What are the benefits and risks of long trials?

By Greg Piechota


Oxford, United Kingdom


Hello! This is Readers First, a newsletter for INMA members on reader revenue innovation. I am INMA’s researcher-in-residence. E-mail me at: greg.piechota@inma.org

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PRICING: Top publishers embraced trials to speed acquisition and improve retention of subscribers

Almost half of the largest news subscription brands offered deeply discounted and extra-long trials this year, a new INMA study found.

This is based on a review of the top 50 international, national, and regional news Web sites across the world, ranked by the number of digital-only subscribers in 3Q 2021.

  • 68% or 34 of the 50 brands offered a trial in mid-February 2022.

  • Of those 68%, or 23 of the 34 brands with trials, offered the introductory prices for longer than three months.

  • Average trial length was 7.5 months, and the median was 9.25 months.

  • Short trials of up to three months were discounted at 76% on average, while the trials longer than three months were discounted at 52%.

This is another sign of a shift in news subscription pricing towards extra long and deeply discounted trials. The aims are speeding up the acquisition and easing retention to the full price.

But do long trials work? And how?

A new best practice: We first observed publishers switching from short to long trials in the United States in 2019, e.g., at The Boston Globe and The New York Times. 

This tactic has become the best kept secret of fast-growing brands during the COVID pandemic and led to outstanding results identified by the INMA Subscription Benchmarking Service.

Our new study confirmed the new tactic has become common among the world’s leading brands. For example, Bild in Germany (593,000 digital-only subscribers) adopted introductory pricing after a series of rigorous data-informed experiments. 

At the INMA Media Subscription Summit in February, Bild’s Daniel Mussinghoff described the results of testing different combinations of prices and trial lengths:

  • Baseline offer of 1-month trial: e.g., 0.99 for one month and then 4.99 per month.

  • 4-months-long trial: e.g., 4 for four months.

  • Permanent discount: e.g., 2 per month.

  • Introductory price of 50% off the first year: e.g., 3.99 per month for a year, and then 7.99 per month.

Bild evaluated the results analysing not only the impact on conversions for each cohort but also retention after the first month and 13th month. It looked at the cohort’s length of the average relationship and impact on total revenue.

According to Mussinghoff, the long and discounted trial in the end generated the highest revenue, attracting many more customers than the baseline offer and retaining them at a higher rate to the new, full price.

The conditions for the cyclone: Bild and other publishers reimagined a traditional subscription funnel, in which a publisher attracts readers to a Web site and engages them gradually, hoping this higher engagement will result in the sale.

The new approach works more like a cyclone, in which a publisher stops readers soon with a tight paywall and sells quickly with a very attractive offer. Then it engages subscribers during a long trial, aimed at retaining them to the full price at a higher rate.

Studies (e.g., by Mather Economics) showed long-time subscribers are less price sensitive than new ones. This suggests upgrading a tenured subscriber to a higher price can be easier than acquiring a new subscriber at that high price.

The cyclone model might work best for brands with established subscription programmes, such as Bild or The New York Times, which had converted the heavy users already and most new buyers are light users anyway. 

The casual readers tend to visit news sites more often during big news events, such as a pandemic outbreak, U.S. presidential elections, or a war in Ukraine. This helps explain global spikes in demand for news and subscriptions in the past three years.

To speed the acquisition, brands simplify their offers. For example, Bild slimmed down its product line from multiple packages (e.g., the pricing textbook’s suite of the “good,” “better,” or “best” offers) to just one. It got rid of all the add-ons at the acquisition stage. It offers add-ons later.

“We found that it’s best to sell with one price but retain with many,” said Mussinghoff at the INMA summit.

Previous studies (e.g., by Piano) showed lower prices lead to more conversions but may also result in lower retention, as many of the new customers are less engaged. This suggests brands need to invest in robust onboarding of new subscribers as well as value nurturing and retention programmes. The length of a trial matters: The longer the trial, the longer runway to engage the new subscribers.

In the end, to succeed, brands need to acquire many more new subscribers than with the baseline offer — to offset the risk of the higher churn and lower ARPUs.

Tactics for a price-driven industry: In general, media subscribers are highly price sensitive, academic and business researchers find.

Authors of a recent paper in the Applied Marketing Analytics journal, Natasha Fosker and Benny Cheung, described a study of 1,384 U.K. adult consumers of different subscription services — from Spotify to Netflix, from food delivery to gyms and beauty product boxes.

In general, they found price a dominant driver of choice across all subscription markets. 

They analysed in-depth the influence of different pricing tactics on purchase likelihood and Net Promoter Score as a proxy for retention.

They found permanent price reductions, free trials and initial discounts, and monthly plans that “you can cancel anytime” the biggest levers for both acquisition and retention in media services, such as Spotify and Netflix.

Interestingly, they saw loyalty and referral schemes having a positive impact, too, especially for retention. 

Fosker and Cheung have not studied news products, but perhaps their findings can inspire subscription strategists in news media.

Methodology: How did we study news subscription offers of the top 50 news subscription brands? 

We collected basic, digital-only subscription offers available to new subscribers and new visitors of their Web sites. We used VPN services to access the websites from IP addresses in the brands’ home countries and cleared cookies. 

We focused on the recommended offers (e.g., “best value”) on landing pages available under the subscribe button on home pages. We avoided offers available in the ads on home pages or in the paywall messages.

The data was collected on February 12-14, 2022, so before the start of the recent Russian invasion on Ukraine. Some brands might have adjusted their pricing since then.

CHANNEL DEVELOPMENT: New framework to help publishers manage portfolio of their e-mail newsletters

News publishers are right to expect one subscriber per 10 registered readers, a new INMA study shows. We advise also to plan e-mails to those registered and subscribed based on a map of your subscription funnel.

At the INMA Media Subscription Summit, Chris Taylor of The Telegraph in the U.K. shared the company’s North Star goal of having 10 million people registered and 1 million subscribed to the site by 2023.

We verified the relationship between the two numbers by studying the share of known and subscribed users at 50 national and regional news brands across the world. They are the participants of the INMA Subscription Benchmarking Service.

Indeed, we found brands that have more registered users also enjoy more subscribers. On average, 13% of the registered users were also subscribed. The median proportion was 8%.

This means The Telegraph’s rule of thumb is about right for news brands. Correlation though doesn’t mean causation. 

The Telegraph has 42 newsletters aimed at engaging the registered and the subscribed. What’s their impact? How should they manage such a portfolio?

The power of e-mail: Publishers love e-mail. It’s a relatively inexpensive channel — direct, mobile, social — and allows personalisation even without expensive technology, as readers self-select to e-mails of their interest.

The Telegraph’s Head of Newsletters Michelle Brister said at the INMA Subscriber Acquisition master class: “Newsletters are high engagement products, which produce best quality registrants and subscriber prospects, and the most engaged subscribers for the Telegraph.”

She quoted the results of internal studies:

  • Readers who register by signing up to a newsletter are more likely to convert to a subscriber than those registered at other touchpoints.

  • Those who sign up for multiple newsletters have significantly higher rates of conversion within their first 30 days since the registration and are more engaged on the site.

  • Registrants entering the site via newsletters are three times more likely to convert to a subscriber than those coming to the site via other referrals.

  • Subscribers derived from newsletters have 30% higher retention after three months and over 50% higher retention after 12 months than the average.

This proves that e-mail newsletters are indeed a great tool for acquisition and retention.

Managing a newsletter portfolio: The Telegraph sees three major goals for its 42 newsletters: driving traffic back to the site, engaging registrants in the inboxes, and engaging the subscribers with premium newsletters. 

Other publishers develop their own portfolio frameworks. For example, Sarah Ebner of The Financial Times told INMA members the company’s newsletters aim at increasing site visits, lead to conversion, help demonstrate value, and retain existing subscribers.

Inspired by Brister and Ebner, I developed a framework for the e-mail portfolio management based on the hypothesis that e-mails help move readers in their journeys, and this should determine the goals and metrics for each e-mail.

Start by mapping a subscriber journey. Visualise it as two engagement loops: before and after the purchase.

  • You want visitors: to register and be introduced to the news product, engage with content and form a habit, and view offers and convert to subscribers.

  • You want subscribers: to feel welcome and understand benefits, use content and features, and then retain or upgrade to add-on products.

A new e-mail framework: When your engagement model is mapped and you see what the next best actions for each stage are, you can then plan or review how newsletters fit:

  • For example, the goal of daily briefings and breaking news alerts is mostly to engage readers before and after subscribing. They should then perhaps remain free.

  • You need onboarding sequences not only for subscribers but also for registrants. It’s not obvious: In a 2020 study, I saw one-third of the top 50 news subscription brands did not offer any onboarding for the registered users. Instead of educating readers about the product’s content and features, they spammed prospects with subscription offers.

  • You should plan promotions and value-nurturing campaigns not only to registrants but also to existing subscribers, e.g., to have them see the value of subscribing and reasons to upgrade.

  • Subscriber-exclusive newsletters have a role, too: They demonstrate the value of the subscription but also drive usage — and hopefully retention.

When the goal of each e-mail is clear, it’s easy to set metrics:

  • Popularity metrics include: the list size, list’s growth rate, opt-ins, deliveries, leads for new e-mail subscribers, and cost per lead.

  • Activity metrics are: opens and open rate, click and click-through rate, opens and clicks per opt-in, clicks to opens, replies and reply rate, sessions, time and pageviews referred by e-mails, conversions to subscribers and conversion rate, cost per subscriber acquisition.

  • Loyalty metrics may be: number of different e-mails per user, proportion of subscribers signed up to any or selected e-mails, proportion of subscribers who opened or clicked any or selected e-mails, customer lifetime value of newsletter subscribers, satisfaction and advocacy scores, such as NPS.

Takeaway: E-mail is a proven subscription workhorse but still under-developed at many news media brands. My 2018 study of 698 newsletters of 128 nationwide news outlets in 33 countries found most had 10 newsletters or fewer. Map your subscription journey, and plan goals and metrics for each e-mail newsletter or sequence.

Click here to learn more and apply to the INMA Subscription Benchmarking Service.

About this newsletter

Today’s newsletter is written by Greg Piechota, researcher-In-residence at INMA. Greg leads the Readers First Initiative at INMA aimed at sharing the best practices in growing online engagement and reader revenue. 

E-mail him at greg.piechota@inma.org with thoughts, suggestions, and questions. Sign up to the Readers First Slack channel for daily links.

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