Two of the biggest expenses for digital publishers are subscriber acquisition and subscriber retention. Finding ways to decrease subscription renewal costs can have a huge impact on overall profitability.
For a publisher that operates at a 20% profit margin, every dollar saved in subscription and circulation efforts is the equivalent of $5 in new revenue. Extrapolate that over thousands of subscribers, and it’s easy to see why there’s so much interest in subscriber retention techniques among today’s digital publishers.
Seventy-two percent of publishers run campaigns to win back recent subscriber cancellations. What if you didn’t have to do that? How much time and money would you save?
Promoting annual subscriptions over monthly is one way to generate significant savings. Research shows that average monthly renewal rates have a lifetime of six to nine months, whereas annual subscription rates are generally above 70% in the B2B space.
Subscriber retention can have an outsized impact on return on investment (ROI) for publishers with healthy subscription programs. Whether you run a B2B, B2C, or regional publication, consider these strategies to decrease subscription renewal costs:
Top Strategies to Cut Subscription Renewal Costs
1. Try an auto-renewal tool.
The most effective retention technique is also the easiest to implement. Switch to a subscriber management platform that processes automatic renewals at the end of your subscribers’ terms. Netflix, Spotify, and virtually every other subscription service bills in this way. Digital publishers should take advantage of the same technology to increase their renewal rates and decrease subscription renewal costs.
Auto-renew billing platforms do away with the “bill me” option, and encourage readers to pay with credit cards. Automatic renewals are framed as a convenience, since subscribers don’t have to waste time manually renewing their subscriptions and paying their bills at the end of each term. Digital publishers who use auto-renewals are seeing renewal rates as high as 75% in some cases.
Auto-renews decrease the effort that publishers have to put into re-selling to their subscribers each year. Publishers who sell auto-renew subscriptions can afford to lower the price of their subscriptions, taking into account the higher average lifetime value of each subscriber. With a lower price point, you’ll be able to get more subscribers on board, and ultimately your revenue will increase even with a lower annual cost for each subscriber.
2. Post conditional renewal notifications.
What happens when your subscribers’ terms are nearly complete? With conditional renewal notifications, you can remind subscribers that it’s time to renew without sending emails or physical mail. Conditional website messages only appear on the top of your website when a reader is within 30 or 60 days of their renewal date. You can set rules to adjust the color or the messaging once the subscription actually expires. If you’re using the WordPress system, this type of conditional messaging system should be easy to setup.
3. Send automated emails.
Regardless of whether your billing and payments system is setup to process auto-renewals, you can still use email sequencing to remind readers when their subscriptions are about to expire. All of the most popular email marketing automation platforms, including Mailchimp and Constant Contact, offer automatic sequencing and email triggers. Just setup your email marketing account with an email that triggers 60 days before the subscriber’s expiration date. These automated emails should be separate from your daily or weekly email newsletters. The last one in the sequence should be sent on the date the subscription actually expires, and it should be worded more strongly than previous email reminders.
Using the Right Tools
As a publisher, your ability to decrease subscription renewal costs is directly tied to the platforms and tools you’re using to manage your business. Ideally, your cloud-based apps should all be working together, which minimizes the time and the cost associated with managing a subscription program. Even social media platforms like Facebook can be linked, so you can automatically create custom audiences for targeted ads based on your subscriber lists.
If your website is run on the WordPress platform, there are hundreds of plugins designed especially for this purpose. Most CRM and marketing automation systems now offer plugins that publishers can connect directly to their websites to automate the process of sending targeted email reminders before subscriptions expire. These systems can be setup to integrate with whichever billing and payments application you’ve selected.
To learn more about the benefits of running your website on the WordPress platform, click here.