SUBSCRIBER CHURN
How To Cut-Down Subscriber Churn
To replace the lost revenue when an existing user unsubscribes, you’ll have to spend money on marketing your services to a new client, which could take months, and cost 4-5 times more than keeping that existing subscriber happy!
With that in mind, it’s unsurprising that maintaining a low churn rate is one of the best ways to grow a healthy digital publishing business.
In this article, we’ll share the two main causes of voluntary customer churn and dive into some examples of how digital publishers were able to tackle them and keep subscribers for the long term.
The Two Main Causes of Customer Churn
A customer may decide to unsubscribe for a variety of reasons, some of which may not be in your control, but two of the most common (and avoidable) causes are listed below:
Pricing and offers
The problem:
According to our research report with Digiday, fifty-one percent of publishers have three or fewer paid products, and 1-in-5 publishers do not offer paid products at different prices. Limited product choice at fixed price points often leads to potential customers falling through the gaps and current subscribers looking elsewhere. Readers may decide that your content is too expensive, not relevant or no longer valuable to them. When publishers don’t provide alternative products or prices, it lessens their ability to align customer value with their content offering and results in missed conversion opportunities and costly churn.
Not all your subscribers are created equal, meaning one pricing strategy or offer will not fit all. To counter price and product/market fit reasons for churn, you’ll need to ensure the ability to meet the value expectations of subscribers and provide products that fulfil a genuine need.
The solution:
When you segment your audiences into behavior, preferences, and demographics, you can begin targeting those different segments with unique offers that will pique their interest.
Subscription experience platforms enable you to study subscriber activity, gain insight into the content they’re engaging with, and determine whether they have specific interests that you can match with relevant product packages. For example, suppose you know your subscriber is a C-suite professional and regularly reads political news. In that case, you could offer a package for political content or offer premium packages at a slightly higher price point because you know they’re likely to have a higher expendable income.
FIPP used a similar strategy with Zephr’s paywall solutions to test their pricing, using A/B testing to experiment with two different price points for different geographical regions and display different payment plans and options according to location. Zephr’s drag-and-drop features allowed FIPP to split their audiences and test pricing options to see which works best, taking the guesswork out of their pricing strategy. This resulted in their total subscriptions doubling just 10 days after launch.
As well as trying to tailor products and price points to better cater to audiences, understanding what value-added services you can provide will go a long way to make your products more enticing. For example, offering exclusive access to a podcast series or premium customer support for the highest paying customers can increase the value perception of your packages. While you might see a marginal increase in operating costs with additional add-on offerings, you’ll see an exponential increase in brand loyalty and reduced churn for the long run as offers become more appealing.
User experience
The problem:
Subscribers who read your content at least ten times a month are 50% less likely to churn. Therefore, it becomes imperative to keep your readers coming back for more. To keep users engaged, you not only need to personalize offers and price points, but also the content produced and recommended. Often, users unsubscribe because they feel they aren’t being offered content that matches their needs or preferences.
More tailored ads, article recommendations, and personalized content that matches a user’s interests will give audiences a superior experience with your brand.
The solution:
By leveraging zero and first-party data, you can maximize subscriber retention by personalizing every step of the subscriber journey. Take Zuora’s client SCI for example, who improved their data collection and identity management, which enabled greater personalization and quicker onboarding of customers through their sales teams.
As a result, SCI have seen their subscriber revenue retention rate reach over 100%, which MD John Owen Waller sees as a direct result of their ability to offer deeper, more personalized subscription offerings.
It’s clear then, that publishers should aim to gain insight into the content a subscriber is engaging with at every step, automatically segment users based on common characteristics, and create a hyper-personalized user experience that keeps subscribers interested by ensuring they only see content they’re likely to engage with.
What to Track When Monitoring Churn
Subscriber churn doesn’t just happen out of nowhere. There’s usually an event that triggers the need to analyze churn for a particular subscriber. For example, you might see a gradual dip in user activity on your site, or a reduction in the number of marketing emails they open.
Whatever the situation, the best cure for churn is prevention!
With a subscription experience platform, you can track real-time user engagement and intervene at the right time should a customer seem like they’re losing interest.
As well as tracking any deviations in a user’s normal engagement, you’ll also be able to monitor when a user’s subscription is about to expire and build reminders and re-engagement campaigns around that too. For example, if a customer comes to your site and you know their subscription expires in 2 months, show them a ‘renew now and get a discount’ message or a reminder email of their usage of your service over the previous year.
What Next?
To accurately predict future churn, digital publishers must learn from existing data. One way is to leverage propensity modelling. Take a look at the behaviors of previous subscribers and compare them to those of new ones. Future behaviour can then be predicted because groups with similar propensity scores mimic one another. If new readers share the same behavioral patterns and characteristic backgrounds as past ones, they are likely to act in the same way.
Through this method, digital publishers can predict exactly when they need to act to mitigate churn risk.
Utilizing a multi-pronged churn mitigation strategy that focuses on maximizing user experience, offering tailored products, and predicting user behavior is crucial to leveraging your existing subscription base.
Keep Customers For Life
4 Types of Data Publishers Should Be Making the Most Of
Not all types of data hold the same value, and publishers who can set the right priorities and goals with the right types of data will be in a better position to strengthen both relationships with their readers and their revenue streams.
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