The most effective retention strategy is a really good acquisition strategy. If we want to improve retention, we have to be better at acquisition. It doesn't just mean pumping up the numbers, it means looking at the customer lifetime value. Denise Warren, Former President of Digital at Tribune Publishing and former EVP of Digital at The New York Times.
As newspapers and other media publishers transition to what we at Zuora call a “modern media company”, they’re finding that their creativity needs to extend beyond their special editions. Competition no longer comes from just other publications (print and digital). They are also vying for audience attention with popular social media outlets such as Facebook, Twitter, and Snapchat — all of which feature news. And there’s always competition from television, OTT video and other news and entertainment channels.
Pricing undeniably plays a critical role in subscriber acquisition and retention. To win over new subscribers and retain existing subscribers, your pricing, offers and promotions must align with the needs and preferences of the modern consumer. The best way to cater to their pricing preferences is by giving them the freedom to pick the offer that best suits their needs.
Here are a few ways that modern media companies a.k.a. former publications are creatively using flexible pricing to acquire new subscribers:
Having flexible pricing strategies and systems will give your subscribers more ways to engage with you on an ongoing basis. Think cross-sells and upsells, and seasonal surges in demand.
The Economist has had great success with creative pricing strategies to drive acquisition. A few years ago, the publication went against the common practice of bundling digital and print assets where digital access is usually offered “free” with print subscriptions. Instead, they unbundled them and placed a “premium” on their digital content.
“The idea was to increase our renewal subscription revenue by making people opt for the print and digital package rather than the print-only package. So, instead of giving it away for free, we are actually starting to charge a premium for it” explained Subrata Mukherjee, VP of Product and Head of Business Systems at The Economist Group.
The publication increased revenue 25 percent on those willing to add digital to print. The Economist is now experimenting in various ways to bring in more people into the funnel such as presenting subscription offers to those who have ad blockers installed, special student packages, and opportunities for frequent fliers to use their air miles or other reward membership programs towards an Economist subscription.
“The only way to price a product is to understand and segment your customers. Figure out what they value. Figure out what they are willing to pay” advises Denise Warren.
As modern media companies grow their products, it becomes important to identify the price points that gets customers to latch onto your service.The trick is to identify the “just right” pricing for customers at different stages of the subscription journey.
Your best friend on this journey is data. Customer segmentation is an exercise to filter your customer data into meaningful buckets. Use it to understand what elements of your product existing and potential subscribers are willing to pay for, and then understand the different pieces of your pie that they value in relation to each other (Ex: 30% value digital access more than print).
You want to be able to test out different pricing and packaging strategies to iterate and see what’s going to be the easiest, least confusing, most attractive to customers and brings you the most revenue.
“Data, data, data – it’s all about data. That’s just the game” says Warren.
An undisputable advantage that modern media companies have over their predecessors is that the internet has allowed for immediate and live coverage of events. But people still want and value insightful reporting. But are publishers ready to acquire new subscribers when there’s an unexpected surge in demand? Most lack both systems and strategies required to maximize acquisition opportunities presented by real-time events.The key is to have flexible pricing system that scales on demand.
A great example of a publisher strategically using real-time events to drive acquisition is The Financial Times. The newspaper dropped its paywall over the Brexit weekend for all news related to the referendum, leveraged subscription analytics to test price points and offers in real time and saw a 600 percent surge in digital subscriptions sales (compared to the average weekend).
Jon Slade, Chief Commercial Officer told DigiDay “We dialed up our marketing on a real-time basis. We were looking at buying patterns, opportunities in social, and spending our marketing budgets in pretty aggressive ways in an attempt to try and dominate a story. We then made sure that didn’t conflict with the efforts of our audience engagement team, so there was constant dialogue between audience engagement and editorial, and between marketing and acquisition.”
Another modern media company embracing the opportunities presented by events is the 120-year-old Daily Racing Form. “We moved from thinking of ourselves as a 120-year-old newspaper brand to being a service that helped people play better and win more. Our audience bets on horse racing and about 85 percent of those bets go through in the last five minutes before the race goes off. If you think about that, the value of real-time data leading up to the point of action becomes incredibly important” says Todd Unger, Chief Digital Officer and Chief Marketing Officer at the Daily Racing Form.
The company had long worked as a traditional print model which closed on Wednesday for a Friday issue and then publishing those news stories online. But they realized that the value of the information increased leaps and bounds when their customers sat at the track. That led to the birth of DRF Live. “We’ve got reporters on every one of those tracks, observing the track conditions, seeing horses in the paddock, talking to trainers getting inside information. All the value of those little tidbits was going to Twitter, not to us. So, we created a very simple platform that allowed our reporters to report in real-time and create a real-time stream of information. We first offered it for free and then ended up folding it into our premium content package called DRF Plus” explains Unger.
Whatever your pricing strategies are, flexible pricing and packaging is a key component to subscription success. Your business must have the freedom to experiment with and implement creative pricing strategies. You must be able to customize, test, tweak and try again until you get it right. And then rinse, repeat and constantly update to keep pace with your reader’s ever-changing needs.
Learn more on how Zuora’s flexible pricing system is helping publishers such as The Guardian, Financial Times, and The Seattle Times evolve into modern media companies.
And download our guide on the Top 4 Imperatives for Successful D2C Subscription Businesses