As the media industry has evolved, the industry’s business models have also changed, with less emphasis on advertising as the major revenue stream and a greater emphasis on subscriptions. With this change in focus, subscriber retention is more important than ever, and specific subscriber retention strategies for media and publishing companies are needed.
Since long-term subscribers are the best customer, any growth strategy you put in place should be designed to keep a customer for as long as possible. And while many businesses see retention as a sort of plug to fix the problem of leaking revenue, it’s actually a very effective way to grow your business because it doesn’t involve high customer acquisition costs.
Subscriber Retention Strategies for Strong Customer Relationships
So how can you improve your retention rate? By building strong customer relationships. That’s been the key to success for European publisher Mediahuis Belgium, which relies on its reader retention strategy to fight churn. And it appears to be working: 80% of their print subscribers and 35% of their digital subscribers have a long-term relationship with the media company, with relationships ranging in length from 3 years to decades. The company recognizes the value of long-term subscribers and has created their customer retention strategy around that key element.
Here are five subscriber retention strategies you can use to build strong customer relationships:
Personalized onboarding
Begin your retention-focused customer journey with a personalized onboarding experience that catches any dissatisfaction or problems early so new subscribers are satisfied with their purchase and quickly engage with your content.
Pricing flexibility
Give subscribers the option to switch to a higher or lower priced option (i.e. switching from print to digital) to ensure a good fit and improved satisfaction. The idea is to build sustainable relationships with a loyal audience.
Loyalty incentives
Identify customers who are near the end of their subscription cycle and at risk of churning and offer them an incentive to stay. This could be a price reduction or something of added value, such as access to digital archives or a promotional item.
Trigger marketing to improve engagement
Engagement is important because regular readers are less likely to churn, according to a 2021 study by Northwestern University. Reaching out to subscribers at specific times throughout the customer lifecycle, such as when a subscriber hasn’t logged in for a long time or when a favorite writer has a new article, is an effective way to improve engagement.
Seamless payment experience
Providing a smooth payment process sets the stage for a successful customer experience. Payment failures pose a challenge, however, with 35% of e-commerce transactions failing due to insufficient funds, suspected fraud, or technical difficulties. Companies must use the right payment tools to reduce or eliminate any problems in the payments process and maintain valuable customer relationships.
Barriers to Subscriber Retention
Unfortunately, even the best customer relationship strategies can hit a snag. According to INMA Benchmarks, 3.6% is the average monthly churn rate for a media news brand. That means 67% new subscribers stay for a year and 28% stay for three years, on average. The churn rate for the 25% worst performers, is 7.6%. This translates into 42% new subscribers surviving a year and only 6% making it three years.
Why the high turnover? Customers leave for a variety of reasons, including financial difficulties due to high inflation and people simply wanting to avoid the news to protect their mental health. And payment failures also contribute to churn. According to a study by PYMNTS and FlexPay, 26.8% of consumers experienced a failed payment in the past 12 months. These failed transactions threaten your retention and growth.
Customer retention is the most effective way a media company can ensure growth.
Ways to Minimize Churn and Improve Retention
There are several technical tools you can use to reduce the number of failed payments your business experiences. These can either help avoid the failed payment in the first place, or help you recover the payment after it occurs.
Card account updater
This is a service offered by credit card companies and payment gateways to help businesses maintain up-to-date credit and debit card information. The card account updater automatically puts the new card details in the company’s system when a customer’s payment information changes because the card has expired or has been replaced. This type of recovery is a good first step in any recovery process.
Rules-based payment retries
A rules-based payment retry system runs a failed credit card transaction again on a certain day or time to try to get a successful payment. This is a good second step in the failed payment recovery process if you have the resources in place. However, the high cost of hiring the necessary data scientists and software engineers makes in-house payment recovery programs cost prohibitive for most businesses. Data from millions of transactions is needed to understand the most effective billing retry patterns and companies not in the business of payment recovery typically don’t have access to this type of information.
Failed payment recovery software solution
This third-party solution uses AI and machine learning to select the best method to recover each failed payment. This type of sophisticated recovery solution delivers the highest subscriber recovery and retention rates by beginning the recovery process on fresh declines and works directly with the payments systems to avoid customer awareness of the failed payment. When customer involvement is needed, positive, empathetic messaging is used that encourages the customer to update their credit card.
The result is a significant reduction in involuntary churn and more revenue from recovered customers. Our study with PYMNTS revealed that top-performing companies are 12 times more likely to use third-party payment solutions and recover 13% more failed payments.
Summary
Customer retention is the most effective way a media company can ensure growth, but a poor customer experience and payment failures can interrupt the customer relationship and put this essential retention at risk. Companies will continue to succeed, however, if they are customer focused and take steps to protect these valuable customer relationships by using effective subscriber retention strategies. As media maven Simon Owen says, “The death of media is greatly exaggerated.”
Do you want to recover failed payments and improve your customer retention? Reach out to our team to get started.
