Innovations to Reduce Subscriber Churn

Deciding how to divide a limited budget between advertising and audience building is a constant challenge for publishers. Although many believe that spending on audience acquisition is more lucrative than spending on audience retention, publishers are realizing lasting benefits from preventing subscriber churn.

The recent News Media Alliance webinar, “Innovations in Audience Strategies that Reduce Subscriber Churn,” was led by Matt Lindsay, president of Mather Economics LLC., Patrick Tornabene, vice president of audience development and analytics at Newsday and Nikhil Hunshikatti, vice president of marketing for The Columbus Dispatch.

According to Lindsay, reducing the subscriber churn rate can have a significant impact. Mather Economics estimates that even a 5 percent reduction in churn increases profit dramatically – between 15 and 95 percent, depending on the publisher.

This is why many publishers such as Newsday are using a concept called churn modeling: Leveraging predictive analytics to understand each consumer, why they value your product and their risk of cancelling a subscription.

“You would know the likelihood of the subscriber leaving before they leave, so your marketing actions could be proactive instead of reactive,” Tornabebe explained. “Furthermore, you would understand why subscribers leave and why they stay.”

Understanding churn modeling helps publishers identify the most cost-effective ways to acquire and retain subscribers, while guiding marketing and advertising initiatives to greater profitability. By scoring subscribers based on their probability of churning, from 1-100, publishers can easily identify which consumer habits and sectors will be most profitable to target.

Publishers are seeing the benefits of churn modeling in many ways, which include:

  • Lower cost to retain subscribers than to acquire them
  • Greater revenue from subscribers
  • Enhanced consumer research findings
  • Marketing and product development guidance
  • Prevention of subscriber churn behavior

Tornabene conducted several applications of churn modeling with Newsday. One method, Dynamic Messaging for Payment Deviations, works under the assumption that change in an individual subscriber’s payment habits is highly predictive of churn probability. The results of this method showed that sending dynamic messaging to customers who missed a payment reduced the likelihood of them dropping the subscription.

Surprise and Delight Retention Marketing is another application of churn modeling, which includes using the churn score to identify those subscribers with the highest risk of churn and sending them a gift of appreciation, such as a thank-you note, gift card or portable phone chargers.  The rewards led to a lower churn rate among subscribers, with the greeting card showing to be the most cost effective and successful method to retain subscribers.

Other applications include Niche Product Opt-Ins and Customer Experience Management. Since long-term subscribers tend to be more valuable and generate more revenue, publishers have found that offering additional products or benefits to subscribers for free, on an opt-in basis, increases the likelihood that they will maintain a subscription. Optimizing the customer experience and increasing personalization is also critically important, as consumers are more likely to cancel a subscription of they feel the content is becoming less relevant to them.

In addition to analyzing consumer behavior, churn modeling can be useful for evaluating customer service. Publishers can monitor calls from customers looking to cancel subscriptions or negotiate prices and distribute customer surveys after each call to identify the impact of employees.

At Newsday, Tornabene identified common demographic trends in audience churn, outlined in the chart below:

The key is to piece this data together to create useful information about each consumer. During the webinar, Hunshikatti, explained that publishers will benefit from the realization that a print customer can also be a digital customer, but they will behave differently with each platform.

“We have individually targetable information on 1.7 million [customers],” Hunshikatti said. “Now, we know that our digital-only subscribers are extremely engaged with the platform… at the extent that they have 50 percent more page views and 70 percent more visits than print-and-digital subscribers.”

Identifying the customer lifetime value (CLV) also helps to predict the revenue stream and retention span for a subscriber. Through a rating system, publishers rank subscribers based on their value and can use this information to handle customer calls more effectively. Publishers can also develop a deeper relationship with subscribers by analyzing their engagement with websites and newsletters. This data allows publishers to create rewards programs and incentives to retain subscribers or win them back.

With a growing emphasis on audience retention in the newspaper industry, churn modeling is a useful tool that will lower costs and increase revenue in the immediate term as well as in the years to come.


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