Retention by Subtraction: How The Economist Cut Products to Reduce Churn

As publishers weigh whether to prioritize subscriber acquisition or retention, The Economist has found a way to do both. The London-based publisher recently announced it had grown its subscriber base by 9%, or about 90,000, over the last year, bringing its total subscriber count to 1,122,000. Despite a 3% reduction in total revenue, the publisher was in the black last year, generating £41.8 million ($57.6 million) in profit on £310.3 million ($427.4 million) in revenue, a 27% increase in its year-over-year operating profit. However, such gains are “impossible to achieve by acquisition alone,” Claire Overstall, the svp, global head of customer at The Economist, told Adweek. Instead, the publisher has been able to achieve such success thanks, in part, to a slew of retention strategies centered around pruning its products: call it retention by subtraction. Beginning in March 2020, and at the outset of the pandemic, The Economist made three quiet but substantive changes to its product offerings. It eliminated its 12 for £12 trial, which lured curious readers into a subscription by offering them 12 weeks of The Economist for £12, or about $17. It also eliminated its print-only subscription offering for new subscribers and migrated its lifestyle magazine, 1843, from a standalone website to the flagship site of The Economist. The Economist is not alone in its efforts to shore up its subscriber retention. Across the industry, publishers that enjoyed acquisition bumps due to the pandemic are now shifting their focus to keeping those newfound readers satisfied. As countries ease their social distancing guidelines and readers swap their screens for scenes, publishers face a challenge in keeping their new subscribers paying. While Overstall wouldn't share retention rates, she pointed to two other metrics that the team uses internally to measure retention. The trialist conversation rate, or the number of subscribers who continue their subscription from their first quarter to their second, has risen in the last year from 56% to 71%. Second, as a result of cutting and adjusting some programs, The Economist now has more incentives to offer those planning to cancel, which has helped its customer team save roughly 30% of the subscribers. “We’ve entered a new era of sophistication,” Overstall said, “both in terms of the offers we have in the market and in terms of who we put them in front of. Playing with pricing structure Like many publishers, especially during a busy news cycle, The Economist uses discounted trial offers to entice on-the-fence readers to subscribe. While its 12 for £12 product did a wonderful job getting subscribers in the door, too many of them failed to stick around. Overstall attributed much of the problem to sticker shock, as the standard monthly price for an Economist subscription is either £55 ($75.76) or £65 ($89.53), a substantial jump from £12. The Economist fazed out the 12 for £12 discount by June 2020 and began emphasizing other promotions. In particular, it offers 50% off for subscribers’ first quarter, a deal that runs continuously, and has begun experimenting with limited-time sales that offer 50% off an annual subscription. The Economist has only offered the latter deal three times, all since 2020, but it has shown convincing signs of success, said Deep Bagchee, chief product officer at The Economist. “We've been a lot more aggressive with our pricing on the annual offers,” Bagchee said, “because then we have a full year to work with you and get you onboarded, enjoying the product and building habit.” Michael Silberman, svp of strategy at subscriptions platform Piano, said that publishers across the board have seen similar results when experimenting with trial offers. “We see in our data pretty consistently that when you have a relatively high-priced product that you are offering a steep discount on for some initial period, when that period ends, a ton of churn happens,” Silberman said. Piano data shows how pivotal the first months are to subscriber retention. RIP print-only Beginning in May 2020, The Economist removed the option for new subscribers to sign up for a print-only option. For its existing print-only subscribers, the publisher upgraded their subscription to a bundle, charging them no extra but giving them gratis access to The Economist website. While print options are a great tool in a subscription toolbelt, they are hard to market and measure said Robin Re, vp of marketing at Industry Dive. “Moving readers toward digital helps their engagement and advertising capabilities,” Re added. Print subscribers who activate digital companion offerings also have higher retention rates than those with print-only subscriptions, said Silberman. “By adding more value to a subscription and simplifying the choice, you’re definitely increasing retention,” Silberman said. No magazine is an island In July 2020, The Economist officially moved its lifestyle magazine, 1843, onto The Economist website, where it now lives behind a paywall like the rest of the publisher’s content. Previously, 1843 lived on its own website, where readers could access it for free, meaning the content neither converted free readers nor heightened the value proposition for subscribers. Since relocating the magazine content, The Economist has seen increases both in its subscriber conversion rates and its engagement, Bagchee said. “We know that 40% more of our subscribers engaged digitally than they did at the beginning of last year,” Bagchee said. “That in itself is a massive component for what we believe will happen next with retention.” The Economist Is Selling Courses