NativeAI

Making Paywalls Work: 4 Effective ways to reduce Subscriber Churn

By NativeAI / April 3, 2019

As digital publishers well know, acquiring subscribers is only half the battle won: after that comes the hard work of keeping audiences paying.

A study by The Lenfest Institute found the median customer retention rate for publishers' paid online products is 50% after 12 months. In other words, half of new subscribers stop subscribing within a year.

Of course, subscriber churn is nothing new; it's a problem that newspaper and magazine publishers have always grappled with.

Unfortunately, the shift to online distribution has not lessened the challenge: According to a publisher survey conducted by the International News Media Association (INMA), some 46% of organizations say digital subscriber churn is higher than print subscriber churn — with 19% saying it is much higher.

The importance of reducing turnover is so great that savvy organizations are now putting it on par with, or ahead of, subscriber acquisition. In a recap of its annual subscription summit, the INMA noted: "Reducing churn was a rampant topic. Strategically, next-generation publishers suggested that their next stage of growth likely will come from smarter retention and engagement efforts more than harder sales efforts."

So, if churn is so important, what can be done to reduce it? After surveying its members and conducting a number of case studies, the INMA highlighted these four key strategies that are working for publishers:

  • Start With the Right Subscribers at the Right Price

The survey found one of the most effective strategies for reducing churn is to simply start with the right subscribers at the right price.

As the INMA researchers put it:

  1. Acquire the right customer in the right target segment in the first instance.
  2. Don’t acquire on discounts and expect [subscribers] to stay.

This makes sense. After all, individuals who are not a good fit for your content and who are only subscribed because of temporary incentives are unlikely to remain committed.

So, while it may be tempting to boost your subscription numbers in the short run by going after all segments and enticing immediate action with highly discounted offers, in the long run churn will be significantly less if you first do the hard work of identifying the right target groups (audience insight tools such as our NativeAI platform can help) and by starting with pricing that can sustained.

  • Make Payment Simple and Pricing Consistent

When it comes to paying for digital content from publishers, most people remain hesitant and easily dissuaded.

Given that, it's no surprise that many of the most effective anti-churn tactics concern making payments simple and providing consistent pricing.

Some of the specific recommendations from the INMA researchers include:

  1. Choose low-friction renewals.
  2. Adopt open-ended contract terms where possible and auto-pay.
  3. Don’t send out bills.
  4. Standardize all offers and eliminate customer frustration with what they have seen elsewhere.

Essentially, you want to ease skittishness and limit buyer's remorse by making subscribers deal as little as possible with payments (via low-friction renewals, auto-pay, no bills, etc.) and by ensuring that they don't see the same offering at a lower price than they are paying.

  • Consistently Engage Subscribers and Add New Benefits

The INMA report notes that one strategy is particularly effective in reducing churn: focusing on engagement.

How can this be done? By finding ways to get subscribers to consume more of your current offerings and by also developing new offerings that they find appealing. Specifically, the researchers suggest:

  1. Focus on a mixture of data and product to get subscribers to engage more.
  2. Schedule a rollout of new product features to help with retention (à la Netflix).
  3. Serve content daily to maintain contact between your brand and subscribers.

Fundamentally, this is about demonstrating and delivering value. By identifying existing content that audiences will like, rolling out new products/pieces/features, and regularly engaging, you are able to show subscribers the worth of your offerings and remain top-of-mind.

  • Have Retention Save Strategies and Empower Service Agents With Data

There will always subscribers who are unhappy and want to leave.

What's important to realize is that this dissatisfaction doesn't necessarily mean that all of these individuals are destined to unsubscribe. With a good plan and skilled customer service agents who understand subscribers' specific needs, it's possible to lessen churn even late in the game.

To do this, the INMA researchers suggest these approaches:

  1. Make customer service easily accessible and knowledgeable.
  2. Have save strategies to keep unhappy subscribers.
  3. Match these detailed save strategies to customer data.

What does this look like in action? The report cites the approach taken by Schibsted, a Scandinavian publisher. As the company's head of marketing and sales told the researchers: "The data team has made a tool so that every time a subscriber calls the service center, the subscriber will have a red or green or yellow light showing [customer service if the caller is] likely to churn or not. This is a very useful tool helping them to personalize the conversation."

Schibsted's customer service approach highlights a larger point about subscriber churn: reducing it requires an overarching strategy, coordinated internal groups, and sophisticated systems.

Content Recommendations when implemented well can be a powerful driver of loyalty as it can engage your readers, demonstrate value and relevance to their interests. Personalized recommendations delivered through widgets at the end of stories, email newsletters, push notifications etc. can boost likelihood of renewals dramatically - but make sure that you pick a content recommendation engine that  fits your needs and is not a clickbait driver.

Ultimately, increasing retention isn't about executing a single tactic but developing a comprehensive approach that integrates data, teams, and execution.

Written by NativeAI / April 3, 2019