Strong foundations, habit formation create basis of subscriber retention strategy

By Utkarsh Arora

The Economic Times

Noida, Uttar Pradesh, India


Media companies currently in the process of devising a new retention strategy may find this framework for attacking churn useful.

In my experience there are four distinct pillars of an effective retention strategy:

  1. Investing in strong foundations.
  2. Forming subscriber habits.
  3. Effectively managing the reader lifecycle. 
  4. Optimising acquisition for higher lifetime value.

It’s important to thoroughly understand each of these pillars, starting with building a strong foundation and forming habits.

Strong foundations

The lynchpin of a strong subscription business is deeply understanding consumer preferences. If you get this wrong — or worse, if you don’t think this is a priority for your organisation — you will believe that readers simply don’t like to pay for digital content.

Understanding your consumer preferences is key to a strong subscriber business.
Understanding your consumer preferences is key to a strong subscriber business.

In this case, the problem could be a limited understanding of which aspects of your offering influence readers to pay and ensure they are committed to your membership for the long run.

To be on top of reader preferences, it is absolutely essential to invest in data infrastructure and business intelligence as well as integrated feedback mechanisms.

Data infrastructure and business intelligence

Building features must be accompanied by in-depth data tracking for each and every user into a data lake or data warehouse. This allows data analysts to uncover segments with high rates of churn and understand the unique actions common among the high-retaining and low-retaining audiences.

Delaying this critical aspect often leads teams to focus narrowly on acquisition to meet business goals without caring much for subscribers’ long-term satisfaction. Teams often end up acquiring users who may not be a great fit for their product. At the same time, due to lack of insights, they rarely make substantial progress on personalisation, content discovery, and enhanced reading experience.

This leads to a temporary large mass of subscribers plagued with unsustainably low retention rates. Eventually, low retention rates become a blockage for growing your memberships further. Therefore, one must invest in collecting every relevant interaction across all touch points.

Integrated feedback mechanisms

Please note the words “integrated” and “mechanisms.” To describe this better, let me ask you some basic questions:

  • Are your subscribers able to share their feedback and ratings across touch points, without any hassles, whenever they love or hate something ?
  • Do you seek feedback from various cohorts of subscribers once they have read a piece of content on your Web site or apps to gauge their content experience?
  • Do you understand subscribers’ exact expectations when they signed up for your membership?
  • Do you analyse what forced different subscribers to cancel?

The key point is you need to be very close to the pulse of your subscribers. Therefore, you must identify key touch points and key moments in your subscribers’ journey where you can offer simple and intuitive ways of giving feedback in any context.

The second part of the idea is that this feedback must be made actionable. It is essential that all of your feedback is securely stored in a database, deeply integrated with the rest of the customer profile and readily accessible to your analysts. The deepest insights will emerge only when your team can connect the dots, such as by studying feedback from these survey mechanisms in association with customer profile attributes like lifetime value, engagement scores, devices, acquisition channel, and content preferences. These insights will make this feedback strongly actionable.

Subscriber habit formation

Habit formation is by far the most important step in building a high-retention subscription business. It has been proven in numerous studies that frequency of visit or active days are the most important metrics influencing churn.

Once subscribers build a habit, their preference for your brand and content grows. That acts as a barrier to exit. This leads to higher retention and makes it hard for competitors to steal your users.

In my experience, the two critical factors at play in habit formation are repeat visits and the diversity factor.

Repeat visits (number of active days)

Instead of looking at average active days per subscriber, I recommend focusing on targeting a percentage of subscribers who are above a certain “active days” threshold.

There are a few actions you can take in this area.

  • First, onboard the subscriber well. Collect their content and communication preferences. Understand their background and work profile.
  • Additionally, focus on subscriber activation. Walk them through key “sticky” actions (like swiping vertically to view the next video, commenting, sharing, or discovering categories). Expose subscribers to all promised benefits and help them unlock their features.
  • Also, don’t let subscribers sleep during their first few weeks. Otherwise, their engagement will be considerably low throughout their membership, which could adversely impact their renewal rate.

Consistent and relevant communication is also important. Keep monitoring if subscribers lose touch with your services. Automate identification of such patterns. You may want to trigger relevant communications to reengage them with the platform.

Based on subscribers’ preferences, target them with relevant content recommendations on their preferred device or channel at their convenient time slots. Use events and other value-adding services as hooks to wake up sleeping subscribers.

The key point is to identify numerous authentic reasons to communicate with subscribers at the right point of time and via the right communication channel. This will drive their frequency of use (active days).

Diversity factor

Diversity refers to a couple different things.

First, it is the variety of categories of content consumed. Please ensure your readers engage beyond just one or two categories of content. Readers who appreciate the breadth of your content offering are more likely to develop sticky habits and remain engaged.

Additionally, consider the number of devices or touch points used for consuming content. By encouraging subscribers to try various formats of delivering content (such as e-mail newsletters, WhatsApp or chat-based alerts, mobile apps, podcasts, or an e-paper), you create more space (and, hence, a higher share of time) for your product in their hectic schedule. This also translates to increased comfort levels in using your platform across a variety of situations.

These measures are some of the key ingredients for building habits and driving content consumption. This translates to higher retention rates.

About Utkarsh Arora

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