This article, wrapped up: - Understand & analyze the business foundations - Create a vision/goal for your business - Align the business around achieving that goal - Agree the outcomes that will ensure you achieve the goal - Hypothesize, test and optimize - Added extra: how to launch your subscription strategy without taking risks
We spoke to Alastair Lewis, founder of Quested Consulting & ex-Managing Director at Haymarket and Future PLC, on how he works with publishers to develop a successful premium product.
The key?
Build subscription as you would build any other product – like an upside down pyramid. Start with the broad business foundations, understanding your audience and aligning the company around achieving a defined goal. From there, you can get increasingly more specific, identifying the vision for this subscription product and defining the buyer persona before testing out hypotheses to find the optimal strategy.
1. Understand & analyze the business foundations
Launching any kind of product starts with building your business foundations, developing a deep understanding of your value proposition, target audience, current audience, etc, in order to make better informed choices later on in the process.
As Alastair put it, you start in a general sense as you build the audience profile for the entire business, before getting increasingly more specific, narrowing down which segment will be the target audience for your product.
- Understand content strengths, weaknesses opportunities and threats (SWOT)
- Analyze user behavior to understand your audience (Who, What, When, Where, How long etc.)
- Begin to segment your audience (Alastair recommends starting with cohorts based on level of engagement), gradually making them more specific to discover who is most likely to pay to subscribe. I.e. What kind of user is most likely to be your product target market?
2. Create a vision for your business
Launching a digital reader revenue strategy means a company-wide transformation – it's a go-big or go-home situation.
The starting point is therefore about creating a clear vision for your business as a whole, one that is now digital and establishing a reader revenue model.
For instance:
A publisher generates 70% of their revenue from print (mostly ad-based) and 30% from digital advertising spots.
However, they understand that these revenue streams are under threat and fairly unstable meaning it's difficult for their business to invest and grow sustainably. What's more, cookie laws and internet giants such as Amazon and Facebook are taking up increasingly large parts of the ad revenue potential… Ultimately, diversification is key.
The plan: establish a reader revenue stream.
But the vision needs to be more concrete than this… where do you want to be in 3 or 5 years time?
Perhaps you want to aim for 70% of your revenue to be derived from digital reader revenue within 5 years?
Importantly, this goal should be understood and put into practice across the whole company. One that the entire organization buys into, understands and uses to define how they work.
Alastair highlights that successful products are built through cross functional teams.
Bringing together teams who understand audiences differently will allow you to identify the user needs in a full circle way, bringing different perspectives to the discussion, supporting the continuous asking of “why?”.
This also engenders a collective spirit for the product, something that's owned by the whole company rather than a single team. Shared ownership in new product development, especially one such as this that requires a company-wide transformation, will prove invaluable to your strategy.
3. Identify your target audience
Identifying your target audience should be a lot deeper than simply “Middle aged, women with children”.
Instead, define 3 or 4 personas in as much detail as possible, enabling you to clearly refine the individuals that your content and products will seek to attract.
- Who are they
- What motivates them
- What are their pain points
- What are their needs and desires (professional and personal)
- What information are they looking for
Alastair mentions his work with a women's brand in India who clearly defined their persona, giving her a name, age, education, social and family life, detailing her pressures at home and work, motivations, fears, etc.
This persona wants to keep up to date with the professional world whilst juggling her family needs but, given her busy life, she doesn't have time to read long content or even search through the site for information she needs. She's interested in fitness, health and wellbeing but is also limited with time.
To further enrich this defined persona, the publisher analyzed any existing readers that match this individual, studying what she spends time reading, comes back to regularly, how often, etc.
Defining this persona or personas (Alastair recommends 3 maximum, but the more refined the better) is a hugely valuable first step that you'll be able to continuously come back to when working through the rest of the process, as well as after launching.
Most importantly, this persona will help you put your audience first from the outset, something that a successful reader revenue strategy requires.
Finally, you can define the value proposition for this product against the target persona:
Start with the target audience on the right:
- Gains: the benefits that customers expect and need from you. These should appeal to their interests and make them more likely to embrace your value proposition
- Job-to-be-done: this refers to the operational, social and emotional tasks that a client must carry out. It involves any problems they have to solve and what they hope to satisfy
- Pains: these are the difficulties and negative experiences faced by the customer when trying to get the job done
Before moving to the left side, defining your product based on the customer profile, ensuring it benefits them, helps them achieve their jobs-to-be-done and solves their pain-points.
- Gain creators: how does the product or service meet the customer's needs and how does it provide them with value?
- Pain reliever: how does the product or service solve the pain and difficulties that a customer may encounter whilst carrying out this task?
- Product or service: what is the product or service that creates value, solves problems and justifies the creation of value for the customer?
4. Hypothesize, test and optimize
With print publications, you have one final version that's sent to print, and that's it. One of the benefits of digital, however, is that you have endless testing and experimentation opportunities. If you try something out, you can analyze performance, learn from user reactions and optimize your strategy for next time.
Importantly, this ‘test, learn and iterate' mindset should be established from the get go. It's all well and good coming up with ideas for your subscription products, but the key is to test your hypotheses to validate any assumptions, not taking anything for granted.
Coming back to the Indian woman's brand, we might hypothesize that…
“We know that this persona doesn't have much time, so maybe sending out content by Whatsapp is more convenient than via a newsletter?”
We can then test this idea out…
- Ask users, such as via a pop-up (“Would you be interested in WhatsApp messages”)
- Surveys e.g. Survey Monkey
- Smoke test, a method that involves implying that you're already planning to launch with the goal of seeing user uptake (“We're launching a daily WhatsApp, are you interested? Sign up here”)
- A/B test, such as offering half of your audience Whatsapp notifications and the other half updates via email
- Focus groups – actually going out and speaking to your target audience
Some notes to bear in mind from Alastair:
- Keep testing simple, making sure the focus is on a clearly defined, specific hypothesis
- Test the areas that are the highest risk first, because you might as well deal with any potential problems at the start before you get deeper into the launching of your product
- Iron out and validate assumptions from day one to avoid wasting time and money in launching something that will need changing further down the line or that won't even work at all
- Always come back to your vision and how you're going to achieve it – Will this idea (and the results from the test) help us achieve our goal?
Examples of what not to do from Alastair:
- Don't make assumptions without testing: whether it seems to be a good idea or not, you have no way of knowing whether it's going to be successful with your audience until you test. Always ask yourself “why should we do it this way?”
- Don't miss out the audience phase: it's surprisingly common for publishers to respond to “why are we launching” with “because we have to. Our boss told us to. So we're putting up a paywall”… but who are you actually trying to convert? Who will subscribe? How do you know that your model will be a success before you know your audience and test assumptions?
Added extra: how to launch your subscription strategy without taking risks
The general trend amongst many of the publishers we speak to at Poool is that they understand the need to establish a reader revenue model and have the desire to get started, but are concerned that subscription will put their traffic, SEO and ad-revenue at risk.
Our final question for Alastair was therefore about how you can successfully launch a subscription strategy without putting other models at risk…
His first comment was that if there wasn't a risk then it wouldn't be worth doing!
However, he highlighted that the only way to mitigate risk is to test…
- Start with the riskiest factors
- Test in small batches, such as on a small percentage of your audience
- Test within your less risky segments, such as foreign audiences or volatile users
- Trial a registration model first
- Smoke test subscription by asking users who would be interested in subscribing
You'll gradually gain more confidence and a deeper understanding of what your audience wants and how you can provide it.
What's more, there are plenty of cases of publishers maintaining or even increasing ad revenue thanks to their subscription model.
Financial Times, for instance, are widely recognized as running a successful subscription business, but they also continue to monetize from advertising where revenue has actually increased thanks to the collection of first-party data and targeted advertising spots.
This balance of multiple revenue streams can only be found through testing – finding the perfect balance based on the revenue potential of each model, importance to your business and how it impacts the reader experience.
Alastair Lewis is a former Managing Director at Haymarket and Future PLC running some of the UK's best known consumer media brands including Autocar, Stuff, FourFourTwo, How It Works and What Hi-Fi? amongst others. His 20 years in media have seen him focus on International Business Development and partnerships, Content Syndication, Digital Subscriptions, E-Commerce and Affiliate revenues as well as Content, Audience and Commercial Growth.
In 2020, Alastair established Quested Consulting Ltd to help media companies, platforms and start ups diversify their revenue streams and develop their value propositions to both consumers and partners.
