Counter-intuitive insights from Piano’s Subscription Performance Benchmark Report
Think loyal users drive conversion? The data indicates a more nuanced reality. According to Piano’s latest Subscription Performance Benchmark Report, nearly 30% of subscription conversions happen after 10 active days – in the first year of a subscription business. In year two, over 40% of conversions happen on the first day of engagement.
“That’s because the nature of a subscription business changes over time,” the authors explain. “For that reason, relying only on loyal users to drive conversion can be a mistake.”
The report is based on an analysis of data derived from Piano’s work with more than 550 enterprise clients and 140B+ pageviews every month. It closely examines metrics that will help publishers understand what inspires conversion and retention and identify the hurdles.
“As subscription programs mature, publishers need to adopt more sophisticated tactics in targeting users for both acquisition and retention,” says Michael Silberman, SVP Strategy, Piano. When we analyze the customer journey for digital subscriptions, we’re looking at how organizations can drive engagement—and in turn, increase user value—as they move through that funnel.”
Building a successful subscription program is not a ‘set it and forget it’ endeavor. Being able to measurably test tactics and approaches will make a world of difference as your subscription program matures.Subscription Performance Benchmark Report, Piano
The report packs in several counter-intuitive insights. For example, mobile visitors who make 65% of digital audiences, convert at a much lower rate i.e., 19.7% compared to 42.4% for desktop users. This is because “mobile users are much more likely to abandon checkout at the first sign of friction,” the report suggests.
“Streamlining the checkout process to remove any technical friction between that first click and the time they abandon their purchase will help.” Optimizing the user experience and using communication, pricing, and promotions that are different from desktop users will also boost conversion prospects.
Understand how each facet of your subscription strategy works on mobile and desktop and look for points of friction that could be eliminated.Subscription Performance Benchmark Report, Piano
Publishers are advised to develop an “audience development strategy that’s focused on building strong relationships, and in turn engagement, with users through multiple channels as inroads to paid conversion.”
45x difference in conversion rates of known vs anonymous visitors
“Registration can be an important step towards paid conversion,” the authors note. There is a 45x difference between conversion rates of anonymous visitors (0.22%) and known users (9.88%). The report examines the pathway registered users take on the way to becoming subscribers.
The data reveals that over 40% of paid conversions happen after the first month. “The bulk of those registered users have been there for a long time,” the report states, “it may take a promotion or a particularly enticing piece of subscriber-only content for them to finally subscribe.”
It recommends targeting readers based on where they are on their journey. For example, machine learning can point out users that are less likely to subscribe, they can be targeted with special promotional offers. Email newsletters can be used to entice registered users to visit the site and consume content. Personalized recommendations will help them get convinced about the value of the subscription. They can eventually be directed towards paywalls via premium content.
The right model — from trending algorithms to more sophisticated contextual algorithms — can help. But you don’t have to choose a single method. Machine learning tools can optimize your approach, shifting between multiple algorithms to find the best balance for each user.Subscription Performance Benchmark Report, Piano
The data shows that the median click-through rate for auto-optimized content recommendations is more than 60% higher than recommendations using manual settings.
“Engage these subscribers before they become inactive”
Once they have subscribed, it’s critical that publishers start engaging subscribers immediately for the data shows that nearly one-third of all active churn happens in the first 24 hours. The report recommends introducing an early onboarding campaign that clearly focuses on the value propositions offered. This will help build relationships with new subscribers and encourage them to consume content.
‘Sleepers’ are subscribers who have not visited the site for the last 30 days. They account for over 40% of subscribers for the average subscription website and are most likely to churn because they are not deriving value from their subscription. Tactics to reengage them include using especially appealing content as a hook or capitalizing on a major news event.
“Even more important is to engage these subscribers before they become inactive, building habits so that they don’t fall asleep in the first place,” the authors write. “By making your site part of their regular routine, you decrease the chance of these users ever falling asleep.”
Subscription can feel like the finish line, but it’s really just the start of your long-term relationship with a user. Your subscribers obviously value your brand already, at least enough to commit to a paid subscription. The goal is to keep those positive feelings intact, build habits and create strong relationships along the way.Subscription Performance Benchmark Report, Piano
The full report is available here:
Subscription Performance Benchmark Report 2022