How to bring ‘zombie subscribers’ back to life and reduce churn

The header image shows an illustration of a hand holding a phone that says "Subscribe?"

Felix Danczak, COO, Zephr

The pandemic changed the trajectory of media subscriptions dramatically. In April 2020, Mather Economics reported that online subscriptions rose nearly 200% compared to 2019. The cause was two-fold: Readers were spending longer searching for and ingesting news related to the outbreak, while the majority of offline, out-of-home pastimes were shut down.

As parts of the world begin to move back outside, these subscribers are increasingly disengaged, taking their attention elsewhere — dinner out, the movies, etc. — and therefore pose a significant churn risk. These inactive subscribers are “zombie subscribers,” and they are becoming a real scare for publishers’ bottom lines. Here’s why they came about, and how to deal with them.

The rise of zombie subscribers threatens publisher revenue

Long-term subscriptions are built and sustained through a constant delivery of value. That’s the main difference between repeat purchases and one-offs. But as customer preferences change quickly, the balance between value and price is delicate. 

The sweet spot for the price of a subscription and the value it offers to the customer is all about alignment. Last year, with everyone stuck in quarantine, the value of a digital subscription was sky-high, and considering the lower price point, it’s unsurprising that so many more people purchased them. In 2020, Netflix added 37 million paying subscribers and The New York Times added 2.3 million new digital-only subscribers. 

Fast-forward to 2021 — consumers are now more able to spend money in-person rather than online. So, the value of online content has come down, creating a gap between perceived value and price for many who subscribed during quarantine. 

These subscribers are the walking dead — i.e., they are disengaged — and the moment they’re asked to resubscribe, they’ll churn. However, their future subscription revenue has already been built into financial models with a 24–36 month lifetime value. The money is already being spent and it’s creating big risks for revenues and publishers’ bottom lines. This process is already underway: Traffic to publisher sites is down about 27%, losing them two years of growth.  

Deliver consistent, relevant value to justify subscription rates

Many subscription businesses have fought the war against the undead — their churn risks — with traditional tactics, such as discounts for resubscription, free tote bags or gifts, refer-a-friend bonuses and so on. Unfortunately, these approaches miss the mark. 

Even if these offers help get readers through the door, a tote bag won’t keep them engaged and paying for months to come. The only way to retain customers is through consistent, relevant value — meaning new, genuine value each and every month to justify the continuation of subscription payments. 

To deliver consistent, relevant value to readers and re-engage zombie subscribers, the answer lies in personalizing the subscriber experience.

For publishers focused on content as a product, the subscription experience covers everything from the articles the readers see to the offers they are given, including the following steps to optimize audiences’ digital experience:

  • Leverage first-party data collected on registrations to cater to each audience’s preferences, including online activity and relevant personal information. 
  • Connect data sets to deliver personalized offers across all touchpoints, including email marketing and on-site pop-ups.
  • Iterate and A/B test messaging and offers to increase conversions using a powerful subscription experience platform
  • Segment readers by content interests such as sports, news and politics, and offer them more of what they already consume.
  • Localize pricing and packaging to deliver value to each market, including adjusting for geography or demographic.

Personalization increases value for subscribers and reduces churn

The results of realignment? Renewal, retention and revenue.

Personalization enables direct value realignment, over and over again. And with the right tools, this is achievable at scale. One-size-fits-all experiences no longer cut it for digital audiences, but an infinite — or at least, highly segmented — array of subscriber journeys keeps readers engaged and paying.

It is worth investing in, too, considering it costs between 5 and 25 times more to acquire a new customer than to retain an existing one. As publishers enter a period of engagement drop-off, they must maximize the subscription experience for all their readers, particularly the zombies that pose the largest churn threat. 

Publishers who understand their audience and their incentives will be able to provide consistent, relevant value for consumers, aligning the value offered to subscribers with the price charged over a customer’s lifetime. 

Personalization raises the value of an experience, and this is the best retention strategy for news and media. It leaves readers with a lasting impression that keeps them engaged and subscribed. Net new subscribers may look like an indicator of growth, but increased churn will surely wipe out these gains. The path to genuine long-term revenue and profit growth lies in re-engaging churn risks, and bringing those costly zombies back to life.

https://digiday.com/?p=425227