Content Alone Won’t Grow Your Media Subscription Business
Make sure you measure these 5 KPIs
A digital product that is selling media, compared to a retail transaction or even a B2B service, exists in its own special kind of growth hell. You are not just asking people to spend on you once, you are asking them to do this over and over again. You need customers to give you a monthly subscription fee, and also spend their limited attention on your product. How can you compete in a crowded and noisy space, and deserve that share of mind? While the right media is your foundation, setting and managing to the right KPIs across your customer journey is absolutely critical.
A Guiding, Primary KPI
Set a guiding, primary KPI, and track a suite of metrics across acquisition, activation, engagement, retention, and user experience touchpoints.
Your number one KPI should be the metric that most describes the customer behavior your product is trying to achieve, in terms of the revenue it drives for your company. Take a metric like weekly users, for example, and assume this is your pick for a guiding metric. If you want to maximize this, you could spend a fortune on marketing and drive new sign ups. But what if these new sign ups cancel their service only a few days after?
Instead, you need a primary KPI like weekly active users with 3 or more video streams. Your own data will show you new sign ups with this behavior, whatever the level that is specific to your business, are more likely to keep subscribing.
Analyze your current customer behaviors, and identify that core engagement behavior that differentiates between a customer who stays compared to a customer who churns. This will be custom to your product, and your media type.
Acquisition
Think of this set of KPIs as describing your reach. Your basic metrics will tell you just how many users are actually interacting with your product. Quantify daily/weekly/monthly users, and make distinctions between new and returning if possible. Measure users with multiple sessions, or those who try once and abandon.
These will be helpful descriptions of reach, but you also need to start to optimize it based on other measures. Many of your users will be driven to your product by marketing. Each channel you spend on should be summarized according to spend, and how many users you can say signed up because of that touchpoint. This will allow you to calculate cost per acquisition, or CAC. You will need to determine your attribution approach, whether it is a last click model, a media mix, or a multi touch framework, but the resulting metrics should be summarized.
Change your channel mix to drive more engaged users with the same spend by shifting from low value to higher value channels.
Make sure that you also understand the process, and possible pain points, around the sign up process itself. If your marketing is successful, it will drive potential users to either a purchase flow or some kind of registration. Create metrics around these sign up conversions. How many people get to the first page, but drop out by the time they have to enter their credit card? How many people are creating accounts, for instance, but never actually launch your app?
These KPIs will help you understand if there are drop off points in a critical user touchpoint, and help prioritize where you may need to do more work on your UI or value proposition.
Activation
Once a customer has signed up for your product, you need to understand and quantify how well you are doing at convincing them to stick around and actually pay for the first time. We can call this activation. In the case of a product with a 7 day free trial, for example, identify behaviors that are most indicative of whether or not someone actually starts to pay at the end or not. Do they watch more than one series? What kind of device do they use? How long are the podcasts they are listening to, or how many songs do they stream?
Tie the KPI to a threshold that matters.
Instead of an average of 4 articles read, re-engineer to show percent of new users reading 6+ articles. Set the threshold where your data indicates someone is more likely to keep using your service. Again, these behaviors will be specific to your product, but the process and KPIs are the same. Build metrics around the behaviors you find to matter for a trial conversion, or past the first subscription payment.
Engagement
While it’s been hard enough to reach new users, sign them up, and get them to stick around past a few trials, you now have to make sure you keep engaging them. You need to measure how they use your product, and what they want to see, use, read, stream or play with.
Let’s ask a few clarifying questions. How many sessions does a user have each day or week, and how long are they? How many different pieces of content do they access in each session? What are the top content types they start? Are there articles, songs, games, movies, the users start, but don’t finish? How long does it take a user to find something to read, watch, or listen to from the start of their session? Compare this time to discovery with actual time consuming content.
Measure these session related metrics to look for points of friction in discoverability and consumption. The leading content will give you better ideas around new development or acquisition.
Retention
Even if you reach new users, sign them up, and keep them engaged, eventually many will leave your product or service. You need to understand just what proportion of users are becoming inactive or not paying for each cycle. Additionally, you should understand how this trend looks for each new cohort of users that sign up.
Consider a KPI that shows monthly retention of all users who sign up in Month and Year X. If you have a monthly subscription payment, indicate what percent of the users are still active at the end of month 1, month 2, month 3 and so on.
Each month of sign ups should have its own tracking so you can compare how long everyone you signed up in August, let’s say, stays a customer, with everyone who signed up in September. If 90% of the August group was still paying by month 3 (November), but only 50% of the September group was paying by month 3 (December), you could evaluate what you did different in September from a reach perspective. Did you significantly change marketing channel mix? This gives you a chance to re-optimize.
A user’s likelihood to convert after a trial, and retain over time, can be summed up by a customer lifetime value.
This is a crucial KPI, and really reflects activation, engagement, and retention outcomes in one number. Strive to develop this measure over time, and identify more behavioral and marketing patterns that can maximize this.
Last but not least, you should be sure to measure and track your product’s actual delivery and operations performance.
You can find, activate, and retain users, but if your app constantly crashes, is not available on their preferred device, or generally has content loading errors, you will not retain your customer base.
Users don’t often sign up for your great technology platform, they just want to read, stream, or listen to something! They will leave though, if the platform continually creates friction in their experience. Identify KPIs that track these errors, especially those that affect the customer experience directly. Put plans in place to size and mitigate the impact of this friction, especially if you see increasing levels of errors.
Putting It All Together
Your product will undoubtedly have nuances that will require you to customize your KPIs. If you are asking someone to pay you on a recurring basis for the media you provide, however, you have to design your KPIs around their experience. Consider how you reach them, how they sign up, the critical first impression period, and their ongoing experience. Use KPIs to make changes to your marketing, purchase flows, content decisioning, UI/UX, and your technical platforms. Finally, constantly evaluate your KPIs, and make sure they are truly indicative of acquisition and retention patterns in your evolving product space.
Use this data as another tool, along with marketing, your platform, and your media itself to create an experience that delights your customer and grows your business.
