Subscription Performance Benchmark Report

Piano helps publishers across the globe implement and refine holistic programs to support their organizations by diversifying revenue streams. Working with more than 550 enterprise clients and deploying experiences on more than 140 billion pageviews every month, Piano has unparalleled scale. Analyzing this data allows us to extract unique insights around customer behavior in publisher subscription environments.

This data has informed Piano’s growth and development, guiding the framework of our solution and helping us shepherd our clients to success. Every strategic decision we make is driven by our data, and we want to put the same power in the hands of other businesses.

We released some of our proprietary data industry-wide for the first time in 2021, publishing our inaugural Subscription Performance Benchmark Report on basic subscription health metrics. Those results are still relevant today, but this year we’re taking a closer look at metrics that will help you better understand what inspires conversion and retention — and what’s getting in the way.

As we dive in, we’ll start at the top of the funnel and follow the customer journey all the way from conversion to retention, exploring some of the biggest challenges media companies are facing today.

Most publishers starting out with digital subscriptions will tell you that it’s loyal users who drive conversion. It makes sense, doesn’t it? They’re the users getting the most value from your site.

The truth is slightly more complicated.

The chart above shows the number of days a user is active pre-conversion in the first year of a subscription business. Compare that to year two. In the first year, loyal users seem to drive conversion — nearly 30% of subscription conversions happen after 10 active days. But that trend changes in year two, where over 40% of conversions happen on the first day of engagement.

That’s because the nature of a subscription business changes over time. For that reason, relying only on loyal users to drive conversion can be a mistake. By exploring different tactics — promotional pricing or new features, for example — you can start to encourage more casual users to subscribe as well. And those tactics may have to change over time: the methods you use the first year of growth may not work the second, since the audience you’re pursuing may be different too.

The difference a device makes

To optimize subscription conversion and remove any obstacles in the way, you also need to consider how users are accessing your content — and what device they’re using in the process.

Consider the conversion drop-off rate by device, as shown above. The click rate on paid offers isn’t much different between mobile and desktop: 1.46% and 1.53%, respectively. The gap widens substantially, though, when you look at the proportion of paid offers actually completed. Though they make up 65% of digital audiences today, mobile visitors convert at a much lower rate — 19.7% compared to 42.4% for desktop users.

One reason for that? Mobile users are much more likely to abandon checkout at the first sign of friction.

Streamlining the checkout process to remove any technical friction between that first click and the time they abandon their purchase will help. But while friction is a strong contributor, it’s not the only reason mobile users drop off. Mobile users may also require a unique user experience (UX) and/or different communications, pricing and promotions from your desktop users. Optimizing each in turn can help you convert more mobile users.

Engaging across channels

The final factor we’ll examine as we consider the obstacles on the path to conversion are the channels visitors use to get to your site. Which of those channels should you be optimizing to improve your paid conversion numbers?

Again, this is a much more complex question than it seems.

For instance, Piano has traditionally seen that social media has very low conversion rates. In comparison, users who come directly from a home page are much more likely to convert. Despite that, though, both channels are important on your path to subscription growth. That’s because the number of channels visitors are referred by — across search, social and direct — is a stronger predictor of likelihood to subscribe than the performance of any single channel.

As you can see in the chart above, the more channels a visitor is referred from, the higher the conversion rate. In fact, a user who comes from both social and search is likely to have a conversion rate 10X higher than one who comes through just one channel. The more channels they use, the more loyal they become.

Optimizing engagement across all channels, then, will help you build connections that count — and can ultimately boost your paid conversion rates.

Take the chart above, for example. Our data shows that a significant number of registered users who later pay for a subscription make that jump quickly, often during the first 24 hours after registering. Even more convert during the first month. But the biggest portion of paid conversions from registered users — over 40% — still happens after that first month.

The question is, why? Because the bulk of those registered users have been there for a long time, it may take a promotion or a particularly enticing piece of subscriber-only content for them to finally subscribe.

It pays to test out the tactics you use, then, and target them depending on where a user is on their journey. For instance, machine learning can help you predict which registered users are less likely to subscribe so that you can target them with special promotional offers. Email newsletters can also be successful in bringing registered users back to your site, encouraging repeat visits and putting them in front of your premium content. For metered sites, this can move users towards your paywall, and for freemium sites, it can entice them to subscribe.

A key part of creating a strategy that works to convert registered users into subscribers is understanding the patterns your users follow during each time period along the way — then optimizing those conversion pathways.

Converting known users

For many media companies, registration can be an important step towards paid conversion. The chart below shows exactly how important. While the conversion rate for anonymous visitors is just 0.22%, conversion rises to 9.88% for known users.

That’s a dramatic 45X difference.

The bulk of those known users are people who initiated the checkout process, but didn’t follow through. This group of checkout abandoners is small overall, but there’s a high chance they’ll come back and complete the conversion process.

For publishers that use registration as a sampling or trial strategy, there’s generally a larger pool of registered users, but a lower paid conversion rate. That conversion rate is still significant, though, averaging 10-15X higher than the conversion rate of unknown visitors.

It’s important to remember that those numbers aren’t guaranteed, though. Simply having a user’s email address doesn’t mean they’ll automatically convert. On average, approximately 3% of registered users convert to a paid subscription within a year of registration. But the best-performing sites can have over 12% conversion and the worst performers a little over 0.5%.

To understand what’s best for your site, analyze your own registration numbers: Is registration helping build your subscriptions, or is it giving users a reason not to pay? To find the right fit for you, test a variety of options: Show anonymous users registration-only offers or the option to register or subscribe for full access, and target registered users for subscriptions. As you consider the results over time, you’ll be able to determine which approach delivers more paid conversions and higher customer lifetime value for you.

Implementing a well-thought-out onboarding process for registered users, using well-timed promotions and/or engaging subscriber-only content, will allow for continued conversion of this vital audience.

Personalized and optimized

For registered users to convert to paid subscribers, they must see value in your content. To surface appealing content, recommendations personalized to each user have proven to be a successful conversion tactic. But a major media brand may be producing thousands of articles a week, with only a few chances to put the right recommendation in front of the right user. How can they successfully scale these efforts?

The right model — from trending algorithms to more sophisticated contextual algorithms — can help. But you don’t have to choose a single method. Machine learning tools can optimize your approach, shifting between multiple algorithms to find the best balance for each user.

Our data shows that this balancing act pays off: The median click-through rate for auto-optimized content recommendations is more than 60% higher than recommendations using manual settings.

As the chart above shows, sleepers comprise over 40% of subscribers for the average subscription website.

It makes sense that sleepers churn: They aren’t getting much value from their subscription. Yet they don’t churn right away. In any given month, 90% of sleepers will simply continue to stay inactive. It’s only when they wake up again and come back that their cancellation rates soar, generally accounting for about 30% of active churn.

This makes re-engaging sleepers difficult. How do you bring them back into the fold and “wake them up” without prompting them to cancel?

One approach is to capitalize on a major news event or especially appealing content as a hook to drive re-engagement. During the first months of the pandemic, we saw the share of sleepers on our clients’ properties drop by 25%, and engaged users increased.

Even more important is to engage these subscribers before they become inactive, building habits so that they don’t fall asleep in the first place. By making your site part of their regular routine, you decrease the chance of these users ever falling asleep.

Immediate access

As we’ve already seen on the path to conversion, how a user accesses your site can be a signal of their level of engagement. Certain channels are likely to signal higher engagement than others, creating a pathway to increased engagement.

The same is true for subscribers.

A subscriber who comes from search or social, for example, is only likely to visit two days a month. A customer coming through email has a slightly better record, visiting three days a month. Direct visits to the website, though, are the driving force of subscriber engagement. The median direct subscriber will visit six days out of the month that way, far higher than any other referral channel.

Even though direct visits may drive higher engagement, multi-channel engagement is just as vital for subscribers as it was on the path to conversion. Subscribers expect a great user experience no matter where they are, so providing one will help you build the habits that keep users engaged.

It’s not enough to sign someone up and assume they’ll consume your content. You’ll need a thought-out plan using proven tactics to start forming habits early. Email newsletters, a welcome letter from the editor, a mobile app download, podcasts, subscription benefits reminders and/or a series of reminder emails over the first week and month have all proven successful with audiences.

Payment issues

Although most users churn intentionally, another large proportion of users leave due to what’s known as “passive churn”: When payments fail, customers churn by default.

Payment failure comes in two forms:

• A “hard decline” means the bank has not approved payment. This may be because a credit card has been stolen, for instance, or a card is invalid.
• A “soft decline” means the transaction failed for some other reason. Insufficient funds is one common cause.

For media companies, soft declines have a better success rate when cards are retried. Even after multiple retries, for instance, cards declined for “Insufficient Funds” have shown a high success rate. But hard declines aren’t a lost cause, either — in fact, double-digit success rates are common.

Take PayPal, for example. In the chart above, you’ll see that nearly 60% of all payment failures are a result of users disabling the auto-renew feature within PayPal’s platform. It’s active churn that looks like passive churn.

Understanding details like these can help you design strategies to help minimize churn— just like a deeper understanding of the customer journey can help you employ new methods to keep users moving through it.

As we’ve seen, users who come directly from to a website, to a website, often to the home page, are much more likely to convert. Social, on the other hand, has low conversion rates. That plays out in Piano’s last-touch data, where the biggest share of subscription conversions come from users visiting directly, followed by search (mostly through Google). As shown in the chart above, conversions coming from Facebook (the biggest social referrer) are much lower.

When you look at the first-touch data, though, the results are much different. Search becomes just as important as direct access in referring new visitors who eventually convert — and the influence of Facebook increases dramatically, to more than 10%.

Understanding these patterns and what they look like for your own customer base is key. While results will vary between publishers, they can tell you something important. For instance, social — even when it looks like it’s not converting — can still be effective in nurturing new audiences. And search can be effective in both discovery and conversion. Meanwhile, the influence of direct visits is likely to go down the further back you look, as you follow the journeys of users who were initially less familiar with your brand.