Tomas Bella of Dennik N could not believe the numbers: “The more someone is paying, the less she is reading!”
Bella is a co-founder and head of digital at the 5-year-old Slovakian news start-up with 50,000 subscribers. Dennik N is participating in the INMA-supported GNI Subscriptions Lab, receiving guidance from FT Strategies, a consulting arm of the Financial Times.
Last week, Slovaks finished an in-depth analysis of the Dennik N subscriber base, comparing behaviours and preferences of readers paying €4.99 per month for the Mini product (the good), €6.99 for the Standard product (the better), and €8,99 for Klub N membership (the best).
While common wisdom suggests usage indicates willingness to pay for online news, the best customers of Dennik N actually read less than others.
- Subscribers to Mini and Standard products visited the Web site 10 times a month, on average.
- Members of Klub N visited just seven times a month.
Why? “Probably those paying more are simply richer and have less time for reading. They just want to support us and not to spend their days on our site,” hypothesises Tomas Bella.
The insight from data is supported by the results of a survey, in which Dennik N asked its most valuable subscribers for the reasons they had chosen Klub N.
- “I want to support Dennik N” was the most frequent answer — 69% subscribers chose it.
- Klub N members enjoyed also a privilege to unlock premium articles to anybody and an ad-free user experience on the Web site.
The findings have a strategic significance
To maximise profits, the news media compant has been trying to upgrade low-tier subscribers to the higher-priced tier by driving their engagement, as well as developing new features and editorial products such as a print monthly magazine.
Bella: “Readers told us: ‘We don’t really care about your features. We just want to send you money because we value what you do.’”
The biggest lesson here? The Slovak plans to stress the “support journalism” aspect more in the communication rather than previously planned benefits-driven messages.
Bella also urges publishers to study their subscribers and stay open-minded: “Don’t focus on features only in your surveys. Ask about emotions your brand and work create. Some people buy pragmatically access to news for €5, but some other prefer to pay double that to feel happy they supported our mission.”
Are weathlier people less concerned about price and more about time?
The relationship between money, effort, and time is a bit more complex than a simple trade-off, academic researchers find.
It’s indeed well established in economics literature that consumers' costs include not just the price of products or services (monetary cost) but also non-monetary costs such as the effort and time:
- For example, subscribers are required to identify and select products and services (search costs).
- Required to order and receive products and services (purchase costs).
- Required to use and dispose of products and services (usage costs).
On the individual level, people might value money or effort or time more, if they have less of it. So, in the case of Dennik N, wealthier readers might be less concerned about the price and more about the time and effort required by the service.
In my book with Professor Thales Teixeira, Unlocking the Customer Value Chain, we describe an experiment an e-commerce showing more sensitive consumers were willing to put more effort and time to find discounted products on a shopping site, while less price sensitive were happy to buy products at full rate.
Having said that, the research shows also both low-income and wealthy people suffer from shortage of time, and across societies and cultures the most constrained ones are working parents (by the way, they are found to be the least happy people worldwide).
People value money, time, and effort differently. In general, it is found that time is more valuable than money.
- Examples: People view spending time as more reflective of who they are than spending money.
- In the research of the non-profit world, it is found that people view donations of time more moral and self-expressive than donations of money.
- In the consumer world, people like products more when they think about the time they have spent with that product versus the money they have spent.
What does it all mean to Dennik N and its problem?
While the lower usage of the product might be caused by shortage of time, it may also be caused by other things.
For example, readers might feel spending time with Dennik N is less valuable than alternatives, meaning the product doesn’t meet their needs:
- Be it cognitive (they need different information).
- Affectional (reading doesn’t give them pleasure or they get bored).
- Or social (they miss social connections or interacting with other people).
Perhaps Dennik N might consider interviewing these members to understand their motivations better.
The idea to emphasise the intrinsic value of support to higher ideals in offers might be a good one in itself. The research on happiness might inspire some other benefits of the news value proposition worth promoting or at least testing:
- Help others: Giving makes people happy. The New York Times found thousands of readers happy to sponsor access to a million students. The membership strategy of The Guardian is built on an idea that members support journalism, so all get access, including those who cannot afford it.
- Experiences: In general, the psychological research suggests people are happier when they buy experiences rather than material possessions. What about events, contributions, etc.?
- Time: In transportation people often pay extra to get somewhere faster, skip lines, etc. Can we imagine products that help save time the time-pressed readers? A special morning executive briefing newsletter? A weekly briefing?
Banner image courtesy of Tyler Franta on Unsplash.