Finding the right price for a subscription product requires a two-pronged approach: understanding the criteria that make it a “good price” (for readers and for you), and presenting it in the best possible way to your audience.
At Paris 2024 edition of The Audiencers’ Festival, Lou Grasser, Chief Digital Operation Officer at Le Monde, presented their pricing strategy and the numerous tests they’ve run to perfectly balance the two essentials above.
First things first, a little context on Le Monde
In 2024, subscriptions accounted for 50% of Le Monde’s revenues – 70% of which come from digital subscriptions alone. But with the Le Monde Group announcing a profitable year, how can an increase in the newspaper’s subscriptions be justified and accepted?
This was the question posed by a subscriber during a live chat – a question that Le Monde had not yet taken the time to answer. An opportunity for Lou Grasser to explain that the price increase is the result of a complicated economic context, but above all that this choice is the culmination of a long period of testing.
Indeed, on its digital offering, the publication’s subscription went from €18 per month in 2019, to €9.90, finally settling €12.99.
So how did Le Monde decide to change its rates and cut its monthly digital subscription by almost €10?
- By hiring a data analyst specialized in pricing strategy, first as a consultant, then on a full-time basis.
- By agreeing to carry out tests, and to do this work over the long term (to this day).
- By building and training a predictive model that would enable us to predict the pricing models that would generate the most sales over the long term. The predictive model built for Le Monde has a 3-year forecasting capacity, with no significant disruption.
- By setting one or two precise KPIs to measure the success of their tests: for Le Monde, they chose to monitor the evolution of the average price and the marginal cost of their offers.
- By trying to understand real usage so as to better respond to it: for example, fraud with account sharing or offers that don’t work at all.
- By accepting that pricing isn’t everything, and that it’s essential to work on the offers presentation page on your site and application to explain and enhance them.
Le Monde’s 10 lessons learned from changing subscription rates
1 – While acquiring at a low cost and increasing prices incrementally may bring in more subscribers at the time, it’s not profitable in the long term. The new €9.99 tiers, for example, ended up cannibalizing the €15 subscriptions and lowering overall sales.
2 – Changing offers may have an impact on the recruitment of new subscribers, which may be less than expected. But the key is to maintain the retention of existing subscribers.
3 – Rate increases are carried out in a series of tests over several months. At the Festival, Lou Grasser shared an example of a test on a €1 and €2 increase on two subscriber groups (totaling 10,000 subscribers). The timetable detailed an initial test with an increase announcement in December, and analysis of the results three months later. The actual increases took place in May, 6 months after the start of the tests.
4 – By studying average revenue per user, Le Monde realized that in the long term, offering only a monthly subscription was much more attractive than offering a choice between a monthly and an annual offer. So they decided to discontinue their yearly subscription.
5 – Aggressive promotions work much better for retention than for acquisition. In February 2023, Le Monde decided to follow the example of the New York Times by launching a €5/month offer. The result: the test was stopped after 2 months, as it did not generate enough new recruits to have a real impact on sales in the short term.
6 – Customer service can be a real ally in preventing churn. The teams realized that to convince subscribers to stay, customer service was directly proposing a €5 discount offer: this worked, but lost the value of the initial offer. By working on a new approach, Le Monde succeeded in increasing its retention rate by up to 50%. (Lou Grasser confirms that with online cancellation, the process is now less straightforward).
7 – “Show rather than tell”: this is the new motto for teams working on the famous PPO (meaning “Offer Presentation Page”). It’s sometimes more convincing to show the advantages of offers via sliders than to make lists. After modification, the click-through rate is slightly higher on desktop and the conversion rate better on mobile.
8 – By forcing Le Monde to list all subscription offers and their advantages, they realized that exhaustiveness is counter-productive. In reality, those on desktop only saw the first 4 advantages, and only 2 on mobile. Lou Grasser confessed that one of their major projects was to better summarize the advantages.
9 – The least promoted offers are sometimes the most clicked. Le Monde realized that its offers dedicated to students and teachers, though advantageous and appreciated, were not sufficiently promoted. Despite this, they were clicked on 7 times more than the others.
10 – Understand the impact of subscription partnerships, as Le Monde does with Google’s “Subscribe with Google” feature. By subscribing with Google, readers benefits from a 50% reduction, an offer that now represents around 30% of new subscribers. But in the end, the publisher has found much better retention on its regular offers.
As a final bonus, Lou Grasser tells us about 3 other projects they’re currently working on to address subscription issues:
1 – Fine-tune their offer increases to improve retention
2 – Tailor subscription offers to location, with adapted pricing
3 – Diversify international payment methods, especially for French-speaking African countries
