For businesses, subscription-based models are alluring because they allow them to predict their revenue. The more guaranteed revenue for a business, the greater its value. Since a high percentage of revenue of subscription-based businesses is recurring, its value will be higher than businesses with limited recurring revenue. The consistency in revenue allows various subscription-based companies to manage inventory and the lifetime value of customers, and offer customer pricing and leads to many other business benefits. Here are some of the most prominent benefits of subscription-based businesses: 

1. Reducing Barriers to Entry

In a changing customer market, subscription-based business models reduce barriers to entry and keep your company in line with your competitors. You do not want to be the only company offering a flat rate when your competitors are offering easy monthly subscriptions. Your final price may be even cheaper than a 12-month subscription, but modern customers are not looking to invest all at once and risk their money. The freedom to cancel anytime gives them control over their choices – they can cancel if they do not like the product/service. The perpetual model is inflexible and comes with a high initial cost and risk to the customers. As such, the perpetual model is becoming irrelevant in the face of changing customer expectations.

2. Greater Flexibility 

Subscription-based models offer greater flexibility to both customers and businesses. Customers can choose what tier of service they want. Usually, there are the basic, standard, and premium. Depending on their need, customers can choose what level of service they want. Again, this offers them more freedom to choose and control their product/services. 

Additionally, businesses can upgrade their service and add more tiers. This means they can offer the best version of their product and service, i.e., continuously improve. 

3. Build Better Customer Relationships

Subscriptions allow businesses to know their customers better. Subscriptions give businesses greater access to their customers. For instance, they can ask customers to opt for newsletters while subscribing to their product/service. Newsletters can educate customers on any new updates, new product launches, and so on. You can add testimonials and success stories to your newsletters that allow customers to feel connected with your brand. 

4. Easier to Make Big Changes 

A company is in a better position to make big changes if it works on a subscription-based model. With a subscription-based model, you are simplifying and centralizing your whole product. This means that you can scale your change more easily. In perpetual models, the old version of your product/service may still be in use somewhere. As such, making a major change is more difficult. 

The New York Times: A Success Story

In 2021, the New York Times generated total revenue of $1.36 billion in subscriptions, $497 through advertising, and $215 million in other advertising revenues. Out of the total subscription revenue, print subscriptions contributed $558 million, while digital subscriptions made $773 million. The New York Times subscription model consists of the distribution of its content across various digital and print platforms and a small part to third-party platforms.

Freemium: NY Times’ subscription-based strategy is driven by a freemium model in which it allows users to access a fixed number of articles for free and then asks for a fee to access more articles. The fee is as low as $1 per week. By 2021, the NY Times had 8 million digital subscribers.

The NY Times did not always have a subscription-based model. It shifted to a subscription-based model in 2011 by abandoning its reliance on advertising. This was a major change as news publishers have traditionally relied on advertisers. A small proportion of subscription revenue still comes from print.

The goal of the NY Times is clear: reaching 10 million subscribers by 2025. They use similar strategies – offering substantial discounts, engaging subscribers, and registering new users. The media giant is well-positioned in a digital age where its print customers are more than happy to convert to digital subscriptions. Some lessons that other publishers can take from NY Times include registering your users (they are more likely to convert to subscribers), encouraging original reporting over press releases, offering newsletters and podcasts, improving journalism quality, and focusing on areas that interest your target audience.

The power of The NY Times lies in its strong brand value that attracts users directly to its website. People trust the brand and, therefore, are willing to pay.

If you are looking to strengthen your subscription-based strategy, Publir’s unique solutions can revolutionize your marketing game. We’re experts in the content monetization space, offering a one-of-a-kind unified platform for a diversified strategy. We provide complete solutions for Ad Optimization, AdBlock Recovery, Subscriptions, and Crowdfunding. Thinking about adding subscription models to your business? Visit us here or email us at sales@publir.com to get started today.

The post Today’s Winning Subscription-Focused Strategies first appeared on Publir.

Offering a Reliable Design 

The first step to a successful subscription-based economy is offering your customers a reliable, desirable, and promising product/service that stands up to its expectations. The pricing and packaging of your product/service play a crucial role in attracting, retaining, and growing your customers. Some business strategies to optimize your offering design include – 

1. Monetizing Your New Offering: Add a new offering to your portfolio or launch a new subscription service. You need to find a sweet spot between your customer’s acquisition rate and your desired price point to optimize your pricing and marketing strategy.
2. Refreshing Your Pricing: Your prices must align with your services/products and their value. You must refresh your pricing to constantly meet the value your customers are getting from your offering.
3. Usage-Based Pricing: Some companies are adopting usage-based pricing to offer customers more flexibility. Consider incorporating some kind of usage-based pricing into your subscription model by allowing customers to pay as they use or overages, whichever is more applicable to your business. 

Subscriber’s Experience

Focus on building a customer-centric experience. Put yourself in your customer’s shoes and think about your service. Are you satisfied? How would you change it? Companies that focus on customer experience are able to draft strategies that accelerate growth. Some business initiatives to optimize your customers’ experience include:

1. Onboarding and Engagement: Customer relationships are the key to the success of subscription-based models; therefore, you need to monitor and intervene if your customers are becoming less engaged. This requires regular communication to understand how they are using your products/services and comprehend the value they are getting from their subscription. You want to analyze the data based on the rate of expansion or churn. 
2. Building a Seamless Renewal Experience: For subscription-based models, the renewal rate is the heart of a successful business. You want to ensure that your customers are able to renew with ease. There are options for auto-renewal, promotional renewal offers, and evergreen subscriptions which save customers the hassle of renewing again and again. 
3. Multiple Payment Options: You need to catch up with the different modes of payment customers prefer. Offer multiple payment options like Direct Debit, Apple Pay, PayPal, and various different local methods. Often the absence of the customer’s preferred payment method drives them away. 

Type of Financial Model 

Sketching out a comprehensive financial model can give you control over your growth model and recurring revenue. Subscription-based models bring new risks into financial reporting; thus, businesses need a new form of financial control, reporting, and processes. Some business initiatives for adopting financial processes and metrics include:

1. Automate Audit Controls and SOX: Automate your internal controls and processes to avoid non-compliant or fraudulent practices and remain accountable to the general public. The Sarbanes–Oxley (SOX) Act is a US requirement, but some principles apply universally to improve various aspects of your corporate disclosures. 
2. Track Various Business Metrics: Track different business metrics for subscription-based models like annual recurring revenue, annual contract value, net retention dollar, and many more. Tracking will help you improve the time and effort it takes to generate subscription reports and operational management. 
3. Automate Revenue Recognition: Automate the processes that scale and recognize your revenue. This will drastically reduce the costs, error risks, and effort. Often manual revenue recognition and reporting generate errors. The processes are more costly and prone to inaccuracy. 

Business Operations 

Often the order-to-cash cycle is more complicated for subscription-based companies because of their complex and ongoing order-to-cash cycles as customers continue making changes throughout their subscription cycles. For instance, each upgrade, overage event, and subscription change can drastically impact collections, billing, reporting, and revenue. As such, you need to invest in business operation processes that can scale with various changes in cash-and-order operations as the number of subscribers and level of complexity increase. Some business initiatives that can help you improve your operations include – 

1. Minimize Unintentional Churn: If you are a business with a large volume of electronic payments, even a small percentage of failure can lead to a huge loss. Setting the right payment gateways and providing appropriate payment options minimizes unintentional/involuntary churns that happen due to payment failure. 
2. Streamlining Business Operations: Standardize new billing policies, manage seasonal spikes, monitor overages and drive more efficiency to cut down the costs, time, and effort investment. 
3. Maximize Collections: Ensure that you have robust accounts receivable processes to avoid any revenue leakages. Some methods to prevent leakages include automated credit card updaters, dunning workflows, and so on. 

At Publir, we are experts in digital monetization committed to your sustained and diversified revenue growth. Our unique platform performs a variety of tasks like authenticating user emails, updating expired credit cards, managing card payments and automating all features of the management service. With our best practices and automation tools, you can engage your customers and effectively collect recurring revenue. Thinking about adding subscription models to your business? Visit us here or email us at sales@publir.com to get started today.

The post Building a Subscription Model first appeared on Publir.

Once they gained popularity on the internet, they adopted an ad-supported model. Advertising remains by far the most important source of revenue for digital news media. 

Changes in Online Viewership with Subscription

This ad-supported model was soon monopolized by tech giants like Google and Facebook that had accumulated massive scale and vast data on audience behaviors. 

The Growth of Subscription Models

Financial newspapers, such as the Wall Street Journal and the Financial Times, have often used a subscription model, with only a few stories available for free. People were required to pay for financial content but not for general news such as politics, sports, and news. However, as ad sales fell, the New York Times and other national publications followed suit.

Subscription Growth of Major Newspapers

Digital subscriptions are now an important revenue source for many major news outlets. The New York Times had over 6 million paying subscribers at the end of 2020. This number was up 3x from 2016.

For the same time period Washington Post’s subscriber base was estimated to be nearing 3 million, up nearly 50% from the end of 2019.

Encouraged by the impressive growth reported by large media outlets, many smaller publications have also adopted the digital subscription model. .

Although charging for content may decrease site traffic and result in lower ad revenue, for some publishers the trade-off may be worthwhile. Audience engagement and brand value improves because readers have shown enough interest in your material to pay for it.

Strategies for a Successful Subscription Offering

Subscription-based websites should concentrate on increasing long-term consumer satisfaction rather than focusing on just attracting a larger audience with click-bait headlines.

For smaller websites just venturing into subscriptions it may be useful to have a soft paywall that allows users to read a few articles for free. For instance, you can allow non-paying members to read 5 free articles a month. But once they reach that threshold, they would have to pay to read more articles.

Another successful tactic is to keep the articles free but offer meaningful perks to subscribers such as ad-free access, the ability to comment on articles, or the ability to contact the author directly.

A big factor in any recurring-revenue model is subscriber churn. Proactively engaging with subscribers via polls/surveys, keeping them informed of site changes, and offering value-added services are good ways to reduce churn. Offering the opportunity to pause rather than cancel subscriptions is another useful tactic.

Major Subscription Service Providers

Some of the top subscription management software are Podia, Payhip, Subbly, 2Checkout, Aria Systems, Salesforce Billing, SaaSOptics, Cleverbridge, Chargify, SAP Commerce Cloud, Elastic Path, Zuora, FastSpring, OneBill, NetSuite SuiteCommerce, Ericsson ECB, goTransverse TRACT platform, Vindicia, Reilly, Recurly, Pabbly, Chargebee, and ChikPea O2B.

Publir’s Subscription Offering

Publir subscriptions encourage your readers to pay a small monthly fee for a clean, ad-free experience. Our tool automates all essential aspects of a subscription management program, from authenticating customer addresses to handling credit card purchases and replacing expired credit cards. Furthermore, our product combines lessons from popular subscription offerings on a daily basis, maintaining fast growth and low churn.

Dozens of publications use Publir’s subscription tool, which has an established track record of driving growth and reducing turnover. In order to maximize sales, we also use our ad industry experience to advise clients on optimal pricing and Zero-party data techniques.

Conclusion

In an era where issues surrounding ad tracking and data security are gaining traction, many online news consumers realize that “free” content has a price – their privacy. Not surprisingly, the demand for subscription and billing management is projected to rise from USD 2.90 billion in 2016 to USD 6.01 billion by 2021. This number will only increase as there is a growing number of readers who are willing to pay for good content.

The post Adding Digital Subscriptions to Your Revenue Stream first appeared on Publir.