Texting Can Reduce Subscriber Churn by as Much as 50%

In this post-pandemic world, it's clear that the subscription era is here to stay. For media organizations, the rapid decline in ad revenue along with a recession has solidified subscription and membership models. The success of this model is measured in the lifetime value of those subscribers.

In the current environment, subscriber perks are the way to reduce churn. Here at Subtext, our customers are finding a 50–60% reduction in subscriber churn by adding texting to their subscription experience. Keep reading to find out what this means for revenue.

Subscriber Burn Leads to Churn

Americans are spending, on average, $219 per month on subscription services. With record levels of inflation that have been slow to cool and a recession, retaining customers a challenge for everyone. Consumers are watching their wallets, but haven’t stopped spending money where they see the value.  23% of people who have canceled subscriptions said they did so because they weren’t using them enough. The media organizations winning the fight against churn aren’t just offering a digital subscription to your grandparent’s newspaper, they’re offering compelling and unique experiences.

Texting = Loyalty. Plain and simple.

Let’s look at how texting can create loyalty and retention with subscribers. A Subtext client using our platform as a subscription perk surveyed 1,500+ of their text subscribers. Here are their two big takeaways:

1. 75%+ said they would be more likely to renew their subscription if Subtext was included.
2. Of those who indicated they intended on canceling their subscription, 60% said they would reconsider their decision if it meant Subtext was only available to subscribers.

The survey showed that after 6 months of using Subtext, our customer's users unsubscribed at half the rate as the control group of non-Subtext subscribers.

The Scenarios

Let’s see how this plays out in actual subscriber counts over time.

Publisher A has 10,000 subscribers and is adding 1,000 new subscribers a month for 12 months. This publisher has a churn rate of 7% for long-term subscribers and a churn of 30% for new subscribers. Here’s what their growth looks like after 12 months.

After 12 months, they’ve grown to about 4,000 subscribers, and we can get a general sense of their growth curve. It’s not bad. But they’ve lost a total of 6,000 new subscribers.

Now let’s imagine that same publisher but because of their use of Subtext, churn has dropped to 5% for long-term subscribers and 15% for new subscribers.

After 12 months, they’ve added 8000+ new subscribers (double Publisher A’s growth). They’ve lost only 3,000 new subscribers.

What This Means in $s

According to the American Press Institute, an average digital subscription costs around $10/ month. The delta between our two publishers is 4,561 subscribers.

For Publisher B: That’s a monthly recurring revenue difference of $45,610 and an annual recurring revenue difference of $547,320.

Our Own Subscriber Data

The customer data bares out against our own subscription campaigns too. Subtext campaigns that have their own stand-alone subscription price have a churn of around 4%. When people do cancel subscriptions with Subtext — they often contact us directly because they don’t want the host to know. To cancel on a Subtext host feels too much like canceling on a friend — and speaks highly to the kind of retention you can earn.

Subtext also offers campaigns that are free to the public (we call these engagement campaigns) and these have a churn of less than 2%.

What Do Customers Think?

In this survey of 1,500 subscribers, Subtext received a Net Promoter score of 51. Through another client survey of a few hundred subscribers, Subtext got a Net Promoter score of 73. For context — Netflix has a Net promoter score of 68.

What makes our customer reviews so satisfying is the praise is heralded to our clients, not to us. If the subscribers don’t know Subtext is in the background and give all the praise to you — we’re in full support of that.

The Takeaways

If you’re still wondering if Subtext can help with retention — just ponder this; what’s more likely to get somebody to update an expired credit card: a pre-written email, or a text from their favorite beat reporter?

1. Texting can reduce churn by as much as 60%.
2. Keeping subscribers is the best path for long-term growth. We know it is 5–10 times more valuable to keep an existing customer than it is to find new ones. A subscriber saved is worth more than a subscriber earned, especially during an economic downturn.
3. Higher engagement means lower churn. It’s not the price that causes churn, it’s a lack of meaningful engagement.
4. Texting is a unique differentiator as a product. A unique product gives you a unique connection to your audience. It provides a private, direct, and troll-free space where subscribers are far more likely to respond. This in turn produces smart conversations, story ideas, and feedback that converts to reader-centric content and behaviors among your team.

A Final Note

There’s never been a better time to double or triple down on retention. If you want to keep customers — give them a product that ensures unique daily engagement.

Whether you’re looking to use text as part of a retention strategy, a way to acquire new customers, or a way to generate revenue— we’re here to help. We have a dedicated team sharing best practices and insights to help ensure that you can execute against your goals. Best of all — the more confident you become in your retention — the more ambitious you can be with new customer acquisition.

If you're looking to grow your following, schedule a demo with the Subtext team.