In this part two of the success factors for a digital subscription business, we look at three new areas, namely Offer and packaging, Sales and conversion and Optimized experience. These areas are by their nature quite tactical, but also very critical to optimize to achieve success with digital subscriptions.
Offer and packaging
It is critical to understand what we put into our offer, how we package it and what should we charge. There are no ready answers here, since media products by nature often look very different. However, it is important to look at close competitors, both for inspiration, but also to understand what is a realistic offer.
Understanding what the various offers should contain and how they should be priced, should be an ongoing question for the organization. It is important to understand how multiple offers interact with each other, both in moment of conversion (think classic offer psychology), but also how you in the long term will up sell your subscribers to more valuable offers.
To charge for the content, there must be a paid content strategy. Often this results in a paywall, where the typical models are “hard”, “metered”, or “freemium”. It is difficult to say which one is best, because it depends on many factors. Here, publishers must dare to test and evaluate what works for them. The same is true for how you tailor an introductory offering – often using a combination of free days and rebates.
Success factors for Offer and packaging
- Understand how content and the product should be constantly improved to attract more customers
- Build, evaluate, change – offers, price points and content strategies
- Keep it simple, find a good base and scale from there
Sales and Conversion
When it comes to finding the right sales channels, there are directions to consider. The choices you make affect how many new subscribers you get, your acquisition costs, and the “quality” of the subscribers.
The quality of subscribers coming from different sales channels can be very varied. What looks like a good sales channel with high sales figures can prove to be unprofitable if you look at how long customers actually stay and pay. Here many make a classic mistake: to believe that customers who have entered the system are the same. However, it often turns out that customers who come in through different channels differ greatly in behavior, character and profitability.
In addition to the fact that the quality often varies, so does the sales cost or the “CAC” – Customer Acquisition Cost. On one side are external channels that are often expensive, such as telemarketing, banner advertising, social media, affiliate networks, influencers and more. On the other side are the owned channels, such as paywall or advertising in your own newspaper or on site. These are often cheaper, but are also perceived as more complex to optimize. It may seem easier to increase spend on telemarketing to get more orders, instead of hiring an analyst who increases conversion in the paywall – the latter, however, is what gives long-term success.
Success factors for Sales and Conversion
- Understand that a sales channel can always be optimized and that you can always new channels
- Prioritize to optimize your own sales channels (such as your paywall), as it is often much cheaper
- Follow the customer’s lifetime, not just the number of sales from a particular channel
It must be easy to be a customer. We all know how annoying it is with complex invoices, incorrect payments, irrelevant communication or long queues for customer service. The fact is simple: in order for customers to stay, one must make it as simple as possible for them to do so.
Here it is important to familiarize yourself with the customer’s situation, both by acting on his own, but also by structured work to map and understand the customer journey. With this kind of work easily found so-called “pain points”, such as, for example, strolling invoices, which if resolved can have a very positive effect on the churn.
All subscription businesses must work to continuously engage their customers in order for them to stay. Here, a relevant and ongoing communication in channels that the customer personally appreciates, is preferred. Keep in mind, however, that in many people there is a great tiredness of getting the eternal mailings from companies and that some therefore want to completely avoid this.
Success factors for Optimized experience
- Gain a complete understanding of the customers’ experience
- Make it as easy as possible for customers to say – find solutions to their problems
- Communicate just enough – make it relevant and in channels that the customer appreciates
In the next article we will look at the two final areas to focus on, namely Data-driven workflow and Flexible organization.