In 2019, the Medill Local News Initiative at Northwestern University crunched a whopping 13 terabytes of data and found three key components to building a sustainable reader revenue stream:
- Help readers build the habit of coming back.
- Own your local beat better than anyone else.
- Don’t neglect skimmers. Light readers pay for subscriptions, too.
Loyal audiences are built on habits. Once a reader makes a publication a part of their routine, they are more likely to pay for a subscription or membership and keep it. Publications that struggle to grow a loyal audience base often struggle with high churn, which can be a vicious cycle.
This study also says personalization has “vast unrealized potential”.
However, personalization means more than slapping a reader’s first name in an email and calling it a day. Effective personalization shows the reader you understand them and value their attention. It strengthens the relationship.
Think about it. Would you rather buy from some pushy sales jerk who calls you “Al” when your name is “Alex”, and assumes they know what you want? Or someone who is interested in you and makes you feel like a million bucks?
Segmenting your email list is one way to personalize your messages to reach your readers where they are. An effective segmentation strategy leads to more readership and loyalty, higher conversion, and reduced churn.
How to use email list segments in your reader revenue strategy
To grow your subscriber base, you must help less frequent readers build a regular reading habit. Getting your frequent readers to read more stories or spend more time on site is great — but it isn’t going to move the needle on new subscribers.
Let’s say your data show that readers who visit your site six or more times in a month are more likely to pay for a subscription.
Of course, that also means that people who visit less than six times per month are less likely to buy a subscription.
Right there, we have two segments we can work with:
- Readers that visit less than 6 times per month.
- Readers that visit 6 or more times per month.
If you read The Byline’s guide to building a revenue funnel, you’ll recognize these readers at different stages in the middle of the funnel. You’ve already gained interested people’s attention, so your goal is to guide them to the next step.
But what is the next step? I most often see two things happen:
- The publication does…nothing. They keep sending the regular ol’ newsletter. It’s usually automated, cold, and impersonal. It never asks readers to open up their wallets.
- The publication floods the inbox with subscription offers and discounts. I recently signed up for a newsletter from a big metro newspaper. Over the next 95 days, I received 73 special offers and only 5 editions of the newsletter I signed up for.
Please don’t take either of these paths. The first is like sitting down at a restaurant and the server never takes your drink order. The second would be like the server bringing the bill before you’ve even had a chance to read the menu and order. Rude!
Help infrequent readers engage more frequently
Readers that visit your site fewer than six times per month are familiar with your work, but they aren’t quite all in. The next step you need them to take is to become frequent readers. Do not ask them for money!
Why? Your best option would probably be to throw a free trial or discount at them, but odds are they won’t convert to full price. When they don’t convert, we could throw more discounts at them, but then they will never pay full price. If you offer them full price off the bat they’re likely to reject the subscription, and once you’ve actively decided “no”, it’s hard to reverse.
So rather than try to sell to them at this stage, we should find ways to serve them better. Be helpful. Be generous. Skip the sales pitch for now.
How can we serve them better?
Answer commonly asked reader questions, before they ask. Point them toward your best stuff. Or one of my favorites: ask them a question. Ask them what they like, what they wish they could read. Even better if you ask them to reply to the email rather than clicking buttons in a survey.
The New Tropic pushes engagement instead of a sales pitch
The New Tropic has a great welcome email with useful information. It lets new signups know when they send out their newsletter and how to get in touch with the editorial staff. But do you see what’s not in their welcome email?
There’s no sales pitch.
The New Tropic has a growing membership program, where locals can pay $8 each month. Members get perks like discounted tickets to The New Tropic events and special giveaways.
But — you aren’t asked for money as soon as you sign up for the newsletter.
Instead of a sales pitch, there’s a P.S. section that asked if you’ve filled out your profile yet. Why would I do that? Well they have an answer for that, too. They want to wish you a happy birthday, and let you know about what’s happening in your neighborhood.
People are much more likely to share information if you tell them what they are getting out of it.
Three days after signup, I received another touchpoint email from The New Tropic. Once again: no sales pitch.
Are you getting anxious yet? How do they ever get any new members if they aren’t asking for money? Well, let’s look at the strategy behind this email:
- It's Ariel checking in again. She signed off the welcome email with a fun gif. The friendly tone is reinforcing that “hey, we’re real people” vibe.
- There’s a list of four popular links. One is The New Tropic’s neighborhood guides, “which we’re continually updating”. That note on updating is awesome! How many times have you seen a stale neighborhood guide that’s no longer relevant?
- Another ask to complete my profile.
- Using the P.S. section again, The New Tropic introduces their ambassador program. Share their newsletter with friends, collect perks.
The timing on the ambassador plug is key. If you push someone to buy when they aren’t ready, they put up their defenses. If you ask for $8 a month and get rejected, you will have a harder time getting them to sign up for the free ambassador program. Their defenses will smell a sales trap.
Rather than trying to barge through the door, The New Tropic is taking the time to help you figure out how to help it serve you, their new reader. Be generous. Share helpful information. Show people that you have tools to help them with no strings attached, so it’s easier for them to trust you.
Each of these emails provide a path for readers to check out something else from The New Tropic. And because there’s no high pressure sales blitz, readers are encouraged to click through and see what they like. It’s low-risk for the reader.
You can use this strategy outside of a welcome sequence. The New Tropic uses these emails as a welcome sequence for new subscribers. But what if you had a re-engagement series for readers whose interest waned 30 days after signup?
There are no silver bullets, so take time to test different strategies to figure out what works best for your audience. For now, let’s move on to frequent readers.
Show frequent readers why they should be paying for your work
So what about those newsletter readers who visit six or more times per month? These people have already built up a steady, regular habit with what you are producing. The next step for them is to make the leap to becoming paying subscribers or members.
This is the time for your sales pitch. These frequent readers are familiar with your work. They have their go-to favorites and regularly open your newsletter. They are well-qualified prospects to become paying supporters.
At this point, you have a variety of tactics you can use. One tactic is to give them a taste of what’s behind the paywall. The Information recently hooked me this way. Just before my trial expired, they sent me a story in a separate email labeled “Exclusive” in the subject line.
The timing was so good, and the story was so intriguing that I clicked right through. Then I entered my credit card information.
Opening up the paywall to read one exclusive story was a powerful way to convert me to a monthly subscription.
Free trials or promotional rates can work to entice people sitting on the fence or procrastinating. My advice is to use discounts as narrowly as possible. Think about stores where everything is always on sale. Why would you ever pay retail? Make sure your promotion is a sweetener, not something that cheapens your product.
America’s Test Kitchen’s $10,000 chocolate chip cookie
America’s Test Kitchen’s subscription business makes up 60% of the company’s total revenue. In addition to 1.3 million print subscribers, America’s Test Kitchen boasts 420,000 digital subscribers. That digital business is posting double digit year-over-year growth, plus 80% renewal rates.
When you look at America’s Test Kitchen’s newsletters, you see how they prioritize the success of their audience, even with their free products. This is a highly effective way to invite readers to get to know their work.
Check this email out. The subject line is: “Hi This is how you perfect a recipe.”
There is no long, meandering intro.
They make a big promise and go straight at the sweet tooth:“We spend an average of seven months and $10,000” developing every recipe — and we want to show you how to make perfect chocolate chip cookies.
In other words, they spent half a year and enough cash to buy 2,857 packages of Chips Ahoy, so they could teach you how to bake better chocolate chip cookies than Toll House.
Now, they could just give you a big button to grab the recipe. And they do give readers that option. But there’s more after the “Get the Recipe Now” button and a free trial offer:
America’s Test Kitchen gives a side-by-side comparison of their recipe versus the classic Toll House recipe. Did you know brown sugar is hygroscopic, so upping the ratio of brown sugar to white sugar makes a chewier cookie? I had no idea!
By going in-depth and showing the benefits of their process, America’s Test Kitchen is drawing readers into their mission to help people become better home cooks.
The web is full of — ahem — half-baked recipes on food blogs and recipe aggregators. America’s Test Kitchen is giving you the story behind their recipe (before you actually see the recipe!) to show how they are different:
- Our recipes are well-researched and tested, but also…
- We are going to share what we learned with you, because…
- We want to help you become a better home cook.
America’s Test Kitchen is making an important bet: Try it once, and you’ll see you can’t live without our recipes.
The key to this strategy is getting the reader a win. America’s Test Kitchen didn’t start off with a Beef Wellington recipe. That’s too difficult. If the first recipe was too hard and made a giant mess of your kitchen, would you be enthusiastic to buy a full year subscription?
Rather, they chose to make something your typical home cook has made before, with tips to level-up their results. Low risk, but a big reward for the home cook and their subscription numbers.
Four other newsletter segments to get you started
Now that we’ve seen how segmenting your list to meet your frequent and infrequent readers where they are, let’s look at other ways to segment your audience. Here’s a little secret: You already have some segments for your list ready to go.
Fans of specific beats or topics
One of the key takeaways from the Medill Study at the beginning of this post was: Own your local beat better than anyone else. This is a huge competitive advantage, especially when you segment your outreach based on what stories readers absolutely love.
There are some audience management platforms like Pico that give you the ability to register your site’s anonymous visitors. Once readers register, you have insights on what categories different readers are most engaged with. With this information, you can segment and target different audience segments based on their interests.
If you don’t have audience data that detailed, that’s okay. There are other ways to segment based on interest, too.
Earlier in this piece, I mentioned that we can serve new readers better by asking them a question. One way to do this is ask them what sort of stories they are most interested in, as a basic survey.
Take this example from The Tyee, based in Vancouver, British Columbia. This is a separate email sent to new subscribers. It promises the survey will only take 30 seconds, and they tell you what they are going to do with the responses.
When you click through to the survey, it’s short!
In that initial email, The Tyee says they use these responses to inform “what stories you think deserve our attention.” With this additional information of what a new reader says they are looking for, you can also use this information to segment your list. When it’s time to send out the year-end “Best Of” list, what if you tailored the list to reflect the interests of different readers? For instance, more political stories for the fans of politics, but more education stories for those readers. It’s a win-win for everyone.
Some publications have options for readers to select their topics or how often they receive emails. These are useful segments for building engagement or earning subscriptions.
When you are able to segment your list and reach out to people based on their interests, you have a much better chance of building a relationship versus blasting everyone the same thing all the time.
Event attendees and product purchasers
Do you collect email addresses with event tickets? Don’t add them to your list and start firing off spam. Tag their email addresses! Then send this segment an exclusive early bird ticket offer for the next event.
If you set up a booth at a community street fair, tag the email addresses you collect. You’ll have a newsletter segment of people full of insights about specific communities you cover.
Do you sell swag? I have a great Block Club Chicago t-shirt and a tote bag. I’m a different audience segment than someone who reads Block Club everyday but doesn’t buy their promotional items.
Convert highly engaged members to premium membership tiers
Some publishers use membership programs to build relationships with readers that go beyond subscriptions. The relationship building goals of membership programs and audience segmentation go hand-in-hand.
For instance, the non-profit Colorado Sun offers three different membership tiers: Basic ($5 per month), Newsletters+ ($20 per month) and Champion ($100 per month). At the Newsletter+ membership tier, members get special pre-order access to events and two premium newsletters: one on politics and one about the outdoors.
This is similar to the example with frequent readers above. There is going to be an audience segment on the Basic tier at $5 per month that are more engaged, high frequency readers than most Basic tier members. These readers are loving what they are getting for their money, and they would probably enjoy the perks at the Newsletter+ tier, too.
But — what if we focused even tighter? Basic tier members who are frequent readers of politics stories or outdoor stories are well-suited for the premium newsletters at the $20 tier.
With the segment defined and the goal of getting an upgrade in focus, you can test out different pitches. Free samples of the premium newsletters. One-time special access to pre-order event tickets that feature those topics. A two-week free preview. Pitch these readers an upgrade!
Former Subscribers
Don’t sleep on former customers! Just because someone cancelled doesn’t mean you can’t get them back. In fact, win-back campaigns should be a part of your retention strategy.
As you become more experienced, you can learn from their behavior and interests to your former subscribers to win more of them back.
Caution: People aren’t demographics
Subscribers are real people, with real lives and interests. Be very careful not to substitute demographics for people. Lots of segmentation advice will suggest using demographics, but that’s shortsighted.
Demographics can lead you down the road of bias, stereotypes and assumptions. This is not learning nor understanding.
You cannot develop loyal audiences without understanding what people value and crave.
The biggest value of newsletter segments is learning about your audiences. Segmentation isn’t only about sending special offers to different people. With segments, you can learn what resonates with different people, so you can serve them better.
Conclusion
Developing a sustainable reader revenue stream is challenging. Finding a space in the market is the first part. But even once you find that fit, nurturing and growing a loyal subscriber base takes work, persistence and experimentation. Blasting out the same offers and messages to your whole list is like tossing a bunch of seeds in the yard and hoping an orchard appears one day.
Loyalty is built on habit. Segmenting your email list gives you more opportunities to understand your audience, from what they can’t live without to what they need to bring them back. Once you understand why readers come back to read your work, you can craft the personalized strategy that increases reader revenue.
