As subscription models continue to grow in popularity among publishers, paywalls are a popular tool to make this strategy a success.
As with everything, unfortunately there is no single paywall model that will magically convert all users into subscribers. Difficult, measured, freemium – the challenge for publishers is to choose the model that best suits your audience.
But why should a single model work for both passing visitors and your most engaged readers who consume content daily?
The reality is that this is not the case.
In fact, the optimal strategy is one where audiences are put at the forefront of your strategy – which makes sense if you remember that we’re talking about a “reader revenue” model here.
Instead of trying to find the “best paywall model”, look at your audience, segment them into engagement groups, and present each group with a suitable journey that is most likely to convert them to a subscriber in the future.
Segmentation
First, segment your audience into groups based on engagement level: how often they visit your site and interact with your content.
Swimming pool Native segmentation divides non-subscribers into four groups – Volatile, Casual, Regular and Fans – based on recency, frequency and volume score. Recency is the number of days since a user last visited a site, Frequency is how often the same individual visits, and Volume is the amount of content consumed and/or number of actions taken.
We may also add an Anonymized Audience Members who have created a free account but are not yet subscribed group, if this is an option on your site.
Create a “journey” for each group
In a second step, build routes adapted to each segment.
You might be wondering how it is possible to know in advance the best route for each group?
Well, you can’t know for sure. But that’s why we encourage launch, test and learn approach.
throw first
Since conversion is more likely to happen when you strike the perfect balance between frustration and engagement (paywalls can be the source of frustration but also the reason a user converts), you can use a model “softer” for less engaged audiences and “harder” for your most engaged users.
For volatiles, we recommended forgetting about paywalls for now and just aiming to increase engagement through smoother forms of conversion. A newsletter wall, for example, is extremely valuable, asking a user to sign up for your newsletter in exchange for access to content. This enables on-site content discovery and off-site (email) consumption of additional content.
Once they return to your site on a regular basis, these users become Occasional and then Regular, where you can focus on de-anonymizing via a sign-up wall to convert them to members.
This not only increases engagement, but also improves their experience on your site (through personalized account space, additional features, etc.), and allows you to collect first-party data as well as increase revenue advertising through targeting.
A registered user is also much more likely to subscribe in the future, as evidenced by our research.
Alternatively, you can directly try to convert these users into paying subscribers. In this case, we recommend using a more flexible paywall model, such as a metered wall, to enable content discovery and engagement to offset frustration.
Fans, your most engaged non-members or subscribers, will be less frustrated when presented with a tougher paywall model, so this approach may prove optimal for conversion rates.
However, we still recommend encouraging signup as a soft conversion step before presenting a paywall, making them two to ten times more likely to sign up.
The New York Times, for example, first presents visitors with a sign-up wall, giving them access to an article for free, before blocking it out completely with a paywall.
Signing up also allows you to make the most of onboarding journeys to increase engagement, such as encouraging users to sign up for your newsletter and getting the most out of UX features including registration of content for later or to follow specific topics or authors.
Test and learn
A/B testing is your best friend for optimizing conversion rates, allowing you to compare the performance of two different walls or user journeys in each audience group and eventually employ the one that converts the most users.
You could, for example, test a sign-up then paywall journey versus one that involves paywall only, just like ELLE magazine.
What does this mean for your KPIs?
Since readers are now at the heart of your reader revenue strategy (now makes sense!), you should move from tracking overall user-to-subscriber conversion rates to measuring ARPU (average revenue per user). ).
Why move away from conversion rates as a KPI? Because this metric was originally designed for the e-commerce industry, where the buying process relies much more on impulse decisions. For publishers, engagement before the paywall is critical for conversion.
This means that the focus should instead be on increasing ARPU, moving users through a journey from engagement to subscription.
ARPU can be calculated for each audience segment based on the value of actions and soft conversion steps performed by your users.
First, assign a monetary value to each engagement or soft conversion stage. This value may well be fake (like our chart below) and not based on actual revenue, but the important thing is that you can track ARPU and understand the evolution of a user’s value to your business over time. as it moves through the tunnel.
For instance:
- Visits more than once per month = $2
- Subscription to your newsletter = $8
- Create a free account = $101
With ARPU as a north-star metric, you’ll see the value of all the little engagement and conversion steps rather than just focusing on conversion rates, which we now know isn’t optimal. for a digital publisher’s reader revenue strategy.
But be aware that your ARPU will likely resemble the Pareto principle or the 80/20 rule. The Pareto principle (80/20 rule) states that for many outcomes, 80% of the consequences (results) come from only 20% of the causes (efforts).
In the context of reader revenue, this means that 80% of your overall ARPU will come from just 20% of your audience.
The data below (actual data this time, of a Pool study) shows how volatiles make up the vast majority of your audience, which we can relate to prior knowledge of these users’ low ARPU value.
Fans are much more valuable but only represent a very small percentage of your traffic. This can also be said for registered members and subscribers.
Summary
That’s a lot to take in, but understanding your audience and your engagement strategy before the paywall is critical to a successful subscription strategy.
In short:
- Move away from a rigid, one-size-fits-all paywall model to focus on your audience
- Build engagement and conversion journeys tailored to each segment, seeking to gradually move the user through the funnel towards subscription
- Launch first, test and iterate
- Put ARPU at the heart of everything you do – the value you place on each engagement or conversion stage doesn’t have to be real, but it will help you track and optimize your strategy, directing users to subscription
- Final note: don’t underestimate the power of free registration before introducing the paywall!
Magdalene White is Head of Content Marketing at Swimming pool, the audience conversion platform for digital publishers to convert anonymous users into leads, members and subscribers. His work focuses on revenue, engagement and conversion strategies for digital content producers.
Free daily newsletter
If you like our news and feature articles, you can sign up to receive our free daily (Monday-Friday) email newsletter (mobile friendly).
