Media organisations will struggle to hang onto new subscribers unless they have a strong understanding of what drives engagement. This was the key message from Aled John, Deputy Managing Director of FT Strategies, when he appeared on a recent episode of the We Like Mags podcast.
FT Strategies is the consulting arm of The Financial Times born out of organisations asking the FT for advice on how they could transform their operations in the face of an existential threat. The consultancy uses the key learnings and best practice from FT’s own journey towards more diverse revenue models that are not so exposed to advertising to guide publishers, streaming providers, arts organisations, financial service providers, and many others.
“What FT Strategy does is it distills that best practice and the expertise around strategy, around operations and execution, in terms of transforming your organisation to becoming much more digital first, much more resilient to existential shocks,” John told hosts Christian Kallenberg and Benjamin Kolb, CTO and founder of SPRYLAB technologies.
“Partly that’s focusing on reader revenue or customer revenue and really understanding what needs your customers have and tailoring your product and you’re offering to those needs.”
Turning to the work FT Strategies has done with recurring revenue businesses, which often have a specific target for a number of subscribers in a set time, John stressed the importance of engagement.
“The key learning from the FT’s own journey is that you could theoretically try and acquire many customers over a period of time, but you’re not going to keep them unless you have a very strong understanding of what drives engagement. So, retention is the name of the game,” he said.
“Obviously you need to acquire and you need sophisticated approaches to how you can acquire the right type of customers for your offering of your business, but you need to be thinking about retention from the point that you acquire customers. You don’t think of retention just at the point of renewal or just at the point of cancelation. Because if you’re thinking about it then, it’s too late.
“So, the FT invested significantly in understanding patterns of engagement with its subscriber base and its non-subscriber base as well, and how engagement specifically correlates to things like retention rate, acquisition rate, lifetime value, and more besides.”