Having acquired thousands of new subscribers since the start of the pandemic, news publishers and other subscription businesses are energised to reduce churn.
A new survey of 435 subscription professionals by Brightback, a retention analytics company, showed that for 93% respondents, customer retention is just as or more important in 2020 than acquisition. Only 7% said acquisition is the priority.
- The biggest challenge is that no single department is the clear owner of the retention. For 37% companies, the sales and marketing team owns retention. For 27% businesses, especially in the software-as-a-service space, it is customer service.
- Among other challenges to improve retention, respondents cited: a lack of cohesive approaches to engage customers across departments, being unable to automate tailored outreach at the right time, a lack of predictive methods to identify who will cancel in the future, and not understanding why customers cancel.
- When faced with a customer planning to cancel, the most popular tactics among the business-to-consumer companies were: discounts, options to downgrade, personalised offers based on the reason for cancellation, bundles and cross-selling promotions, options to pause or skip payment, and consultations with the customers and on-boarding services.
News media companies, no doubt, are thankful to loyal customers who stay with them. But there is a dark side to loyalty.
“Many membership organisations cater so much to their current members that they forget to stay relevant for tomorrow’s members,” writes Robbie Kellman Baxter in her new book The Forever Transaction.
The author of the bestselling The Membership Economy dives into the pitfalls and challenges of membership businesses, such as newspapers, and religious congregations. She finds some surprisingly common patterns.
Long-time members are often engaged and vocal. They may also be increasingly influential, as they serve on advisory boards and governance roles in the non-profit sector. At the same time, employees of the membership companies often age with the customers.
“As a result, the organisation lacks a diversity of voices and continues to offer products, processes, and services aligned with the needs of the aging cohort,” writes Baxter. The downside is that these offerings are increasingly not relevant to new prospective customers.
Baxter studies the case of Amedia, Norway’s largest publisher of local news media. The company discovered one reason younger audiences weren’t subscribing and reading its titles had less to do with “Millennials don’t like news” and more with “Millennials don’t like how we’re doing news.” Most of articles were about older people, dealt with topics older people found interesting, and featured photos of older people.
“Amedia had been serving its existing subscribers so well that it was ignoring its future,” concludes Baxter, noting that Amedia used the research to refocus its editorial practices and attract a younger base of customers.
So how to stay young and fresh? Baxter offers a number of remedies.
- Ensure new customer acquisitions outnumber those that leave. A churn rate that is higher than acquisitions means your relevance is shrinking.
- Invest in onboarding your new members, as they know less about the offering and they may need guidance how to get the value quick.
- Look beyond existing customers for quantitative and qualitative studies. “Loyal fans provide the melody, but you need to harmonise with the voices of ex-customers, prospective customers, and prospects that got away”.
Robbie Kellman Baxter is a guest speaker of the INMA Webinar series today (Wednesday, April 22). Register now.