As online publishers have shifted from a purely advertising-based business model to models which incorporate subscriptions, much of their attention has gone towards acquisition. This, of course, makes sense: without subscribers there is no additional revenue stream beyond advertising.
However, subscriber acquisition is only half the battle. While building a subscriber base is essential, so too is maintaining it.
Because turnover — subscriber churn — happens slowly but steadily, it can sometimes be difficult to see its impact in the moment. But if you take a step back, it becomes apparent how vitally important it is.
An in-depth study by The Lenfest Institute of 500 organizations found that over the span of a year, publishers with the highest churn (10th percentile) will end up with half as many subscribers as those with the lowest churn (90th percentile).
In other words, understanding how churn works and making adjustments to mitigate it can have a tremendous impact on the bottom line.
So, what are the key things to recognize about churn? Which tactics are most effective in reducing it?
Here's what publishers need to know.
1. Churn is normal, but its rate varies significantly among publishers
The first thing to understand is that churn is normal. Things happen in people's lives — financial circumstances change, interests shift, etc. — and it is natural for some share of your audience to unsubscribe each month.
The goal, then, is not to eliminate churn but reduce it.
What is an acceptable level of churn? The rate varies widely based on a variety of factors, including publisher size and content type, so it's usually more helpful to focus on lowering your rate rather than hitting a set target.
That said, The Lenfest Institute study found the monthly retention rate is 97% for the publishers who control churn best (3% churn), 94.4% for those in the middle (5.6% churn), and 89.6% for those at the bottom (10.4% churn).
These differences may seem relatively slight, but again if you extend them out over a long period of time they result in massively bigger or smaller subscriber bases.
2. The likelihood that a subscriber will leave decreases over time
Another key aspect of churn is that it isn't steady: there are particular times in a subscriber’s lifecycle when he/she is more and less likely to leave.
Specifically, it is far more likely that an individual will churn soon after subscribing.
How likely? A study of the audience behaviors of Die Welt, a German newspaper, found that half of new subscribers unsubscribed within the first three months.
Conversely, after that initial period churn slowed significantly. For Die Welt, churn dropped to between 1% and 2% for subscribers who lasted past three months.
The chance of churn lessening the longer an individual stays subscribed appears to be industry-wide, and appears to increase over time. As the author of the report told Digiday: once a subscriber has stayed for a year, they're very likely to stay longer.
3. Price matters, but the best anti-churn tactic is creating value
So, how do you reduce churn?
The most likely approach would be to adjust pricing. The Lenfest Institute study found validity to this: there is some link between the cost of a subscription and the rate of churn.
However, the correlation is relatively weak and there is a huge variance among publishers. In fact, high-price publishers who effectively manage turnover have a lower churn rate than low-price publishers who do not.
If price isn't the key to managing churn then what is?
The study found the strongest correlation is between churn and engagement: the publishers who have the most engaged audiences are the ones that tend to have the lowest churn.
The link between high engagement and low churn is why it's so essential to understand audience needs and to identify key topics of interest (by using tools such as our NativeAI platform).
Subscriber Engagement could take several forms - the initial decision to subscribe is already a vote of confidence by the reader in the value you deliver, but sustained utility can be in the form of targeted newsletters (WSJ, NYT, FT etc. have over 50 different newsletters that subscribers can choose from), personalized news feeds in apps / web interfaces, journalist-reader conversations in video, email or other forms to make them a part of the news discovery process.
Put simply: If you create products and content subscribers find value in, then they'll continue to pay.
4. Churn can also be lessened by showing subscribers your appreciation
There are other ways to lessen churn beyond making price adjustments and developing engaging experiences.
One key method is to say thank you. The Washington Post does this by sending people an email on their one-year subscription anniversary. The message recaps the most popular stories during their subscription period, says thanks for being a subscriber, and offers a small discount for extending the subscription.
Other organizations have experimented with offering subscribers physical gifts (stickers, tote bags, etc.), digital gifts (content downloads, etc.), and experiences (access to online forums, live events, etc).
Often what matters isn't the thing itself or the wording of the message but the gesture: simply showing subscribers that your appreciate their continued support can go a very long way.
5. Remember: an unsubscriber isn't necessarily lost forever
Finally, it's important to remember that unsubscribing is not a permanent state: often someone who has left will come back.
Often, unsubscribers can be enticed back to subscribing through return offers and repeated messaging.
Along different lines, MittMedia, a Swedish publisher, found that it was seeing high churn in October through April, every year, because it had a passionate audience for ice hockey content and the sport was out of season during that time. So, the organization did something counterintuitive: it made it easier to unsubscribe and resubscribe.
The move worked: the publisher doubled its daily active user base within a year and saw a spike in return subscribers.
This highlights that churn should be thought of fluid rather than static: what matters is the wider picture of how the subscriber base is faring over time. So, in addition to the absolute churn rate, publishers should also pay attention to a host of other signals such as satisfaction and engagement quality.
A metric in particular that's valuable to watch is tenure. As media analyst Thomas Baekdal puts it: "The key metric for churn isn’t the percentage of people who churn, because everyone churns at some point, but instead to their tenure as a subscriber. When people churn, did they stick with you for longer than, say, a year ago?"
An effective churn strategy takes these sorts of nuances into account. Ultimately, building and maintaining a subscriber base involves not only reducing turnover through effective pricing strategies and content/product development, but also understanding the ebbs and flows of churn, tending to existing subscribers, re-engaging lapsed subscribers, and measuring success using the right metrics.
Read more in our Analytics for Paywalls & Digital Subscriptions Series:
Featured image credits: Marcel Oosterwijk