Thirteen years ago, the Financial Times faced a significant hurdle: invisibility. During the INMA Media Subscriptions Summit on Thursday, Caspar De Bono, managing director B2B at The Financial Times, explained the media company had many corporate subscribers, but didn’t have what it truly needed for growth: a direct relationship with its corporate readers.
“We were invisible because they purchased and received our product from someone else,” De Bono said. “We did not have a direct relationship with [our readers] so we struggled to understand how we were valuable.”
FT isn’t alone. The company along with Schibsted, Aftenposten, and Insider, and Nikkei shared their B2B journeys with INMA members.
Financial Times (UK)
By adjusting its strategy, the FT grew from a subscriber base of 250,000 to its current numbers, where 625,000 people have access to FT paid for by their organisation. To overcome its invisibility, FT invested resources to learn where it could add value — and what was important to readers. It focused on renewals rather than acquiring new customers, which has proved to be a successful strategy.
“We’ve grown a business from our existing customers before we add new customers,” he said. “On average, our business of existing customers grows by 4% a year.” That growth occurs even with them factoring in any losses or cancellations.
“In other words, our value renewal rates are 104%.”
The success of the strategy has led to a compound annual growth rate of 25% in FT’s B2B segment. De Bono attributes its customer-first practice to helping drive that growth.
Although Schibsted has been in the B2B market for years, it increased its focus over the past two to three years.
“B2B has a huge uncovered potential,” said Siri Holdstad Johannessen, head of sales and marketing at Schibsted. “This is also the case for the potential B2B user revenue market at Aftenposten and Schibsted. As the media industry goes through a digital transformation … so does the market.”
Both B2C and B2B print markets have decreased, although the loss is felt more deeply when a B2B print customer is lost: “If you have a big company suddenly wanting to stop subscribing to 100 or several hundred print subscriptions, that will definitely have an effect.”
Based on this changing market, Schibsted looked at the potential for growth within its existing subscription base. Out of 20,000 B2B customers, only 0.2% have more than 30 subscribers, and just 24% of companies had a pure digital subscription. The goal Schibsted set was to target larger companies, where 50%-70% of employees were users, and migrate to 100% digital subscriptions.
“We still have a long way to go, but this is a very obvious goal for us,” Johannessen said.
At the same time, this would allow Schibsted to lower the subscription price from an average of US$450 per year per B2B user. (B2C subscribers pay an average of US$100 per year.) The larger number of users would offset the lower costs, Johannessen said.
Insider (United States)
Insider focuses on three key objectives in partnerships, explained Katharina Neubert, director of business development at Insider:
Acquisition: Reach new audiences and acquire benefits that drive sales or upsells.
Retention: Acquire benefits to encourage subscribers to keep their subscription, and benefits that encourage churners to re-subscribe.
Cash: Get fresh revenue through subscriptions, advertising, and syndication deals.
Insider joined the American Express benefits programme to offer members a free subscription to Insider.
“Cardmembers enjoy free benefits,” Neubert explained. “They can claim a free six- or 12-month subscription. It’s a substantial offer in our opinion.”
It’s also a win for American Express, as they can offer a valuable benefit to their card members at virtually no cost.
“We are able to reach a new audience that we think is of high value to us,” she said. “It also enables us to grow our subscriber base, as they are all on an auto-renewal.”
Though 144-year-old Japanese media company Nikkei has amassed 750,000 total paid subscriptions for its digital edition Nikkei.com, it only launched its B2B-focused Enterprise strategy in 2017. There is plenty of room to grow in the B2B space, according to Yosuke Suzuki, the company’s lead of digital business development.
“Although our consumer business has grown steadily, B2B sales still account for less than 10% of total revenue,” he said.
Nikkei is hoping to grow that ratio, aiming to hit 30%-40% of total revenue from its B2B offering in the future. The company does face some client challenges to reaching this goal. Each company has an average of only 1.4 accounts, so increasing the number of accounts per client could pay off. Suzuki added that while awareness of the consumer brand is strong, that is not true of Enterprise products.
“We need to focus on increasing the awareness of our B2B product,” he said.