What’s the difference in consumer behaviour when it comes to repeating transactions in a repeat transaction business versus a premium subscription business?

In my experience, in a successful premium news subscription business, most members, once acquired, are likely to be retained by default, and they must choose to churn. In other words, once convinced of the value of the publisher’s products, most subscribers are apparently locked in. In most situations, they want to continue unless they are very disappointed about the core promise of the programme.

To churn, they need to be sufficiently disappointed so that they gather the motivation to even attempt a cancellation.

In other words, by designing effective customer communications to showcase value, improving the reading experience of your products, and simplifying discovery of relevant content, it is likely your members will find it hard to gather the motivation to take time out to initiate the cancellation process.

This is the case if you can lower the motivation to discontinue, or you assist your users with integrating your products into their lifestyle.

In addition, even when users try to cancel, you can launch smart off-boarding interventions to resolve their concerns or incentivise continuation with the membership programme. Even when they want to initiate cancellation, you still have another chance to keep them with you! That’s why subscription thrives on strong retention rates and high lifetime revenue for each subscriber onboarded.

A different business model

Let’s compare this with non-recurring and a purely transactions-based business model. In India, where I am based, both recurring and non-recurring memberships are fairly common.

In a transaction model for media products that rely on micro-payments or non-recurring membership fees, the decision to buy again requires another round of convincing, regardless of the user’s past experience. In practice, most non-recurring subscription buyers are most likely to churn by default and then must be won back after a gap period from their last expiry date.

Each “buy” decision could be a similarly long and costly process, like a fresh acquisition, as the reader has consumed your service one time and needs fresh motivation to act again to visit your platform, log in, and make a fresh payment.

Because there is no scope of auto-debiting payment cards, in this process of repeating transactions/purchases from the same users, personal circumstances and lack of urgency can result in readers delaying their renewals. So, even when the motivation to continue is decent, any number of reasons may prevent readers from being able to renew within a reasonable timeframe after their previous membership has expired.

Gaps in renewals

This may lead to long gaps between successive renewals. During these gaps, readers may be lost to alternative options and competitors, impacting revenue captured every month per user.

That’s why the recurring subscription model has worked out better for news media publishers; retention is a top priority for this model’s success.

With that context, I want to share an introduction to managing customer lifecycles to optimise revenue, boost engagement habits, and increase perceived value of membership that can effectively reduce the motivation to churn.

Key steps to managing the customer lifecycle post-purchase subscription or membership

1. Onboarding, benefits discovery, and feeding the confirmation bias

This is when you must help new subscribers discover the wide range of benefits. Use text copy in a customer-centric language that helps them realise value. Also, use visuals and create workflows to unlock those benefits in an experiential manner.

A great benefit of the unlocking experience is that it leaves a lasting impression and feeds further into the confirmation bias of the subscriber, who wants to be proven right in making this investment of purchasing your membership.

2. Capturing first-party data

When the user has finished the purchase journey and unlocked the valuable benefits, there is a sense of completion and accomplishment. Leverage this moment to capture profiling information (first-party data), which is pure gold.

It is at this stage you can ask for hard-to-acquire information, such as the reason for signing up, expectations, job profile, investment portfolio details, industry and company type, topic preferences, preferred communication channels, and preferred times of outreach. You can even help them set up a call with your user experience research team. Always give the user an option to skip these prompts to read their articles at all points of time.

Most readers usually think of these prompts as a one-time investment in setting up their membership so their experience can be personalised. In my experience, a lot of users love giving this feedback and appreciate the publisher asking deeper questions to better understand their choices.

3. Activation of sticky habits

Identify sticky habits by observing statistically relevant patterns and activities that your past high-performing groups have engaged in, which correlates with more frequent visits. For example, you might be looking for users who have signed up for multiple newsletters or those who provide a phone number to get portfolio-specific stock alerts.

Build subtle, unobtrusive, and contextually relevant nudges to get readers to causally sign up for each of these habit-forming actions. These investments compound over time and can create relevant triggers for subscribers to repeatedly come back for more.

The activation process prepares users to engage. If they don’t find time, relevant triggers they invested in will help them get back on track. Additionally, timely activation of benefits boosts perceived value gained from the programme. This has a direct impact on reducing cancellations and increasing the chances of winning back readers even if they churn.

4. Invest in lifecycle engagement marketing

Identify signals of declining engagement at a user level and launch re-engagement campaigns, alerts services, and personalised newsletters on their preferred channels and at high engagement times of the day.

Get users to sign up for more relevant newsletters, WhatsApp or online communities, or other outreach channels where you can keep them connected with your brand and updated on the stuff that matters most to them. Share well-summarised briefs, alerts, or short videos personalised to their preferences (which were captured during the onboarding phase).

Help readers expand the breadth of content they read as this will widen their focus areas and help them discover more relevant stories on your platform. It will consequently derive more value, thereby lowering risk of churn at a later date.

Also, design your product experience and content formats across devices as per the user’s context. Users may not always have full focus, sufficient time, or the mental energy to consume the long-form, standard text-only stories.

Our goal should be to impart value in alignment with the user’s unique time and focus challenges, and within the context the user operates and consumes the content. The right format for different contexts is highly desirable.

5. Anti-churn, renewals, and resurrection initiatives

Toward the last 30% of the membership cycle, identify users with a higher risk of churn and consider doing one or more of the following:

• Take feedback and set up calls with a sample of these users.
• Start driving incentivised early renewal campaigns.
• Offer upgrades and cross-grades to drive higher perceived value and commitment.
• Offer extensions to those who haven’t engaged or derived significant value from your product for most of their membership.
• Trigger anti-churn or offboarding initiatives for those wanting to cancel.

Once the reader has expired or canceled, try running innovative win-back or extension offers by offering customised plans and pricing. Focus your campaigns on hitting the objections of readers that led them to churn.

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