You Can Sell Anything Once, But How Do You Keep Readers Paying for Content?
Though the UK’s vote to exit the EU and the election of Donald Trump may have roiled the British and American public, both have been great for subscription sales. Stories of the readership surge caused by the Trump Bump and the Brexit Bounce are legend among audience development professionals.
Everyone knows, except maybe the president, that The New York Times gained more than 250,000 subscribers in the quarter after his election. The UK’s own Times newspaper doubled its subscription sales over the weekend of the EU referendum by opening access to deep-dive Brexit pieces like: Life after Brexit: what happens next.
In 2018, the turmoil continues, and the danger is that disruption has become the new normal. The need to buy trusted information, the impulse to resist, or signal support, with a partisan media subscription seems much less acute than it did two years ago.
So what can `publishers do to keep the converts they won in those early, cloudy days of disruption? And more generally, what can consumer and B2B publishers do to keep the paying customers they’ve captured in their recent push into paid content?
It’s Cheaper to Keep Old Readers than Find New Ones
It’s no secret that there are two parts to building a significant subscription business. The first is to convince people to pay for what you’re selling. The second, and arguably most important, is to keep them paying. What people don’t always remember is that keeping readers is way more cost effective that finding and converting new ones.
Speaking at WAN-IFRA’s Digital Media Europe 2018 event, head of product for the Financial Times, Gadi Lahav, said, “Our data, and data from all over the world, show that it is four to five times cheaper to retain an existing user than to acquire a new one.”
The FT, nurturing ambitions of 1 million subscribers, sees retention as the key to growth, with their metrics highlighting a 70% chance of re-selling existing customers compared with 20% or less for converting new customer.
For Lahav, the secret to keeping customers paying is habit. And in its drive for retention, the FT has turned “habit” into a KPI using a formula based on measuring Recency, Frequency, and Volume (RFV). A subscriber accessing a good amount of paid content everyday will have a high RFV. Infrequent access of low volumes of paid content represent a low RFV.
“If your RFV is high, it's likely you're going to stay with us for longer, and you're going to maintain your subscription," explains Lahav. “If your RFV is very low, most likely we're going to lose you very soon,”
The underlying logic is simple: People stop paying for things they don’t use.
How to Develop Habits
While retention is no more an exact science than conversion, the FT’s RFV equations demonstrates that, if your subscribers come to your content regularly, you have a better chance of keeping them.
For some publishers, the big driver for regular usage and retention is email newsletters. The power of newsletters to maintain regular, direct contact and the potential for personalization make the Internet’s oldest communication format a popular and effective renewal tool. INMA reports that Boston Globe subscribers who come from newsletters have a 7% better retention rate and digital subscribers who go on to sign up for one of the paper’s 30+ newsletters are 5% more likely to renew.
Apps can also play a part in increasing engagement, with notifications grabbing attention and personalization deepening relevance. Upgrading its app for paying subscribers, The Economist was focused on boosting renewals through improved engagement. “People who engage with digital products are more likely to re-engage with their subscription,” the Economist’s head of product Denise Law said at the time of the app relaunch.
And as I noted last month in relation to paid content conversions, data is your friend. Just as information captured about your prospects behaviors can be exploited to reel them in, usage data can also be used to drive renewals through targeted messaging and personalised offers.
German newspaper Die Welt predicts customer’s propensity to renew around 25 metrics. Like the FT, these include how regularly people visit the site, but also time spent, how many times they visited before subscribing and their content preferences.
The Four P’s of Retention
I’m not one for cutesy memory aids, but the temptation to list these key elements of subscriber retention as “The four P’s” was simply overwhelming. With apologies, here they are:
Just as low-cost trials or charter discounts can be used to draw people into paying for content, discounting can be used to keep them. When I tried to cancel my New York Times digital subscription a couple of months ago, the online operator made me an offer I couldn’t’ refuse and renewed me at 50% of the regular international price.
At the end of a recent Monday Note excoriating the service provided to subscribers by a majority of publishers, Frederic Filloux identified the biggest mistake made by publishers as their belief that the presumed uniqueness of their content warrants a lifetime of customer loyalty. “In thinking this, they choose to ignore the current benchmarks of digital services: intuitively, customers expect nothing less than what they get with Amazon or Netflix.”
Beyond the content initially offered, retention efforts increasingly introduce added extras to make subscribers feel special enough to stay. Bonus content has become ubiquitous, but insider access is increasingly seen as a renewals driver. Slack groups give subscribers to The Information a sense of belonging. Teleconferences give New York Times subscribers the sense that they are in the room with the people making the content that they are paying for. VIP lounges at industry events make DigiDay members feel, well, important.
Every effort to combat churn will fail without content that delivers on the promises made during the initial subscription sale – fail to deliver on expectations and renewals will tank.
That means paywall publishers need to be ready to invest in content creation. Bob Sauerberg told the American Magazine Media Conference in New York in February: “Creating really great premium content that consumers will pay for is very expensive, hard and time-consuming.” That was after Conde Nast prepared the way for Vanity Fair’s paywall with a 22% traffic hike in 2017 driven by big-name hires and an emphasis on original reporting.
Delivering quality content at the right price, an engaging user experience, and a sense of community is a good starting point for customer retention. Fresh from the race for scale on social platforms, publishers are accustomed to seeking out new audiences. The work has started to convert them to paying customers, but very quickly retention will become publishing’s next big challenge.
Peter Houston runs Flipping Pages Media, an independent consultancy and training firm, helping publishers build multi-platform success. He has run Guardian Masterclasses, spoken at Google’s ThinkPublishing and was formerly Editor-at-large for The Media Briefing. He now co-hosts the Media Voices Podcast, delivering a weekly take on the media news and guest interviews with senior players at a leading media organizations, from Facebook to Nieman Lab, The Economist to CNN.