Why news publishers need not fear the walking dead.
With subscription growth stalling for many publishers, offering a pay-as-you-go option should be a no-brainer for digital publishers. Some, though, are worried about disturbing their so-called “zombie” subscribers and prompting them to cancel. Here, I explain why worrying about the zombies can blind publishers to bigger opportunities.
Every subscription business has zombie subscribers. They’re customers who are paying every month but using the service infrequently or not at all.
How many of them do you have? How do you manage them? Some publishers avoid ever contacting their zombies, fearful of reminding them they’re paying for something they rarely or never make use of. Nearly all publishers make sure that cancelling a subscription is a lot harder than buying one. Some people will just give up and forget to try again.
That fear is understandable. Every subscriber is a guaranteed monthly payment, after all. You might be embarrassed or even a little ashamed that you’re taking money from people who get little or nothing in return, but the bottom line needs them to stay.
You might also be even more embarrassed, privately, at just how many of them there are. In a Q&A with Better News, the Arizona Republic stated that 42 per cent of its subscribers were ‘zombies’ while a separate, wider, study cited in Poynter indicated that the average in US news may be as high as fifty per cent. Wow.
That embarrassment, though, is being overwhelmed by cold reality. Many publishers are struggling to acquire new subscribers at the moment, and when they succeed they usually do so with the help of discounting. Subscribers acquired recently, in general, are less lucrative and shorter lived than the early adopters. At some point every subscription simply runs out of customers. The publisher currently offering me a 4 month trial for £0 has probably reached that point.
Which makes zombies a pretty important part of the revenue mix. But for how much longer?
Economic pressures are triggering a wave of subscription cancellations. Everyone is seeing it, even the big streaming platforms which give their users far more, in terms of time spent using the service, than any news publisher.
Regulations, too, are creating pressure, with the age-old but not very reputable practice of forcing users to make a phone call to cancel now being outlawed in various parts of the world.
Plus, we are seeing banks make a virtue of their ability to spot subscriptions in their customers’ transactions and cancel them by the simple method of stopping payments. No phone call required.
All this is set against the reality that, in most markets, fewer than 5% of the audience will ever sign up for a subscription. Many publishers have already found them all.
The game is up, it seems, for the traditional approach to subscriptions. Achieving renewed growth, or even just arresting decline, requires a different way of doing things.
A pay-as-you-go option is the best way of addressing this issue. Without the commitment of monthly payments, customers never really “churn” and they aren’t locked out. They just pay whenever they visit. If they want to stop paying, they just stop showing up. Your job as a publisher is to constantly tempt them back.
Instead of discounting your price, you have discounted commitment. This not only fits better with the current shrinking state of the market — not to mention regulatory changes — it extends your potential customer base far beyond that 5% to now include everyone who might want to dip in every now and again.
We built Axate to address this need. We’ve found from our experience, and from user feedback, that casual readers who come back often are more likely to upgrade to a subscription later. We also know that subscribers who churn are likely to remain as occasional, casual, customers. Some of them will spend more than they did as a subscriber. They’re all still customers, and every time they visit you make a bit more money.
Which begs the question: why is it that so many users — even subscribers — visit so infrequently?
That is more to do with your product than the business model. In a less committed world, your product needs to do a better job of being an essential part of its customers’ day.
Talking about that is for another article, but knowing how much opportunity can be unlocked by simply increasing frequency is a pretty exciting motivation for trying some new things.
