Getting to the bottom of why subscribers lapse

It’s one of the more obvious things on the agenda – is this product performing as well as it can? And a crucial indicator of that is the renewal rate. But it’s one thing to know that the renewal rate is slipping — or just as commonly — not quite up there with other products in your portfolio. But what to do? And how to do it? Valuable insights are all too often obscured by vague responses and inappropriate methodology.

Indeed, some of the most valuable research we’ve conducted for our clients has been in this area. In one recent instance, it prompted the setting up of a product task force to undertake a significant review of the editorial strategy and assess the implications of print and online integration. This article describes the process we used to get to grips with understanding what was going on.

Does this sound at all familiar? A sequence of five letters has failed to do the trick for the awkward squad of subscribers and now they’re onto the grace issues. The telemarketing team add as much value as they can with this recalcitrant lot. If the subscriber hasn’t been convinced by the end of the script, then there are those last few final questions. As a fly on the wall, it might sound a bit like this:

"Can you tell me what the main reason is for not renewing?"

"Well, I just don’t get round to reading it half the time…" (Or even more obliquely: "I’m having to cut a few costs at the moment…")

And if you’ve got them at the wrong moment and received a blunt "No" for the efforts to re-subscribe and be rewarded with a pocket diary, it just might be a morale-sapping "…you just don’t get it do you?"

Soon afterwards, an Excel spreadsheet comes in from the telemarketing agency that’s been tasked to extract that extra 5% uplift from your renewal series. So as our intrepid marketer looks down the results, she might well find that:

* 22% say it’s too expensive / budget has been cut
* 19% feel it is not relevant enough to their needs (with a wide range of disparate topics in the ‘other’ column)
* 15% have retired or changed jobs / left company
* 13% don’t have time to read it
* 7% get everything they need online
* 6% have experienced problems renewing with their credit card

So what to do? Do you embark on a conversation about that ever-lengthening list of topics that editorial should be covering? And what about those who say it’s too expensive – does the price need looking at?

1st rule: don’t take what you’re told at face value

Let’s rerun that telephone conversation with the customer again. But this time, place yourself in the customer’s shoes.

It’s 3:30 and Lisa is due into a meeting in five minutes. These people have phoned on two previous occasions. She decides to accept the call. After reaffirming that, no, she really doesn’t want to renew with her credit card right now and that, no, the pocket diary would not make a difference, she’s asked why she no longer wants the magazine. She’d hardly looked at it over the past three to four weeks. In fact, the most recent one was in her in-tray still in its polywrapper. "Well, I just don’t get round to reading it half the time…"

True enough. But the problem with this is that it’s a logic trap – in other words, it’s a symptom, not the cause. It leads you, the marketer, down a cul-de-sac of non information. Crucially you have to get beyond that, but too often the questioning stops there having received an ‘answer’. It would be nice to know, for instance, that many of the articles that interested her ended up just telling her the points that she already knew and didn’t provide her with what she yearned for – the implications of this latest change in government policy for her business. News by itself just doesn’t cut it for her.

The reason for this is simple enough. Respondents often find it very difficult to articulate something they’ve not thought about that much. When was the last time you thought of a cutting riposte to the sneaky aside that was thrown at you — seven hours later when you were smouldering in the bath? The brutal fact of the matter is that your magazine just isn’t at the centre of her life. In fact, it’s so peripheral with everything else that’s going on that Lisa simply hadn’t given this much thought before being asked.

The traditional discussion guide / questionnaire approach does little to overcome these false assumptions and logic traps. Hence the reason for "Not enough time" or "Too expensive" being erroneously attributed to lapses in purchase. It needs a completely different set of research techniques to get you below the surface.

2nd rule: follow the respondent, not a script

The key to success in any lapse research is to encourage people to talk through their experiences. For this to work, the research needs to be fundamentally open-ended in nature starting with an understanding of readers’ priorities and capturing any changes in job that may have dictated different needs, before coming onto the magazine itself. It’s rare that any two conversations will follow exactly the same path. So the telephone researcher needs a mental map of the discussion topics firmly in mind rather than a rigid script. This allows the research to truly follow the customer’s lead.

It’s important too, to capture reasons for lapse in phases. Start off by asking the customer about why they feel they no longer need your magazine. But then take them through different elements of the product offering so you can start to trace back from the effect, through any layers of abstraction, to the primary cause. You may wish to test any hypotheses you have and understand the relevance of these factors to each respondent as part of this process. Finally, the researcher needs to review the discussion with the respondent, allowing them to pause and reflect. This will often result in a more considered and nuanced viewpoint from the one voiced at the beginning of the research.

It goes without saying that this all requires a fundamentally different skillset from telemarketers whose key deliverable is to convince customers to buy. It also needs time to develop this conversation. It can’t be tacked onto the back of a script.

3rd rule: place your lapsed readers into context

In the majority of my talks with publishing houses, lapse activity would seem to be undertaken in isolation. It’s not difficult to see why.

Customer retention is a crucial aspect of any good direct-marketing based organisation that seeks to maximise lifetime value. It naturally flows that customers can too often be seen as conforming to a similar set of traits. In experience, this is rarely the case.

With B2B in particular, it’s tempting to gauge and evaluate your readers purely within quantifiable categories such as industry sector or job function. It’s easy to lose sight of their behaviour as consumers with all the complexity this entails; never more so than in an increasingly fragmented and complex information world. So, although it adds to the complexity and expense of the exercise, make sure you have a matched sample of satisfied customers to measure your lapsed traits against. Which elements of dissatisfaction are reflected here? Only in that way can you start acting in a preventative rather than reactive way.

I would argue that probably the single biggest error would be to act purely on information from lapses alone. This information will be derived from, say, 20% of your customer base. Do they share the same characteristics as the rest of subscribers — not just demographically — but attitudinally?

Recognising the value of investigating renewal lapse

As I suggested at the beginning of this article, undertaken properly this type of research can prove to be incredibly revealing. We find an increasing demand from publishers for this type of work. Across the past two years it has prompted a number of changes including:

* Two strategic reviews to maximise important competitive advantages and swiftly react to unforeseen weaknesses.
* Re-evaluating the areas in which the website and print editorial coincide and changing the emphasis across a range of topic areas.
* Informing the marketing department on priorities for subscriber recruitment: which elements of the package are crucial to renewal and how this varies across particular customer segments.
* Editorial priorities: not just topic areas, but specifically where value lies in different types of story — news, features, special surveys etc.

Getting to the bottom of why your readers are lapsing is crucial to the health of the product. Without this exercise, the early warning signs of a fundamental product problem or market change can go undiagnosed. But lapse research needs care, diligence and an appropriate skills set. But it needn’t cost the earth — typically around £5,000 to £7,500 depending on the parameters. And, set within context of lifetime value, the ROI can be quickly realised.