Publishers aren’t the only ones using subscription pricing.
Organizations as wide-ranging as Amazon, Salesforce, Burger King and Caterpillar have all invested in recurring revenue models as a means of driving predictable revenue, but also of building direct relationships with their customers.
Subscriptions are changing how we work, play, shop, eat and travel. The good news is that consumers understand subscriptions, and accept them as part of how they achieve their goals and solve their problems. The bad news is that they are tired of subscriptions that underdeliver on their promise, are hard to use, and that hide the cancel button.
So if you want to attract, engage, retain and deepen relationships with your subscribers what should you do?
Well, you can learn a lot by looking at the best practices across a range of industries. Here are my top 10 tips:
- Don’t hide the cancel button or lock-in membership. Netflix takes this to an extreme, in the best way. You can only subscribe monthly—there is no “annual” option, and every time they change the model or raise prices, they remind subscribers that they are free to “cancel anytime”. Why? Besides being the ethical approach, members who feel locked in will eventually break free. When they do, they will loudly share their story, and they’re unlikely to return. Make it easy to leave and easy to return.
- Be thoughtful about what you’re giving away for free and why. Freemium and free trials are all the rage, and virtually every digital news organization has some content that’s not behind the paywall. Great. But make sure you understand the return on this investment. A free trial is a taste of something to prove it’s as good as you said and to help someone new to understand what it “tastes like”. But once they’ve tasted, they don’t need to taste it again. Too many readers game the system, clearing cookies and rotating through devices and news sources each month to avoid paying.
- Onboard new members for success and engagement. In the seconds, minutes and days after someone subscribes, they are still behaving like consumers, trying to decide whether they’re going to stay or not. You need to do three things in those early moments. Give them the value they came for, reinforce the wisdom of their decision and help them set up their subscription to ensure that they’re getting the value they’re paying for. LinkedIn gamifies this onboarding process by showing new members how much they’ve done to maximize value. You can too.
- Optimize content for members, not advertisers. Advertisers pay for eyeballs, but subscribers pay for value. That article about Kim Kardashian, or breaking news, will get a lot of clicks, but generally, people aren’t willing to pay for that type of content. In contrast, a long (boring) story about the bond market might drive someone in the world of investments to sign up for a high priced subscription. You don’t need the most content, you need the content your members are willing to pay for. If you have altruistic reasons for covering content people don’t pay for, that’s fine—just be clear on what you’re doing and why.
- Focus on your member’s mission, beyond articles. Subscribers don’t subscribe because they want a newspaper. They subscribe to better understand the world around them, or to look smart in front of their colleagues. Articles are one feature that can help them achieve those goals, but so are live events, classes, and consulting services. Be bold and broad when considering how to bundle value.
- Make sure each employee understands what the Membership Economy means for her. Many organizations think of subscription pricing as a “marketing decision”. But joining the Membership Economy means that the whole organization is focused around building a long-term, formal relationship with the people you serve. That has implications for the finance team, for the technology team, for the operations team, for the distribution team and even for the editorial team.
- Be willing to cut even as you add. Many publishers are organized based on what was (and maybe no longer is) the best bundling of value for readers. For example, a regional paper might have a little world news, a little national, a little politics, and a smattering of lifestyle, sports and business. Today, consumers have so many choices, and the freedom to get deep expertise in the areas that matter most. If you can’t provide differentiated content worth paying for in every department, consider dropping that content. Some people will complain, but it will free up resources to focus on a few things that only you can do.
- Stay forever young. Many longstanding news organizations notice a graying of their readership. It’s not because young people don’t like news, it’s because these organizations are not the best options for people who are considering their options today. It can be easy to confuse inertia with loyalty. Consider whether your publication looks like it was written with young people in mind. What is the average age of people featured in your stories and pictures? How pleasing is your user experience? Remember to optimize both for today’s members and tomorrow’s prospects, and allocate resources for both.
- Specialize. Streaming companies have gone in two directions—some organizations provide everything (thanks Spotify, thanks Amazon Prime Video) while others have gone niche (I’m looking at you Crunchy Roll and BroadwayHD). Some of the most successful entrants into the world of publishing are hyperfocused—The Information, The Athletic and Tortoise Media—to name just a few.
- Use the right metrics. In the new Membership Economy, customer lifetime value (how much any one customer spends over their entire relationship with you) becomes more important than eyeballs, circulation or clicks. You want to track acquisition, but also engagement and ultimately expansion. There are literally dozens of software companies that support churn management, engagement and optimizing for customer success and happiness. When was the last time you went shopping for new technology to support your relationship with customers?
You don’t need to adopt the playbook from another industry. What Restoration Hardware or the NBA or Salesforce is doing to maximize lifetime customer value may not work for your organization. Even among publishers, there are many different models that can work, from hyperfocused to universally broad, and from local to global, as well as in tone, content choice and supporting services.
What’s important to keep in mind is that consumers understand subscription and expect a model that puts their long-term goals at the center of everything your organization does. That is a membership worth paying for.
Robbie Kellman Baxter, Consultant and Author
About: Robbie Kellman Baxter is the founder of Peninsula Strategies LLC, a consulting firm that helps companies excel in the Membership Economy and a subject matter expert on membership models and subscription pricing. Her first book, The Membership Economy: Find Your Superusers, Master the Forever Transaction & Build Recurring Revenue, is an international bestseller and her follow-up The Forever Transaction: How to Build a Subscription Business So Compelling, Your Customers Will Never Want to Leave launches in March 2020. Clients have included Microsoft, the Wall Street Journal and Electronic Arts to name but three. Website: www.robbiekellmanbaxter.com