Setting up your audience subscription revenue funnel

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    Why do you need a subscriber funnel?

    1. To get more subscribers!
    2. To build trust with your readers.
    3. To break down big conversion issues into solvable problems.

    Introduction – What is a “funnel” anyway?

    Funnels help you visualize how a person goes from being a total stranger to being a subscriber (or member or donor or event attendee, etc. – but we’ll call it a ‘subscriber funnel’ for simplicity).

    Think about the last time you bought a car. Where did you start? Did you walk into the car dealership and start haggling? I’m betting you didn’t.

    More likely — the first thing you did was a little bit of research. Maybe you saw a commercial that nudged you into visiting the manufacturer’s website. Or your coworker bought a new car, so you made them drive to lunch.

    Then you dug a little deeper. You read Consumer Reports. You searched for more information on electric and hybrid cars. You looked into what cars have the best safety ratings.

    These activities are part of the car buying process. Paying for news is less intensive (and it should be less stressful), but it is also a process.

    Benefits of a Subscriber Funnel

    You can define the steps of that process using a subscriber funnel. Once you define the steps, you can focus your messaging to maximize successful conversions.

    Subscriber funnels help you develop a strategy to grow your business. Having a clear funnel allows you and your team to understand their role and responsibilities in the conversion process.

    Think back to buying a car again. You know what model you like, and you are ready to see one up close. As you browse the cars at the dealership, you expect an excited salesperson.

    What if the finance manager also came out, too? But what if the finance manager pushes you toward a model with a big rebate?

    Oh wait, there’s more — the service manager is also hustling out to meet you. You would love this other model, because it needs less maintenance.

    UGH. You aren’t ready to buy yet. You haven’t even taken a test drive! You may not even like how the driver’s seat feels, but all these different people are up in your grill trying to sell you a car.

    Unfortunately, this hard sell is common among publishers. Funnels reward our patience. The rewards are more quality subscriptions, better retention, and lower churn.

    Additionally, funnels help you find those readers who value the work you produce and are excited to pay for it.

    We don’t want our readers to regret paying for their subscription. Why would that happen? Think of a time when you regretted buying something. Maybe you felt pressured into it by a salesperson. Or it was 75% off and you didn’t want to pass up a deal. What if it was more than your budget allowed?

    How did that feel? It sucks. Sometimes when I get buyer’s remorse, I feel dumb. Or irresponsible. More important: I vow to avoid that situation next time.

    We don’t want our readers to feel that way. We need to build relationships with our readers. We want them to trust us enough to give us their email address and their hard-earned money.

    We want a subscriber base of people who feel good about paying us to do the work. They feel good about supporting journalism. They feel good about connecting with their community. They feel like they can trust your work.

    They feel great about the value they get for the monthly subscription price. That’s what drives readership and subscriber revenue and long-term retention.

    If subscribers feel great about the value, they will tell their friends and neighbors. Those word-of-mouth referrals add extra power to your efforts to get new subscribers.

    Only one stage of the funnel focuses completely on conversion (i.e., the moment the card is actually charged): the very bottom. Every other stage strengthens the relationship with interested readers.

    The funnel in action

    Before we dig into the steps of a funnel, let’s see what one looks like in practice. During her tenure as the California Symphony’s Executive Director, Aubrey Bergauer re-structured the organization’s entire audience strategy.

    In 2013, the California Symphony was in danger of closing. Donations and ticket sales were in a slump. However, in just a few short years after Ms. Bergauer joined the team, the symphony showed incredible results compare to peer organizations:

    • Subscription revenue grew by 71%. The national average was 5%.
    • New subscribers renewed 69% of the time, compared to <50% nationally.
    • Ticket sale revenue increased 145% versus 4% nationally.

    Ms. Bergauer developed one “customer-focused engine”. This engine is a funnel, focused on long-term retention and deeper relationships with the audience.

    Start with first timers

    California Symphony uses common tactics like digital ads and direct mail to attract first time ticket buyers. This draws them into the top of the funnel, in the Awareness stage.

    After a new ticket buyer attends the show, soon after California Symphony sends them a postcard with a discount code for an upcoming concert. This postcard is followed up with an email a week later, with links to redeem their discount.

    The goal is simple: Get this new person to come back as soon as possible.

    Every action in this stage is focused on that one goal. Why? Their research shows that the lifetime value for someone who comes back within one year is remarkably higher than someone who doesn’t.

    What’s revealing about this strategy is what California Symphony *doesn’t* talk about.

    • They don’t ask for donations.
    • They don’t ask them to sign up for season tickets.
    • They don’t show the music director, or give a history lesson on the organization. That’s not useful information for new guests.

    This outreach is 100% focused on the ticket buyer’s experience, and inviting them to come back and enjoy the symphony again. That’s it. They hope you had a wonderful time, and you should come back!

    Show value to potential subscribers

    Season ticket subscriptions are important to California Symphony’s bottom line. Guests who attend more than one concert a year are the most promising leads to purchase a season subscription.

    To grow the subscriber base, the California Symphony uses this stage of their funnel to build interest and evaluate season tickets. To do this, they focus on encouraging new guests to make the symphony a habit.

    In Ms. Bergauer’s words, they approach these audience segments differently because there’s a “mental shift one makes after coming the first time (‘crossed that off my bucket list’) to coming a second time (‘this is an activity I enjoy enough to repeat’).

    How is this segment approached differently? First, they mail these buyers a card in an envelope thanking them for attending recent concerts. In this card is a voucher for a free glass of wine on their next visit.

    Additionally, there are two tactics for repeat buyers the California Symphony doesn’t use to target first-time buyers:

    • They do ask them to sign up for season tickets
    • They do show the music director and orchestra.

    That’s right. Unlike the first mailer, this card includes the music director and the orchestra. This is designed to deepen the relationship with the buyer, and enhance their experience.

    California Symphony could have introduced the musicians to the first time buyers. But think about what it’s like going to something new for the first time. There’s a lot to learn. How early to show up. Where to park. How the seats are laid out. Where the concessions are.

    It’s a lot to take in. However, if California Symphony can lure you back to a second show, you probably have those items covered. It’s a more relaxing, enjoyable experience.

    When you are more familiar with what you’re buying into — you find yourself wanting to know more about what goes into the production. Contrast that with someone who went once and decided it wasn’t their cup of tea. Knowing more about the musicians isn’t valuable to those one-time customers.

    Your funnel’s success relies heavily on delivering the right value at the right time.

    Reward the loyal subscriber

    Next, the California Symphony tried something different. Season ticket holders get first choice on seating section. It’s a valuable benefit for loyal guests.

    But what if the symphony extended this perk to people who the segment of repeat buyers who hadn’t yet purchased season tickets?

    In their drive to convert repeat visitors to season ticket holders, California Symphony asked for seating preference from these prospects. Their seat assignments were then moved up in line — but not ahead of existing season ticket holders.

    This is smart because it does two things: It demonstrates the value of buying season tickets rather than coming a few times a year. You get better seats and you get to keep your seats year in and year out. That’s a powerful hook!

    Key components for your funnel

    Now it is time to set up your funnel. First thing you need to do establish your end goal and the steps it takes to get there. In order for a person to move to the next step, you need to define what action or outcome triggers that move.

    You don’t need to create anything complicated. Think about the California Symphony’s approach to first time guests. They are focused on getting a second visit. Nothing else.

    As you learn about your customers and how they flow through your funnel, you’ll have opportunities to tailor your messages to increase conversions. Below I’ve outlined a very basic funnel with examples of the types of readers in each stage, and the tactics to steer them to the next stage.

    Step 1: Awareness

    The top of the funnel is where you build awareness for your news product. You plant seeds for future growth. To do that, you develop a good relationship with your audience and experiment to find new audiences.

    What activities draw people into the Awareness stage?

    • Search engine optimization (SEO)
    • Social Media posts
    • Paid acquisition. For example, ads from Google and Facebook
    • Community resources like voter guides or local government information
    • Readers sharing stories with their friends
    • Partnerships with other newsrooms
    • Outreach events. For example having a table at a local festival

    Who is in this stage? Occasional readers, and people who generally only show up during breaking news or the most popular stories.

    What tactics guide people into the next stage, Interest & Evaluation?

    • Registration walls on your site
    • Newsletters, especially daily headlines or automated newsletters
    • Topical events, like moderating a candidate forum or speaker series

    An example for publishers:

    Your goal is to drive account registrations on your site, because you’ve found that people who register are more likely to become paying subscribers.

    You run Facebook ads promoting your free daily headlines email newsletter. This is building awareness for your product. A Facebook user in your market clicks the ad and signs up for the newsletter.

    Now isn’t the time to hit them with a subscription offer. They signed up for the newsletter, not a sales pitch. Plus, you have a quality headlines newsletter that will show them some of the work you do.

    Over the next few weeks, they click and read stories. One day, they hit the limit. Your registration wall asks them to create a free account to continue reading. They signup, and you accomplished your goal: You attracted a new reader and got them to register on the site.

    Step 2: Interest & Evaluation

    It’s important to keep top of mind that potential subscribers are people. They are people with bills and kids and long commutes. And every day thousands of messages bombard their senses, trying to sell them something.

    You need to do more than break through the clutter. You need to connect with them on an emotional level. You need to speak to their interests and values.

    Build trust. Prove that you value your audiences and their needs. Be hyper-focused on readers and what they love.

    Who is in this stage? These are return readers who are familiar with your news product, but don’t have a frequent reading habit. Also, former subscribers are often in this group.

    What activities build Interest and encourage Evaluation?

    • Onboarding newly registered users.
    • Newsletters, especially more voice-driven newsletters, single topic deep-dive newsletters or neighborhood-specific newsletters.
    • Engagement reporting from audience questions, through specific callouts or ongoing series like “What’s that Lot?”.
    • Events where readers can meet with reporters and/or editors and discuss issues.
    • Targeted email campaigns to showcase relevant content, special sections or new features

    What tactics guide people into the next stage, Conversion?

    • Hitting the paywall
    • Promotional discounts or free trial offers
    • Targeted email campaigns
    • Testimonials

    Back to our publisher example:

    Once a user has registered, your goal is to get them to take a discounted trial subscription offer. This is your primary goal for moving them into the conversion stage. For this example, let’s say your full price is $10 per month. Your discounted trial offer is 3 months for $15, a 50% discount.

    After your new reader registered, your audience data show they are avid readers of the education stories. If there’s a story on schools, they click. Your education reporter has beat-specific newsletter with in-depth background on what’s happening at the school board, but this person hasn’t subscribed to that yet.

    You can send them a targeted email promoting the education newsletter, plus an upcoming livestream Q&A with the reporter. The prospect subscribes. Now they are clicking daily headlines and education newsletter stories, which is bumping them up against the paywall meter.

    What do you do? You add a discounted trial subscription offer right in the education newsletter. If you want to get fancy, you include that offer dynamically in the daily headlines email as well.

    Our reader clicks a link in the education newsletter that redeems the discounted offer. Let’s move to conversion!

    Step 3: Conversion

    Here’s where you close the deal. Give them the pitch they can’t refuse.

    One key point to consider: Define a clear threshold for what counts as a conversion. If you have a free trial offer and 99% of people never end up paying, is that really helping your reach your goals? I don’t think so. Consider price and subscription length.

    This will depend on your organization and your goals. As a rule of thumb, I would be reluctant to count anything less than 30% of full price as a conversion. Same goes for subscription lengths less than 4 months. Those subscribers will be tougher to retain than subscriptions closer to full price. People want to pay for things they value.

    Who is in this stage? Frequent readers. This includes the skimmers.

    Converting our example reader:

    Once a user has taken the discounted trial offer, your goal is to get them to sign up for full price at $10 per month.

    You have three months to work with. Make sure you demonstrate the value of being a subscriber (consider spelling this out in a welcome email or series of emails the moment someone has paid). Your organization is sponsoring a speaker series with area educational activists and professionals.

    A few weeks before school starts, this reader receives a letter in the mail that showcases some of the most impactful education stories you posted last school year. In this letter, you ask them to renew at full price.

    If they haven’t converted before the final month, offer a laptop sticker, tote bag or other promotional item to sweeten the deal.

    Who doesn’t want a laptop sticker to show they support a local business? They take that offer, and now you have a full price subscriber who traveled through your well-designed funnel.

    What about retention?

    Some people put retention at the very bottom of their funnel. I choose not to in most cases.

    Don’t get me wrong, if you neglect retention strategy, you are likely to end up churning through your funnel conversions. It’s a vicious, costly cycle if unchecked.

    My advice: If you have a strong handle on your churn, then I think it’s smart to include retention as part of your funnel. If your churn is in the neighborhood of 30% or higher, I think retention requires its own attention and focus. If your churn is 50% or higher, you should re-prioritize your funnel on higher quality conversions.

    What if your funnel isn’t even a funnel!

    Funnels are a tool. You should hone or adapt them to fit your newsroom goals. Unfortunately, the subscriber journey is rarely as seamless and linear as the examples above.

    In fact, people travel routes much more like the board game Chutes & Ladders. Some people zoom right through and convert easily. Other people may come in super engaged for a bit, then slide down for a few months, then come back later.

    But don’t get stuck on the idea of a “funnel” if it’s not serving your purpose. I’ve sometimes explained the same process as the process of panning for gold. Another diagram some people like is a pyramid or a ladder. This encourages you to think of what steps will help your potential subscriber level up. I’ve seen people use ladders, pipelines, and even a bowtie shape.

    The important thing is designing what Aubrey Bergauer calls the “customer-focused engine” for your team and your processes. When you align your efforts building those relationships in stages, you’ll see more impact to your organization’s strategic goals.

    Ready to put all this advice into action? See how Pico can help you build your audience business – from high-converting email popups to fully featured membership landing pages.

    Learn more about Pico

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