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Do you know when new subscribers cross the “Retention Point?”

By Greg Piechota

INMA

Oxford, United Kingdom

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Find a moment in the subscribers’ journey in which they fall in love and get them there faster,” recommended Robert Skrob, an author of “The Retention Point.”

Skrob spoke at the INMA Digital Subscriber Retention Master Class in April. He explained: “The Retention Point is when your subscriber decides that he wants to be a member of your tribe, that he’s engaged and he’s going to do what it takes to succeed.”

In practice, said Skrob, the Retention Point is a threshold of engagement or a key action, such as a customisation of experience, that correlates with retention.

In the book, Skrob claimed: “When you move beyond focusing on getting new members to instead measuring and focusing on getting new members to the Retention Point, your subscription numbers can triple, grow by a factor of five and even more.”

He used an example of Netflix and their “hooked episode.”

How Netflix knows you are hooked

In 2015, Netflix analysed streaming data across the inaugural seasons of the then most popular shows in 16 countries, looking for signals that pointed to when viewers became hooked. 

To its surprise, Netflix discovered no one was ever hooked on the series pilot. For example, “House of Cards” required three episodes, after which 70% of viewers on board stayed for the rest of the season. And “Mad Men” required six. 

This finding led Netflix to break with the TV traditions and release entire seasons of shows all at once.

In general, the core metric for Netflix is subscriber retention, and it is highly correlated with the number of viewing hours per subscriber.

In her interview for “Data Scientists at Work,” Netflix Vice President Data and Insights Caitlin Smallwood explained that the biggest impact on business is when Netflix gets people who are streaming only three hours a month to stream four hours, then when it gets people who are already streaming 30 hours to stream 31 hours.

The charts Smallwood shared at an academic conference suggest the thresholds Netflix looked at were 10 and 20 viewing hours during 28 days of membership.

Would you cry if I died?

The idea of the Retention Point should be familiar to subscription product managers. In popular literature, such as “Hacking Growth,” it is called the “aha moment.”

“This is the moment,” explained Sean Ellis, “that the utility of the product really clicks for the users, when the users really get the core value — what the product is for, why they need it, and what benefit they derive from using it.”

For example, Twitter struggled to sustain growth in its early days until it learned that users who quickly started following at least 30 other users were much more engaged and likely to continue using the service.

Ellis and other authors recommend two-step process to establish the aha moment:

  • Surveys with users aimed at checking whether the product has a market fit, with questions like “How disappointed would you be if this product no longer existed tomorrow?” and “What is the primary benefit that you have received?”

  • Analysis of data aimed at common patterns of behaviours correlated with retention, for example, “What do retaining users do in your product?” and “Is there anything that the retaining users do NOT do?”

Your “aha moment” will be the threshold of engagement that most of your retaining subscribers met or the action that most did.

What would it be in the news industry? 

See you this week at the INMA World Congress

If you want to get an update on the state of data and media subscriptions, join the INMA World Congress of News Media on May 6-27. Agenda includes leaders from Axel Springer, Bloomberg, Folha de S. Paulo, Singapore Press Holdings, Schibsted, and Torstar, and the faculty from Harvard and Wharton. I will dive into digital subscriptions as part of the World Congress on Thursday, May 20 (full agenda here). Register here.

This newsletter is a public face of a revenue and media subscriptions initiative by INMA, outlined here. Subscribe here. 

About Greg Piechota

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