If 2020 taught us anything, it's that the subscription era is here to stay. For media organizations, in particular, the unexpected, rapid decline in remaining ad revenue has created an unprecedented urgency to solidify subscription and membership models. The to the success of this model is the lifetime value of those subscribers.
One way to keep them around is subscriber perks. 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.
Arguably subscriber fatigue is already setting in. The media organizations coming out on top with the largest subscriber bases are providing unique and compelling products and experiences. What news organizations shouldn’t be offering is a digital subscription to your grandparent's newspaper. Every organization needs a new bundle.
When social media was new it promised to be a space publishers could leverage to build and deepen audience relationships. Today, due to algorithms, trolls, data privacy issues and more, the opportunity to reinforce a relationship is shrinking. Even if a target audience is reached, the moment is fleeting and tarnished.
Now email has also become a “go-to” means of owning and maintaining a relationship with subscribers. The average American has 198 unread emails though. Content sent via email can become lost to the ether of the trash bin. The amount of time it takes to craft an email newsletter is always deflated when we consider 80% of recipients never even open it.
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:
The survey showed that after 6 months of using Subtext, our customer's users unsubscribed only half that of as the control group of non-Subtext subscribers.
Let’s see how this plays out in real 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 about 4,000 subscribers total 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.
According to NiemanLab an average digital subscription costs around $12 / month. The delta between our two publishers is 4,561 subscribers.
For Publisher B: That’s a monthly recurring revenue difference of $54,700 and an annual recurring revenue difference of $656,700.
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 subscription 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 as high as 73. For context — Netflix has a Net promoter score of 68.
What makes our customer reviews so satisfying — the praise is heralded at 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.
If you’re still wondering if Subtext can help with retention — just ponder this. What’s more likely to get somebody to update an out of date credit card? You can send them a pre-written email, or a text from their favorite beat reporter.
In this post we look at how Subtext can be part of a retention strategy. But Subtext can also be part of a customer acquisition funnel or a stand alone revenue generator. How you leverage Subtext depends on your goals.
There’s never been a better time to double or triple down on retention. If you want to keep customers — here’s your chance to give them a new product that ensures unique daily engagement.
When you create a campaign on Subtext, we work for you. And if your goal is to retain existing subscribers — 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.