IS LIFETIME VALUE DEAD?

I had an interesting conversation with a publisher recently who fought very hard against putting his content on Readly. He argues that he knows his audience of today; they’re obsessed with the print product and therefore aren’t interested in any digital edition – wherever that can be read.

His argument is not new. When it comes to subscription models, one of the key touchstones in our industry has always been Lifetime Value. During my time in subscription marketing the focus was on retention, because ‘it’s cheaper to retain than acquire.’ What we weren’t considering was what happens when those that you are retaining, disappear?

Having had this conversation with the publisher, Robbie Kellman Baxter’s book, The Forever Transaction resonated hugely with me. If you’ve not read any of Robbie’s work, she is a mastermind on subscription pricing and membership models. Her stance on the subject is that we are in an age of the Membership Economy where “forever transactions” – whether driven by subscription, community, loyalty programme or fan club – are where all forward-looking businesses are heading.?

But in an increasingly complex media world, are our old LTV models are becoming useless? As audiences are fragmenting, consumer touch points are increasing, ecommerce is growing, and customer acquisition journeys are getting longer and more expensive, the real LTV of each reader is becoming complicated now that so many factors must be considered for the model to mean anything at all.

Content providers talk a lot about being customer-centric, but what are they doing to capture the customer of tomorrow? You may be serving your audience so well now, that you are ignoring the audience of the future - my publisher friend’s argument is a prime example. Like many content providers, he doesn’t seem worried about ageing cohorts and he’s not thinking about how relevant his product will be to the next generation of his audience. The truth is that audiences of many magazine brands are shrinking and ageing at the same time, as younger readers are not coming on board fast enough to replace long-term customers. This really does impact on LTV and is a widespread concern among a lot of news and magazine publishers.

Age on its own is a very simplistic measure

More nuanced is life-stage; what is happening in their lives can cut across age bands more significantly than we often think. After all, today’s 40-year-old is like a 30-year-old in our parent’s generation. Robbie uses the working mum as an example. The working mum of today is unrecognisable to that of previous generations and their reading habits have completely changed.

Yet age is massively important. Younger age-groups, particularly Generation Z, are wired differently in a number of ways.?They tend to have a more positive and optimistic view of the world and dislike bad news and cynicism.?Their facility with tech is instinctive and unquestioning, and switching between tasks and paying simultaneous attention to a wide range of stimuli comes naturally to them. They want interactive, two-way conversations and are more visually orientated. More than ever, they want to be treated as an individual.

Yet the downside is that they often have less disposable income and are more frugally minded than their elders.?A smart LTV model will highlight a common truth – that older readers usually deliver the most revenue to the publisher.?They still have more of the time, spending power and attitudes that make them much more “monetisable” than younger groups.?Simply cutting the price – the shortcut route to volume growth generally and to Generation Z specifically – can be damaging to the brand and its profitability. We have to be savvier than that.

Trying to shoehorn different age groups into a single magazine title may simply overstretch the core brand, which may lose its focus or distinctive tone of voice. It may also alienate existing, happy and profitable customers. For many publishers, the portfolio approach – different products for different reader subgroups under an overarching brand – is a much safer way forward.

Refreshing the brand

?SheerLuxe is a fantastic example. Having launched in 2007 as a directory of online retailers, it’s now one of the UK’s leading online fashion and lifestyle publishers, delivering daily online content, newsletters, podcasts and videos. They listen to what their readers want and create customer-centric products that engage the reader on his/hers preferred platform. Multiple content verticals means that SheerLuxe’s audience is vast – in addition to the core brand which has an audience that is 96% female and made up of 25–55 year olds, they now have SL Man, The Weddings Edition, The Parenting Edition, The Gold Edition and LuxeGirl. As an organisation, SheerLuxe has considered both age and life-stage when building their collection of content products.

The Economist is one doing it well. It has long been in the business of trying to capture Tomorrow’s Reader – it virtually invented the cut-price student subscription years ago along with Time and Newsweek.?Yet it has taken its youth engagement strategy to another level in recent years. The key is a growing presence on social media, where it has four main channels….

Twitter is the “radio station” surfacing headlines.

Facebook features a tightly edited range of analytical pieces.

Instagram has longer and chattier pieces with a strong visual element – initially photos, but now video, and animated charts & illustrations.

LinkedIn is conversational, but business-like.

The content is tailored for each channel – not changed, but “reinterpreted”.?And the presentation and tone-of-voice are tweaked, but within the overarching brand values.?The magazine’s journalists are then constantly sharing with their own network of contacts.??

This activity is driving younger consumers to a place where they make a deeper commitment or pay some money. They feed into a constantly refreshing audience pool and then come on to a very sophisticated LTV radar.

The principles are simple.?The execution is not.

The experience of the smartest “brand refreshers” underlines a number of practical questions behind the principles.

Do we really understand what our readers want??Detailed research and interactive panels are a common start point.

Do our own staff really understand and live the overarching values and tone-of-voice of the brand??Internal communication usually needs to be improved.

Do we really have the range of channels and contact points to be relevant to each of our audience segments??We need the metrics and tech to track it all – contact points, engagement levels, decision moments, monetisation opportunities.

Redefining Lifetime Value

The links with our readers have never been more complex or multi-level.?Listening, watching, interacting and communicating and playing – all of these are now layered on top of simple reading. Refreshing the brand - capturing Tomorrow’s Reader while holding on to Today’s Reader – lies at the core of the publishing balancing act. Yet we need a new kind of LTV model to inform our decision-making. The principle of LTV is most definitely not dead, but the practice needs a refresh.

If you are interested in exploring this topic further, we’d love you to join us for our next event, Readly Roundtable: Lifetime Value – Time for a Rethink? The session will be held over Zoom at 9am GMT on Thursday 9th September. Please don’t hesitate to get in touch with me for more information.