This article is a translation of José's article on his blog, El Caos, with additional insights from speakers on the panel following the event.
In the pursuit of increasing subscription revenue and customer lifetime value, publishing teams are diligently working to identify subscribers who have high propensity to churn in the future. It's a challenging task, but recognizing these patterns and identifying these at-risk readers is vital for maintaining a profitable operation.
During The Audiencers' Festival in Madrid, an event dedicated to subscription models, several media professionals revealed their strategies for retaining subscribers and reducing churn.
Develop a dynamic pricing plan
We're experiencing a real surge in subscription payment models. Drawing on the savvy approach of online stores, we're starting to see some tried-and-true tactics being used, like price adaptation. With a bit of trepidation in the industry about losing readers, these ‘pricing' tactics are becoming the norm this year.
But according to panelists, the market in Spain is not quite mature enough to make sophisticated dynamic pricing strategies to improve the ARPU. Instead, pricing strategies are aimed at conversion.
For Íñigo de Juan Sainz-Planillo, Director of Subscriptions at Unidad Editorial (El Mundo, Expansión), the current industry context makes him believe that there is still room for aggressive offers and trials. There will be a time to raise the price and, in his experience, when going from aggressive offers to regular prices churn isn't as affected as it might seem.
“It's the time to grow, worrying less about profitability, that is, ARPU. The media who manages to convince a reader that they want to pay will be the market leader.”
Having said this, others in the group are increasing subscription price for loyal subscribers to obtain a greater profit margin, as has been the case of Vocento, who has increased its subscription plan by 30% in one year.
I believe that in the future the market has to evolve towards more sophisticated models, as airlines do for example, in which pricing is based on exhaustive knowledge of the user that a publisher gains through first party data. With this, dynamic pricing offers can be made based on propensity not only for conversion but also to increase ARPU. This variable pricing strategy will have to take into account not only subscription revenue, but also advertising revenue per user, as Netflix is currently doing.
Pepe Cerezo, independent consultor and moderator at The Audiencers' Festival
Offer other products such as newsletters to enhance your value proposition
Continuously reminding readers of the value of subscription is essential to brand loyalty. That's how it's always been. And one of the simplest but most effective ways to achieve this is through newsletters. At The Audiencers' Festival, everyone agreed that newsletters are an essential part of audience engagement strategies. They're a priceless tool (enjoying a new heyday as we speak) that, as simple as it may sound, helps keep the reader feeling connected to your brand.
At El Confidencial, for instance, readers who are registered for a newsletter have a 15% greater chance of renewing their subscription. According to Laura González, Director of Digital Strategy at La Vanguardia, churn is reduced by 50% when a subscriber is signed up to the newsletter, hence why the publisher has invested heavily in top-level newsletter editors such as Enric Juliana. Her product, titled “Peninsulas”, is even recycled into a variety of content formats and has proven to build subscriber loyalty.
According to data from EL PAÍS, 63% of subscribers are signed up to a newsletter which has proven to directly impact churn, reducing it by up to 22%. Premium newsletter subscribers have 29% lower churn, whilst this figure is at 15% for app users.
Whilst subscribers who sign up for one of El Confidencial's newsletters have a renewal rate that is 15% higher than those who do not receive any.
At El Confidenciel, they even remind readers of the subscription value proposition during the cancellation process. Through a series of surveys in which the reader is asked to explain the reasons for cancellation, it has been possible to retain 12% of paying readers. Depending on your propensity, a personalized offer will appear.
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Bet on quality content (which we sometimes forget)
It might seem like stating the obvious, but creating quality content truly helps in retaining readers. We might forget this simple truth from time to time, but it's been a constant since the very beginning. Just take a look at how well the regional press has capitalized on this. Román García, the digital strategy director at Prensa Ibérica, hit the nail on the head when he talked about the importance of “sparking a curiosity in the reader that boosts subscriptions.”
This editorial group, housing 26 print and digital brands, gives away news that responds to the user need of “what's happening”. However, they keep the “why” under lock and key, reserved for subscribers only. Take for instance, the news piece about Mayte, a supermarket cashier who paid for the groceries of firefighters busy extinguishing a fire. This story was published in “La Opinión de Zamora”, the sole newspaper that interviewed her.
Such stories encourage readers to subscribe as they hope to delve deeper into personal narratives and explanatory pieces that help better understand the event. Under this distribution model, the group has seen growth in their “logged in” users by up to 118% across some of their brands. “Our subscription rates soared when the need to know was at its peak.” This strategy is both admirable and worth emulating.
The subject of user needs, and finding a goal for every article (including those that are subscription or retention drivers) was a big subject in our London Festival. You can find the takeaways here.
At EL PAÍS, they've taken this a step further to offer a wider variety of content formats to add value to their product. 2023 for instance brought the launch of their subscriber-only cultural news, offering exclusive moments for a subscriber to meet those behind the newspaper, including the Director, Pepa Bueno, editorial teams and Reading Club authors. These interactions have proven to build loyalty and tighten the relationship that readers have with the brand and teams behind it.
Apply cancellation propensity models
The media is becoming proficient in employing models to accurately predict when a subscriber is on the verge of unsubscribing. This insight is absolutely vital for initiating a persuasive process to retain them. Let's be clear: preventing unsubscribes is arguably more crucial than acquiring new subscribers. Both are important, but by fostering a loyal relationship with our existing readers, we will be able to introduce other editorial products that will increase LTV.
Unidad Editorial employs a propensity model that expertly predicts the likelihood of that a subscriber will churn, implementing adapted retention strategies. According to the company's estimates, their powerful formula, which identifies both risk and reason, has impressively cut churn by 25% in a mere three months.
José A. Navas, the Head of Subscriptions for El Confidencial, affirms that their newspaper utilizes a robust cancellation propensity model, fortified with machine learning systems, that effectively minimizes cancellations.
The key, he said, is to find what actions can be used to reduce churn. In their case, forefronting the value proposition, especially during the onboarding process, and paying close attention to the first 2 weeks of a subscribers lifetime is an essential.
El País also uses its own churn propensity model, which has an accuracy of 75%. To do this, the system introduces some variables, such as a decline in content consumption by a reader, and is capable of anticipating the end of a promotional offer and analyzing possible involuntary churn, such as an expired card, to put preventative measures in place. “Being aware of this information allows us to activate a series of actions to reduce the churn rate,” added Angélica Domínguez , director of customer strategy at Prisa Noticias.
Focus effort on the middle of the conversion funnel
Who drives the lion's share of your company's income? This is the pivotal question that any publisher must address to refine its marketing strategies in an era dominated by the subscription payment model. When it comes to El Confidencial, a substantial 40% of revenue is generated by a mere 2% of its readers. It's clear where resources should be. For El Confidencial, the unswerving objective is to hone in on the immensely valuable, so-called middle of the funnel.
Simply measuring and analyzing reader behavior is the essential tactic to employ here, looking at metrics such as RFV (Recency, Frequency and Volume) that publishers such as Financial Times have been tracking for some time.
Pay attention to other types of involuntary cancellations such as card expiry
It does not always happen that a reader decides to abandon payment to a medium of their own free will. Sometimes, more than we think, technical failures occur. Among the most common is the typical situation of an expired credit card.
What can you do about it? Well, remember it! That simple and that complicated.
In the case of El Confidencial, subscribers whose card is reaching expiration are sent an email and presented with on-site messaging to help them change their payment details. According to their analysis, this measure has reduced cancellations to up to 20% and recovered up to 60% of subscribers in one month.
If you're a spanish speaker, you can find José's work on his blog, El Caos: journalism, technology, digital transformation and digital marketing consulting since 2005.
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