Strange that despite being locked down, at least here in the UK, the weeks seem to fly by. This week has produced another diverse mix of news in the subscription economy. So below weâll take a look at increasing CLV, how Google helped one publisher grow their subscription revenues and the Weather Channelâs unlikely subscription success.
Photo by rupixen.com on Unsplash
The value of returning customers
A team from Columbia Business School worked with an e-commerce start up to increase customer lifetime value. Their analysis pointed to getting visitors to return to the site as the place to start. They calculated that an increase in return rate of just 1% would deliver an increase in revenues of 1.4%. The Columbia team, as you would expect, took a data-driven approach. They started by segmenting the customers into groups they could identify, for example, newsletter subscribers, who, as it turns out, are 13% more likely to return than any other group. In the article there is a really useful acquisition and return analysis by channel - any subscription marketer should be trying to build the same. Read more.
Google case study - personalise it!
Helsingin Sanomat and Google worked together on the Finnish publisherâs digital journalism and drove subscriptions to over 400,000. Bear in mind thatâs in a country with a population of 5.5 million. The foundation for the growth in their subscriptions was implementing content personalisation on the front page (their words). This was done using pretty standard tools but meant they could serve content based on previous user behaviour. Increasing engagement is the key to driving people to subscribe. Building a content recommendation engine that is constantly learning to serve customers what they are likely to read does this. Read more.
Which customers will spend more?
Most subscription marketing is focused on acquisition, a little on retention, but probably not enough on upsetting existing customers. Tempting customers to upgrade can be tricky as there will always be a segment of customers who upgrade on their own account. How do you avoid losing revenue here? Uplift modelling aims to find the âpersuadableâ customers who will only upgrade if you nudge them to. This article lays out an approach to uplift modelling and then the marketing activity you can test. Most of the technology noted is open source, including some released by the team at Wayfair. Driving subscription revenue is about working hard at all the incremental gains, persuading the right customers to upgrade is one of those. Read more.
Bad weather drives subscriptions
The Weather Channel decided to look again at a subscription model 18 months ago, having originally doubted that the business model would work for them. Since then theyâve grown to 860,000 paid subscribers paying ÂŁ4.99 a month. In building their subscription product the weather channel researched what people would be prepared to pay for. Subscribers are segmented by:
users who want to remove ads - watching weather videos is not an easy experience with ads in
weather geeks and those people where the weather affects their jobs or hobbies eg farmers, sailors etc
people who need detailed information during an extreme weather event - Hurricane Marco drove a 1% leap in subscriptions
On top of this, the Weather Channel has taken a smart approach to identifying users who are likely to subscribe. For those users they replace external advertising with messaging to drive subscriptions. The Weather Channel has identified how to provide real value for their user and is building a solid subscription revenue stream. Read more.
Quick Links
Disney+ is ripping up the streaming playbook and outmanoeuvring Netflix. At least thatâs the view of Fast Company. Disney+ is releasing series like WandaVision and The Mandalorian one episode at a time, not delivering a new movie or TV show every day of the year etc. Is this really driving Disney+ success? More likely itâs the incredible back catalogue and IP they have. But can this last? There are definitely some aspects of the user experience that are just inferior when it comes to engaging the viewer. Oh and Disney is increasing prices across it streaming services link.
The Washington Post has built a multi-publisher shared subscription system and an ad platform that it wants other publishers to use. This looks like something directly out of the Amazon playbook, take one of your biggest costs, build the technology / service / expertise yourself and then sell that to other people. Can it work here?
Twitter might let you undo tweets as part of their subscription product. This would be different from deleting a tweet, which anyone can do now.