The new industry’s traditional approach is to convert subscribers through the acquisition funnel first. Then, focus on retention efforts to minimise churn and keep subscribers buying through their customer lifetime.
But, why wait? What could we do during acquisition that would help our retention efforts post-purchase? Is it time to rethink the funnel strategy?
Typical retention strategy
Retention has always been considered part of the business model after the reader has subscribed. We focus on onboarding and engagement strategies to build habit in the new subscriber because research tells us those subscribers with high engagement are less likely to churn. The 80/20 rule tells us that 80% of our revenue comes from 20% of our customers — our most loyal customers.
There is new information coming out of INMA indicating we should focus our retention efforts on the “sleeper” or “zombie” subscribers who are paying but not engaged. Our focus needs to transition to these sleepers versus retention messaging targeting our most loyal subscribers. Greg Picheota, researcher-in-residence for INMA, says sleepers are at high risk for cancellation. He suggests publishers push content and establish communication channels with these sleepers because sleepers make up one-third of those who churn in the first three months of subscribing.
We could then associate sleepers as making up approximately 27% of that 80% who do not provide as much revenue nor are our most loyal subscribers. Why would we focus on a segment that is not our highest-paying revenue segment?
The answer lies in habit. More effort focused on retention efforts like e-mail engagement messaging, content, and onboarding messaging to these sleepers could potentially lead to a more active reading and building habit. The goal is to change these sleepers into loyal subscribers.
However, our efforts to build habits with this segment could start earlier during the acquisition model. Consider this habit-building as well as preventative retention.
Instead of placing all our retention efforts after the conversion process of the sales funnel, we should be using them in the funnel. The funnel itself is misleading. The traditional funnel model looks like gravity is helping a reader slide down the funnel into converting, but consider the funnel like a funnel of a tornado instead.
There is continuous movement, spinning in a circular motion. Awareness, interest, engagement, and conversion are all still there, but the process is different for each reader.
It may take several touchpoints before a reader connects to the digital product in a way that fills a need, and the reader then connects to the value of becoming a subscriber. Retention is part of this more complex funnel.
Let’s refer to retention as the hot air that rises into the outer layer of the funnel cloud and the acquisition model as the cold air colliding with the hot air. An updraft causes a rotation. This rotation is the reader journey to becoming a subscriber. This would be an upward funnel that is not conversion on top; however, it is a level of how engaged the reader is and the likelihood of converting.
Levels of engagement at different times of the funnel help determine likelihood to subscribe. It also indicates what level of engagement at the time of purchase will allow us to use data to keep new subscribers engaged or whether to use retention efforts in a specific manner based on level of engagement at time of purchase. The awareness, interest, and consideration pieces of the funnel are different levels of engagement.
- Awareness: low-level engagement. This is the first time on the Web site, the first time clicking an article in social media, or the first time hearing about a newspaper brand.
- Interest: mid-level engagement. This is the occasional visitor who reads a few articles and may register for more access but is not ready to commit. This is more of a discovery phase.
- Consideration: high-level engagement. Some readers are ready to convert, but others need more time and go through the awareness, interest, and consideration process several times before converting.
The big question becomes: How do we use retention tactics in this model to help post-purchase?
The answer is simple: We use similar tactics from when the reader has converted, but we move them up the customer journey to be a part of the acquisition process.
Here are a few examples of post-retention efforts and how they can be used in a pre-purchase effort:
- Build a better user experience.
- Focus on content engagement and customer relationship tactics that are personal prior to the purchase.
- Use data intelligence to understand readers and their interests for content, and identify their pain points.
- Be customer-obsessed from the start. Start with your first timers and don’t let up when they become loyal subscribers.
In customer service, representatives are trained to treat every call as a pre-retention call. That means those customers who are calling to report a delivery issue, have a question about a bill, or need to change account information are all expecting their experience to be a positive one. If not, it can lead to a drop in loyalty.
This idea is like preventative maintenance: If your vehicle has regular oil changes and tune-ups, it will last a long time. If you wait until there is a problem to see your mechanic, your car will not perform to the best of its ability.
Use preventative retention efforts to build a better user experience for readers. This includes testing loading times, ensuring check-out pages are simple and easy to use, and making sure a site’s navigation is optimised so readers can find articles of interest. When creating campaigns, make sure the links direct correctly, and the offer and terms are transparent.
People are social by nature. We connect to others on topics of interest and based on our culture, background, and experiences. Those who have subscribed expect you to get to know them, connect with them, and understand their social identity. They expect a business-to-consumer relationship where they are appreciated, recognised, understood, and not taken for granted.
Your non-subscribers are no different. Start the recognition process and begin understanding your consumer prior to purchase. Identifying their social personality through data allows you to personalise content suggestions to improve engagement. Begin the relationship by encouraging readers to subscribe to a newsletter of interest prior to becoming a subscriber.
Optimise messaging to connect them with newsletters your data suggests are highly engaging. Consider creating personalised messaging, connecting readers to reporters, and responding to all reviews and social media comments. These are ways to maintain positive relationships with subscribers and connect with readers who might purchase.
Your data insights are important at every stage of the subscription process, both pre- and post-purchase. Business strategy used to be “go with your gut.” However, data intelligence provides the necessary information to make sound business decisions. This path leads to a stronger subscriber base and a direction on how to retain it.
Determining propensity-to-buy models and basing this on reader engagement levels helps focus efforts in the acquisition process and builds reader relationships lasting long after they subscribe. Use data to understand readers’ interests, connect readers to products, and identify where in the customer journey they exit. This helps determine if there are check-out processes that don’t work properly or value statements that don’t connect and move the engagement needle.
Data is used in retention post-purchase efforts like propensity-to-churn. We look at subscriber data to find out who cancels and why with surveys and customer service call centre logs. Use that information to understand why people don’t purchase, what resonates, what they want, and what value a subscription holds. Use that data to tailor content and campaign messaging to increase engagement and move people through the funnel to a purchase.
High-quality user experiences
In all efforts, ensure readers and subscribers have positive experiences. If they don’t, non-subscribers will lose interest and subscribers will cancel. Become more innovative and try new products that surprise and delight readers. Be customer-obsessed when building better user experiences, using data intelligence, and creating relationships.
However, being obsessed requires going above and beyond the status quo. Find new ways to upsell, create new products, and fill needs readers have that may go beyond a local story. This includes tools to educate readers on all product offerings and how to use them. Many retention calls are with subscribers who don’t know what their subscriptions include or how to use all product functions. This information should be offered upfront, easily understandable, and accessible.
The goal behind preventative retention efforts in the acquisition model is to prevent the “sleeper” subscriber by building engagement and creating new habits. This should start in the customer subscription journey and continue after subscribing.
Charles Duhigg, author of the Power of Habit, explains forming habits is done through the “habit loop.” Every habit has a cue, routine, and a reward. At INMA’s Consumer Engagement Summit in November 2018, Duhigg said data insights can be used identify which articles readers access and how often. This shows us how likely a habit of reading articles will form. New habits tend to be formed in the first 100 days or not at all.
If we wait until readers subscribe to build habits through data and engagement, how well will that work in the three months “sleeper” subscribers will likely stay before they churn?
Starting earlier in the customer subscription journey offers more time to identify the rewards readers need and use data to engage them in a way that leads to those desired rewards. In turn, a new habit can be created as the reader transitions to a subscriber. Retention efforts then continue with personalised content messaging and engagement tactics that reinforce the habit loop.
Data, customer obsession, user experience, constant improvement, and product innovation are connected. We must develop relationships with readers over their lifetime as they become loyal subscribers.