When Nikkei introduced digital subscriptions in 2010, it became the first newspaper in Japan to do so. The publication — which covers business and academic news — has grown its subscriber base each year, and in 2019 it introduced a one-month free trial on both its iOS and Android app. 

While that helped boost subscriptions further, it also saw a high number of cancellations. That led the company to start paying more attention to customer engagement and retention, Mio Kataoka, product manager at Nikkei, told attendees of the recent INMA Asia/Pacific News Media Summit.

As it looked at who was engaging with the app and where it was losing subscribers, it discovered the highest level of churn came from readers in their 20s, with the second-highest level of churn belonging to those in their 30s.

“We can acquire a lot of new young readers, but at the same time we also lose them,” Kataoka said. “Therefore we wondered how to retain our young readers.”

While users in their 40s and 50s are familiar with the Nikkei brand, younger users are less likely to recognise it, Kataoka said. “It has been difficult to let them know our brand and value recently because of a lot of direct and indirect competitors. Therefore, we needed to attract people who have not yet visited our Web site and get them interested in Nikkei.”

Reaching a younger audience

To do that, Nikkei launched two podcast channels on the Japanese audio platform Voicy: Nagara Nikkei and Young Nikkei.

“The concept of Nagara Nikkei is you can input today’s main news topics for only 10 minutes while doing some other activities,” Kataoka said. “This channel has 400,000 followers on Voicy, and in addition, Nikkei started delivering the same content on Apple, Spotify, Amazon, and Google last year.”

Young Nikkei, which as the name implies is designed for young listeners, has 80,000 weekly active users.

“The aim of this channel is to let young audiences know at least one news topic that they should follow,” she explained, adding that Nikkei chooses what news to feature based on the number of saved articles by digital subscribers under the age of 30.

Prioritising SEO has also improved the subscriber journey: “The maximum traffic to our Web site is from search engines, and most of that is from Google search,” she said. “So to increase traffic from Google search, we have implemented some practices.”

First, it created SEO guidelines to make it easy for the newsroom to write SEO-friendly headlines. This includes such practices as using the full name of a person (“Elon Musk,” not “Musk”), including at least one trending word and limiting the length of the headline to 28 characters.

“I think that one of the easiest and most effective ways for SEO is to work with the newsroom,” Kataoka said.

Additionally, Nikkei reduced the number of free articles users could unlock before needing to subscribe. It had previously allowed readers to access 10 free articles, but after experimenting with different numbers discovered that the conversion rate to subscribers was highest when they were allowed to unlock just one paid news article. When it reduced the number of free stories from 10 to one, the conversion rate from free registered users improved by 20%.

Improving engagement

In addition to attracting younger users, Nikkei wanted to improve the engagement level and reduce churn, as there’s a direct correlation between low engagement levels and churn. It divided subscribers into four groups based on how many visits they made to the Web site or app and how many articles they read each week: light, middle, loyal, and super loyal.

“We found that light users come to our Web site only one day a week and read only one news article on average,” Kataoka said. “So these metrics make it clear that we need to pay more attention to light users so that we can take measures to decrease their total churn rate.”

To engage light and middle users, it invited customers to its office and “asked a lot of questions,” Kataoka said.

“Through these interviews, we found that young light users, especially people who’ve never read newspapers up to now, are struggling to understand business and economic news. The reason for this is that they do not have knowledge of the background of news stories.”

That led Nikkei to launch Think! in 2020. Think! is a feature in which external experts post commentaries on each news article in their field of expertise. Data shows the people who read these commentaries are more likely to engage with articles on the Web site or mobile app.

“Though it’s usually hard to improve light users’ engagement level, this practice has worked well so far,” she said. 

Using data to evaluate subscriptions

That engagement is vital to creating ongoing subscriptions, and Sawa Norihiko, principal research engineer at Nikkei, explained how the company evaluates its subscription business and determines the financial value of product enhancement.

Measuring the total lifetime value (LTV) of a customer is important because it shows the future state of the business, Norihiko said: “For a subscription business approaching maturity, improving the churn rates is critical to business growth.”

In a subscription model, he added, churn rate plays a substantial role in the business’s future. The challenge is to be able to calculate the actual business value of product and tech teams in a project.

“It's quite easy to see how the KPIs and marketing and promotion impact lifetime value,” he said. “Everyone understands that new acquisitions are important, but it is quite difficult to see how the KPIs of product and tech contribute to lifetime value.”

To crack that code, Nikkei uses a customer engagement score based on frequency and volume to estimate the uplift in revenue from specific product enhancements. Based on the engagement score, it can group subscribers and see what products are effective in retaining and engaging users.

“One of the main objectives of product enhancements is to prevent cancellations,” Norihiko said. “But the data for measuring it typically have a long lead time. Using the engagement score, however, we can assess impacts in a much shorter period of time.”

An increase in the engagement score is a sign that it is successfully preventing cancellations and also shows that customer loyalty is improving.

“By this method, Nikkei’s product team is able to calculate the business impact of each product enhancement by considering the adoption rates among all subscribers, the frequency of visits, and the uplift in the volume of articles read.”

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