Quick Overview
From its roots as a classic B2B trade publisher, RISI has grown through mergers and acquisitions into a diversified information services provider for the forest products industry. Insider spoke with Matt Graves, SVP Pulp & Paper Division, and Thom Smith, Director of Marketing, to learn how the company combines direct marketing with a corporate sales force to step up customers from $300-$400 online news subscriptions to $50,000+ corporate site licenses for a portfolio of services. Read on to see how they use free trials as the top of the funnel, and how email marketing generates both online conversions and leads for the sales team.
Company Snapshot
Founded: 1985
No. of employees: 150
Business model: Hybrid (subscriptions, ad sales, one-off product sales, events sponsorship and ticket sales)
Annual revenues: ~$20 million (2009 est.)
Monthly unique visitors: 55,000+
Headquarters: Bedford, MA
Parent company: United Business Media
http://www.risiinfo.com
Target Audience
RISI’s primary market is professionals working for pulp and paper producers. Secondary markets include suppliers to the pulp and paper companies; purchasers of pulp and paper products (such as consumer packaged goods companies); and financial companies that invest in the forest products sector.
Content Model
RISI produces more than 180 information products, including the print publication PPI Magazine (controlled circ. of 33,000), six global events, subscription online news services, industry information databases, cost-benchmarking software, economic forecasts, and mill intelligence reports.
The sprawling menu grew from the company’s history of mergers and acquisitions. Each new addition brought new products and the staff to produce them, such as journalists, economists, analysts, engineers and consultants.
To keep it all organized, the company arranges its products according to five major sectors of the forest products industry: Pulp and paper, timber, wood products, tissue, and nonwovens. Customers within each sector choose from a range of products that increase in complexity and price, such as:
– Blogs and free email newsletters
– Premium online news and pricing information services, such as Pulp & Paper Week, which feature breaking news updates, daily or weekly newsletters, and access to historic data/archives
– Economic analysis and supply/demand forecasting services, including printed reports, corporate site-licenses to online forecast data, and monthly outlook reports
– Mill intelligence databases, such as the Lockwood-Post Directory of Pulp and Paper mills, and cost-benchmarking analysis software called Analytical Cornerstone
The broad range of products makes RISI the largest publisher in the forest products industry, but it also has a downside. “We have so many publications with different names that people aren’t sure what we have and what to ask for,” says Smith.
Revenue Streams
The company has four major revenue streams, the largest of which is online subscriptions.
#1. Online subscriptions
The lowest-priced subscription products are the online news services, which cost about $250-$500 annually. Pricing information subscriptions cost between $1,300-$3,500 annually. Online access to economic forecast and mill intelligence databases start in the hundreds and can run to $6,000 or more annually.
All subscriptions are annual and are not autorenewals. That’s because many customers are handled by an account representative, and in some cases an autorenewal might interfere with a rep’s ability to develop a custom upsell and cross-sell plan for each client.
The vast majority of single-user subscriptions, such as those to the online news services, are sold through the RISI website. Most site licenses and high-end subscription products are sold through the company’s sales force (see Marketing Tactics, below).
#2. Advertising
RISI offers print ads, online display ads, sponsored search results, email newsletter ads, webinar sponsorships and a whitepaper library.
#3. One-off report sales
The company’s economists, researches and consultants also produce special reports and other one-off products that customers can buy through the online store. Products range from a $95 map of pulp and paper mills in Asia to a $9,500 printed report on China’s wood products market.
#4. Real-world events
RISI sells tickets, sponsorships and booths to its six annual real-world events, hosted in the Americas, Asia and Europe.
Marketing Tactics
RISI uses a hybrid sales/marketing model that combines direct marketing for lower-cost products with a field sales organization to upsell and cross-sell higher priced products and site licenses. Here are some of the key tactics they use:
Free trials
RISI has 5-10 free trial programs running at any given time, such as the 14-day free trials to its online news subscriptions. Those trials generate “a huge volume” of prospects to fill the company’s marketing pipeline, says Graves.
The marketing team uses free content, such as blog posts and magazine articles, to attract traffic to the website. They also attract search traffic by publishing keyword-rich headlines and the first sentence or two of premium news service stories on the homepage.
Visitors that land on the site see free trials promoted through buttons on the homepage and in barriers beneath the first paragraph of premium articles. Trials typically achieve a 2.5%-3.5% conversion rate to paying customers, and trial members that don’t convert are kept in the marketing database for additional outreach.
Database segmentation
Trial takers and customers that purchase products online must fill out a registration form that asks for details about their company’s primary sector and role — e.g., pulp and paper producer or end-user. The marketing team uses that information to put each name into a specific segment for future campaigns.
The team also uses their web analytics system to track registered users’ on-site behavior, examining the types of articles they read and the frequency of their visits to determine their particular interests.
Email marketing for cross-sales and upsales
Email marketing has been the team’s most effective tool for getting news service subscribers and non-converting trial takers to buy other products, says Smith.
For example, they might pull a segment of the database that’s likely to be interested in Asia pulp and paper markets based on their registration form or subsequent reading activity. Then, they’ll send an email offer for the next product tier, such an Asia pulp and paper pricing news service. Likewise, subscribers to the pricing services might be sent a promotion for the economic forecasting reports, or the mill cost-benchmarking service.
Sales team to close larger deals
When the team finds a customer that has purchased multiple products, or identifies multiple subscribers from within one company, they pass the information over to the sales team to further develop the account.
The marketing team also uses monthly lead-generation email campaigns to set up demos and meetings for the sales team. For example, they might use data from the company’s cost-benchmarking software to create a whitepaper about the impact of rising oil prices on pulp and paper production. At the end of the whitepaper, they’ll include a call-to-action that invites customers to request a demonstration of how different scenarios might affect their market. Those leads are then sent to the sales team for follow-up.
“We step them up at every point we can,” says Graves. “I have seen it in my own eyes: A company’s entire business relationship with us was one $387 subscription to a news service, and in a period of six months they became a $60,000 corporate subscriber to all of our services.”
But Graves and Smith admit that creating this marketing and sales funnel wasn’t easy. There was tension between the sales and marketing teams in the early days of the merger. Sales thought direct marketing was “mumbo jumbo,” and the marketers thought the sales group was unsophisticated and didn’t understand marketing. It took a few years to strike a balance between the two.
Technology and Vendors Used
The site runs on a custom content management system and uses its own developers and analysts to create and manage the information databases and cost-benchmarking software.
Adobe Online Marketing Suite Powered by Omniture: The web analytics tool the team uses to analyze subscriber behavior for marketing planning
http://www.omniture.com/en/
About Matt Graves and Thom Smith
Graves joined the company that would become RISI in 1999, when he was hired as a marketing copywriter for Miller Freeman’s pulp and paper trade publications. In that position, he became one of the earliest online subscription marketers (PPI Magazine had a sub site as early as 1997), and helped manage the company’s online information portfolio through a rebranding as Paperloop.com, the merger with economic analysis firm RISI, and subsequent acquisitions. “We had those old-school direct marketing skills, but had taken steps forward into future,” he says.
Thom Smith came to RISI two years ago from the Baltimore Sun, where he had developed new interactive advertising products for the paper’s website. He was working for RISI’s marketing services team until Graves tapped him to create a more rigorous marketing organization for the pulp and paper division. “A lot of this growth kind of happened organically and there was not a whole lot of process around it,” says Smith. “Now it’s about really honing our internal processes.”
Subscription Site Insider’s Analysis
RISI should inspire other trade publishers looking to expand and adapt their models for the digital age. The company has a well-established path to step up subscribers from free newsletters to premium subscriptions and, ultimately, four- and five-figure specialty products. They’ve got a great system for using customer profiling, database segmentation, and targeted marketing to convert some customers online, while feeding qualified leads to the sales team.
But we wish the company had done a better job selecting its brand name during the M&A process. Choosing an acronym — especially one representing generic words like Resource Information Systems Inc. — does the brand a disservice. It conveys nothing of the industry or the company’s products, and doesn’t speak to customers in any way. We also agree with Smith that the marketing funnel could be refined. We’d encourage the team to test automated email campaigns customized to users’ registration profiles (rather than manually segmenting and sending campaigns). They also could develop a more formal lead scoring program to track users’ profile information and online activity and identify prospects that are ready for the sales team.
