Thirteen years ago, The Financial Times faced a significant hurdle: invisibility. 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,” said Caspar De Bono, managing director B2B at The Financial Times. “We did not have a direct relationship with [our readers] so we struggled to understand how we were valuable.”
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 proved to be a successful strategy.
“We’ve grown a business from our existing customers before we add new customers,” De Bono 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%.”
Putting the customer first
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. With its customer-first strategy, FT offers:
Multi-platform rights. Prior to 2008, FT licensed its content to news aggregators, allowing them to package it with other content on their various platforms. While it was convenient for the customer, it prevented FT from knowing its readers and what they valued, De Bono said. Rather than completely abandoning the aggregator model, FT created the multi-platform model, allowing customers to purchase access rights directly from FT, but use it on multiple platforms. “Now our customers pay once to access FT across 60 media platforms,” De Bono said.
Engagement-based pricing. The traditional business subscription model is based on what content the publisher makes available, not how widespread the consumption of that content is. FT upended that model by crafting a structure that factored in such things as the size/type of organisation and the level of demand for FT content. It also implemented measurement of value across the two ways it sold subscriptions: B2B and B2C. That led to pricing based on usage, and FT learned that customers who read nine articles or more per month were likely to renew. “We used this to provide a value-based approach to pricing,” De Bono said, explaining that FT created a model in which corporate customers only pay for readers who consume nine or more articles. “Anyone who reads below that frequency is free.”
Investment in customer success. In addition to the customer care department, FT provides each corporate account with a dedicated customer success manager. This allows FT to learn why the company invested in subscriptions and what its objectives are. Then, FT can put together a plan to help achieve those objectives. “When we measure success based on engagement, it’s a consequence of getting other things right.”
Transparency. “We share this data with customers in real-time so they can see and manage their access.” By ensuring that customers are achieving the results they want, FT has seen the number of engaged readers grow. That, in turn, makes the business customer more likely to renew and spend money with the FT, which “helps us achieve our business objectives as well.”
This case study appeared in the INMA report The Growing Promise of B2B in Media's Reader Revenue Model.