acquisitions than SEO or other trendy digital marketing tactics. We especially like the site’s insightful understanding of the difference between B2C and B2B content; sometimes, dry and sterile is just what your audience wants. Plus, we love that they’re looking to balance the use of Web technology and freelancers to populate their database; as we learned at DataContent this year, successful database businesses often combine automation with human analysts to get the most robust data and content to its audience.
The biggest area for improvement for travel42 is their conversion funnel. First, their homepage needs to be fixed so that visitors who click on the navigation bar departments are cued to register with an email address instead of just getting a refreshed homepage. Second, there should be a “Subscribe” button in the navigation bar, or just above it. Third, the site’s pricing needs to be presented in a friendlier format that makes the terms easy to digest and understand. After making it clear this is a subscription site, the site may want to re-test requiring credit cards during trial sign-ups; while it may drop initial sign-ups, it would likely increase their conversion rate from trial to paid. Also, they should consider sending email notifications after the trial has expired to prospects who have not converted. Lastly, the site may want to check out our recent video on 10 Proven Tactics to Sell More Group Subscriptions to see what tips may improve their site license sales.
