Texting can reduce subscriber churn by as much as 60%
One bright spot for media organizations in an otherwise bleak 2020 has been subscriptions and memberships. Many news organizations have had a record surge of subscribers who have found new value in their coverage during unprecedented times.
Based on existing customer data, we’ve found that organizations that use Subtext can expect a 50–60% reduction in subscriber churn. Later we will break down what this means in real $s.
The Challenge is Subscriber Churn
As the country settles into a new normal, subscriber fatigue will set in unless media organizations provide a unique and compelling suite of products. What news organizations offer now shouldn’t just be a digital subscription to our grandparents newspaper, but something different. Every organization needs a new bundle.
In the early days of social media platforms like Facebook and Twitter promised to be a space publishers could leverage to build and deepen relationships with the audience. Today, due to algorithms and trolls, the opportunity to reinforce a relationship is shrinking and even if a target audience is reached, the moment is fleeting and tarnished.
Email has also become a “go-to” means of owning and maintaining a relationship with subscribers — but with the average American having 198 unread emails, this too can become messages lost to the ether of the trash bin. The amount of time it takes to craft an email newsletter is always deflated when we consider 80% of recipients never even open it.
Texting = Loyalty. Plain and simple.
Let’s look at how texting can create loyalty and retention with subscribers. A Subtext client who is using our platform as a subscription perk surveyed 1,500+ of their text subscribers. So what did we find?
Two big takeaways
- 75%+ said they would be more likely to renew their subscription if Subtext was included.
- Of those who indicated they intended on cancelling their subscription, 60% said they would reconsider their decision if it meant Subtext was only available to subscribers.
The survey bore out: After 6 months of using Subtext, the client found that Subtext subscribers had half as many unsubscribes as the control group of non-Subtext subscribers.
The scenarios
Let’s see how this plays out in real subscriber counts over time.
Publisher A has 10,000 subscribers and is adding 1,000 new subscribers a month for 12 months. This publisher has a churn rate of 7% for long-term subscribers and a churn of 30% for new subscribers. Here’s what their growth looks like after 12 months.
After 12 months, they’ve grown about 4,000 subscribers total and we can get a general sense of their growth curve. It’s not bad. But they’ve lost a total of 6,000 new subscribers.
Now let’s imagine that same publisher but because of their use of Subtext, churn has dropped to 5% for long term subscribers and 15% for new subscribers.
After 12 months, they’ve added 8000+ new subscribers (double Publisher A’s growth). They’ve lost only 3,000 new subscribers.
What this means in $s
According to NiemanLab an average digital subscription costs around $12 / month. The delta between our two publishers is 4,561 subscribers.
For Publisher B: That’s a monthly recurring revenue difference of $54,700 and an annual recurring revenue difference of $656,700.
Our Own Subscriber Data
The customer data bares out against our own subscription campaigns too. Subtext campaigns that have their own stand-alone subscription price have a churn of around 4%. When people do cancel subscription with Subtext — they often contact us directly because they don’t want the host to know. To cancel on a Subtext host feels too much like canceling on a friend — and speaks highly to the kind of retention you can earn.
Subtext also offers campaigns that are free to the public (we call these engagement campaigns) and these have a churn of less than 2%.
What Do Customers Think?
In this survey of 1,500 subscribers Subtext received a Net Promoter score of 51. Through another client survey of a few hundred subscribers Subtext got a Net Promoter score as high as 73. For context — Netflix has a Net promoter score of 68.
What makes our customer reviews so satisfying — the praise is heralded at our clients, not to us. If the subscribers don’t know Subtext is in the background and give all the praise to you — we’re in full support of that.
If you’re interested in more customer reviews check out this link.
The Takeaways
If you’re still wondering if Subtext can help with retention — just ponder this. What’s more likely to get somebody to update an out of date credit card? You can send them a pre-written email, or a text from their favorite beat reporter.
- Texting = Reduces churn by as much as 60%.
- Keeping new subscribers = the best path for long-term growth. We know it is 5–10 times more valuable to keep an existing customer than it is to find new ones.
- Higher engagement = lower churn. It’s not the price that causes churn. The reason people leave is when a product is no longer relevant to their daily habits. In short — it’s a lack of meaningful engagement that causes churn.
- A diverse product bundle = more connections. Texting is a unique differentiator as a product. It provides a private, direct and troll-free space where subscribers are far more likely to respond. This in turn produces smart conversations, story ideas and feedback that converts to reader-centric content and behaviors among your team.
A final note
In this post we look at how Subtext can be part of a retention strategy. But Subtext can also be part of a customer acquisition funnel or a stand alone revenue generator. How you leverage Subtext depends on your goals.
This link describes the benefits of creating a subscription campaign on Subtext.
There’s never been a better time to double or triple down on retention. If you want to keep customers — here’s your chance to give them a new product that ensures unique daily engagement.
When you create a campaign on Subtext, we work for you. And if your goal is to retain existing subscribers — we’re here to help. We have a dedicated team sharing best practices and insights to help ensure that you can execute against your goals. Best of all — the more confident you become in your retention — the more ambitious you can be with new customer acquisition.
