In the rush to build sustainable business models, many publishers are turning to paywalls, some of them with great success.
And on an internet long averse to paywalls, there’s never been a better time for paid subscription products. Not only are audiences are more willing to pay for digital contentthan ever, publishers are also better equipped to convert that audience. First-party datahas made it possible for publishers like the Wall Street Journal to build personalized paywalls that maximize conversions by adapting to their visitors.
But a publisher’s work isn’t done once a reader pays up. Digiday has declared 2018 the year of retention, noting that publishers focused on building subscription audiences must necessarily shift their focus to publishing’s “next big challenge:” keeping those subscribers.
Retention is certainly important. After all, it’s less costly to retain a current paying subscriber than convert a new one—four or five times cheaper, in fact—but what does successful paid subscriber retention look like?
While all publishers have different approaches to converting and retaining their premium subscribers, several factors have stood out across audiences as indicators of likely subscription retention. Among these indicators are traffic source, engagement, and types of content consumed.
1. Traffic Source: Newsletter subscribers are more likely to remain premium subscribers.
Newsletters are well-known among publishers for their ability to convert paid subscribers:
- Elizabeth Goodridge, the New York Times’ editorial director of newsletters, recently noted a “direct correlation between newsletter readership and digital subscriptions.” Previously, the Times reported that their site visitors are twice as likely to become paid subscribers if they subscribe to a newsletter first.
- Seattle Times readers who visit their site from an email newsletter are 25 times more likely to subscribe than visitors from Facebook.
- A model built by Condé Nast’s data science team determined that the number one factor in whether a visitor would become a paying subscriber was whether they subscribed to a newsletter.
Bottom line, more newsletter subscribers means more paying subscribers. But newsletters aren’t just good for the initial conversion. Visitors who come to your site from newsletters also tend to show increased retention.
According to Peter Doucette, the Boston Globe’s chief consumer revenue officer, a visitor who comes to their site “by being a newsletter subscriber has 7% better retention than non-newsletter subscribers.”
Doucette continues: “The power of the email address, the power of the known user, is 10 times compared to an anonymous user,” which is why the Globe has also found email to be their largest driver of users with the highest lifetime value.
Why are email subscribers so important, and why are they more likely to keep paying? For one, they tend to engage with your content more.
2. Engagement: Engaged readers will keep paying.
Creating quality content is important, but for quality to translate into paying subscribers, you have to make sure your audience is continually reminded of the value of this content. This relies on getting people back to your site to engage with your content.
How often a reader returns to the New York Times site is “an important signal in determining whether they will subscribe,” which is likely why they’ve found a “direct correlation between newsletter readership and digital subscriptions.” Newsletters are great for engaging your audience, but they’re also important for making sure audiences stay engaged (definitely more so than social media), which increases your chances of subscriber renewal.
Part of the power of newsletters lies with their ability to replicate the habit-forming qualities of print newspapers. With regular delivery of newsletters to the inbox, newsletters work their way into reader routines, ensuring that subscribers make a habit of engaging with your content. Establishing a regular reading habit decreases the risk of subscriber churn.
In fact, changes in these habits can signal that you’re at risk of losing a paying subscriber:
“In terms of retention models, the changes in how people are behaving send warning flags they could churn. For instance, someone who goes from reading eight to five articles a day is at a higher risk than someone reading once a week.”
Even if a subscriber is on the verge of churning, publishers can count on email to effectively re-engage at-risk subscribers, increasing the odds they renew. For instance, after Canada’s Globe and Mail identified their subscribers with the highest propensity to churn, they started sending lapsed subscribers re-engagement emails. This reduced churn by 140 percent. Additionally emailing subscribers who hadn’t logged in for 30 days reduced churn by 27 percent.
Publishers have also noted the role that apps play a role in sustaining engagement. Strategic use of push notifications gives publishers an avenue to engage audiences directly and immediately. Fortunately, you don’t necessarily need an app to engage (and re-engage) your audience through push; you might also find similar success with browser push notifications.
3. Type of Content Consumed: Diverse reading habits lead to increased retention.
New York Magazine has found that breadth of content consumption, or the number of verticals an individual user reads, is an indicator of their propensity to subscribe in the first place. For publishers with content across multiple categories or verticals, diverse content consumption might also indicate your chances of customer retention.
Some publishers can attribute recent spikes in subscribers to an increased interest in political content, but audiences who turn to a specific publisher for a diverse array of content may stick around longer. In other words, “publishers are probably better off if they have someone reading 50 political articles and 50 sports articles than they are with a reader who consumes 125 political articles.”
If you’ve received an uptick in subscribers from momentary interest in a particular topic, you may be able to hold onto these subscribers after their interest fades if you can grab their attention with articles about another topic. As the Reuters Institute has found, content discovery is another area where newsletters shine. The more types of content a subscriber takes interest in, the more value that subscriber might see in subscribing (and staying subscribed) to your content.
By cross-promoting content across your newsletters, you might lead newsletter subscribers to discover new content, perhaps content they didn’t know they wanted until they saw it. That way, not only will you engage subscribers with more diverse content, each additional newsletter signup gives you another opportunity to engage readers in the inbox. And we all know how good newsletters are at driving engagement.
The “single largest contributor” to improved paid subscriber retention
What do all of these indicators have in common? For one, email. According to Hearst Connecticut Media Group’s director of audience development Kerry Turner:
“Implementing a robust engagement and acquisition email marketing program has been the single largest contributor to our improved subscriber retention.”
In a changing publishing space, publishers are faced with an ever-growing list of goals: growing audiences, driving engagement, converting subscribers, retaining subscribers, and building email programs. Fortunately, many of those goals tend to go hand-in-hand.