How More Nuanced Subscription Management Yields Customer Growth
In pursuit of revenue growth, the move to a subscription model has been inevitable for media businesses. For many publishers, the first inclination is to adopt a paywall strategy that gives readers access to a limited number of articles for free, after which they are charged a fee per article.
In its simplest form, the paywall model optimizes for clicks, but not customer experience. To better serve users and monetize the paywall strategy, more media companies today are developing and experimenting with sophisticated subscription-based programs that offer flexible options, tiered content, and — most importantly — frequent promotions and price testing to understand the impact of specific offers on acquisition and price sensitivity.
One of the unintended consequences of shifting to the subscription model is the flip in company culture that many publishing companies experience by having to focus on writing for the reader, as opposed to optimizing for clicks. This shift is fundamental in the media industry where clickbait headlines hidden behind paywalls add to the noise, making it harder to send readers the signal that publishers care about the quality of content. Offering flexible plans under a subscription model means publishers must focus on producing content that brings readers back for a longer term relationship.
There are numerous ways publishers can use the subscription model as a growth lever and the ability to experiment with these strategies is dependent on how they use their subscription management technology to its advantage. Approaches that are increasingly receiving wider adoption from publishers include:
Testing Pricing Models to Attract New Readers
Offering free articles is a great way to attract more readers and convert them to committed subscribers. But when it comes to chargeable content, publishers may determine that a specific premium plan though popular, might not be generating enough revenue, prompting a price increase. Traditionally, in this scenario, price changes can quickly become problematic if the publisher can’t accurately measure or predict its impact on revenue growth and churn. Subscription management and billing solutions provide the analytics tools needed to quickly make these assessments. In addition, subscription management can help publishers avoid technical billing challenges brought on by the price changes by enabling customized billing for new readers, as well as grandfathering existing readers on older pricing versions.
Tailoring Different Subscription Plans
Discounts are powerful tools to experiment with growth. Tapping into reader profiles, publishers can identify the sweet spot for different plan segments and for example enable a first, complimentary tier offering a limited number of articles, followed by paid segment plans that are based on past reader behavior and user preferences. Manually modifying these discounts and payment options on the backend can be a cumbersome process, especially when applied across multiple billing cycles. Billing technologies within subscription management platforms allow publishers to quickly and easily test different promotional campaigns and drive optimal results, without spending resources on manually coding requirements.
Retaining Readers by Understanding Them
To achieve insights on how price changes and shifts in reader behavior are reflected in growth metrics such as recurring revenue, customer acquisition costs and churn, publishers must be able to easily harness data from their billing systems, and these insights need to be accessible across all teams, from finance to sales and content. In the subscription model, billing and subscription management solutions become central data sources for this kind of revenue-driving information and behavioral insight including churn rates, plan adoption and monthly recurring revenue.
The way people consume media continues to evolve, and it is incumbent upon publishers that they keep up with these changes. As readers become increasingly wary of data privacy infringements and abuses, ad-based models offering unlimited consumption are not sustainable and moving to flexible subscription models is vital for sustainability and growth. The shift to subscriptions will most importantly help publishers focus resources on high-quality content which help build brand, retention and loyalty.
Krish Subramanian is a successful example of a software engineer turned entrepreneur. Starting out in his hometown Chennai in India, he co-founded Chargebee in 2011. Now with offices in San Francisco, California, Subramanian has helped lead the Chargebee team towards international expansion, serving more than 8,000 customers. Chargebee's SaaS solution empowers global businesses to manage subscriptions at scale, while creating a customer-first experience that helps boost growth. Follow Chargebee at @chargebee.