Analysts have been reporting the death of metric-driven media for a while now. And those reports only got louder after the Buzzfeed cuts from earlier this year.
In reality, metrics themselves aren’t the problem – the problem is which metrics people choose to use. When your metrics are tied to third parties like Facebook, a single algorithm change can undermine your entire company’s business model.
As we’ve discussed in our previous blog post about getting started with reader revenue, embracing a subscription model means acting as if you’ve started a completely new business. To this end, we don’t recommend tossing metrics away entirely.
Instead, we propose a set of metrics that shifts away from page views and clicks.
They’re known as the Pirates metrics, a.k.a. The AARRR Framework, popularized by entrepreneur and investor David McClure. It stands for:
Acquisition
Activation
Retention
Referral
Revenue
Why are the “Pirate” metrics important?
For two reasons:
Your focus is on driving recurring revenue as well as keeping your existing subscribers. The Pirate metrics focus on turning initial subscribers into regularly renewing subscribers who attract new readers as well.
Your focus is on attracting and retaining readers based on your publication’s unique selling proposition (its distinctive journalism), not on a system of gaming metrics.
As our COO and co-founder Andrew Morris put it:
“A reader revenue model isn’t tethered to page views the way an ad revenue model is. You may have an engaged subscriber who never registers on your page view count because they primarily read your newsletters. And that’s fine. They may have subscribed for your rich analysis of politics and global finance and be entirely satisfied without visiting the other content on your site.”
Let’s tackle each of these one by one and identify how it relates to a publisher’s sales funnel.
Acquisition
What does this metric measure?
This metric tells you how many people wind up on your site. As a publisher, you measure this in page views. What’s different here is that page views are not the be-all and end-all. In fact, within the AARRR Framework, they’re just the starting point.
What questions should publishers ask when looking at this metric?
To increase the value of this data, ask the following questions.
Where are these users coming from? (e.g. social media, PPC ads)
Which of these users are most engaged and which of these users are simply dropping by and bouncing away? (e.g. engaging by signing up for a newsletter, clicking on other articles, subscribing to social media channels)
Which categories of content (e.g. political analysis, finance, entertainment) attract the most engaged readers?
What’s my KPI?
Average page views per person.
IMAGE: Which topics attract the most readers to your publication? (Pixabay)
Activation
What does this metric measure?
Your visitors come to your publication with a specific problem:
I need trusted, reliable information.
I want expert analysis from credible thinkers on this complicated topic.
If they believe your publication is the solution to their problem, they’ll begin moving through the activation stage.
What questions should publishers ask when looking at this metric?
In order to become a subscriber, a visitor must move through your activation stage. That’s just another way of saying they need to travel through your subscription flow and dynamic paywall without hitting any bumps in the road.
To increase the value of your activation data, ask:
Is there a fall off at a certain step in the activation phase?
Does my activation phase present potential subscribers with roadblocks in the form of unnecessary fields or redirections to new pages?
Am I presenting potential subscribers with the payment options they seek, which includes Google Pay and Apple Pay in addition to popular credit cards and payment providers?
What’s my KPI?
Conversion rates from free readers to paid subscribers.
Retention
What does this metric measure?
Your retention metrics show you how many readers stick around. Aside from your activation data, this is probably the most important data you’ll review.
You know what they say: Keeping a current customer is cheaper than finding a new one.
Publishers need access to retention data that is proactive, not reactive. In addition to viewing who has unsubscribed, publishers need to know the common signs that a reader will unsubscribe, so they can win them back before they’re gone.
They also need to understand which categories of content engage readers the most, so they can focus their efforts on the stories their subscribers value.
What questions should publishers ask when looking at this metric?
To increase the value of your retention data, ask:
How quickly do subscribers start reading our content after subscribing? Do they wait a day? Two days? A week?
Are we losing subscribers actively (subscribers intentionally leave before a year is done) or passively (subscribers are lost because they don’t auto-renew)?
Are there signs that a subscriber is about to leave and are there steps we can take (e.g. email campaigns, tailored content) to help them find the content they value?
Where are our most engaged readers spending the most time?
Based on our engagement and retention metrics, what do our readers consider our publication’s unique offering to be?
What’s my KPI?
Churn rate.
IMAGE: Are you keeping your readers happy? (Pexels)
Revenue
What does this metric measure?
The easy response is that this measures how much money you make.
The better answer is that this measures the different ways you’re making money.
One of the ways your publication can increase its revenue stream is by offering different subscription packages at different price points. This accomplishes two things:
It gives your readers choice and increases the chances of a subscription
It helps you make more money off of fewer customers through premium subscription packages
For instance, instead of offering just a monthly subscription, you could also offer:
An upfront year’s payment for an annual subscription, but at a discounted rate
A bundled package that includes both a physical subscription delivered to the reader as well as access to the digital version
A value-add package that includes a discounted membership to a local cultural attraction (e.g. museum, symphony) or access to VIP events hosted by the publication
What questions should publishers ask when looking at this metric?
To increase the value of your revenue data, ask:
Are there ways to charge extra for an upgraded experience? (e.g. ad-free browsing)
Is there a predominant interest among our readers (e.g. music, events) that will allow us to offer a compelling value-add (e.g. discounted rates on a music festival) to our subscription packages?
Is a significant portion of our revenue coming from specific areas of the country or the world, and is there an opportunity to create unique offers for this demographic?
What’s my KPI?
Average subscription value.
Referral
What does this metric measure?
This metric measures how many of your subscribers become advocates. It’s an important metric for publishers to understand and attempt to improve, especially in a digital media environment.
Remember that like attracts like. If your readers came to your content because they like the analysis you provide, chances are many of the people in their network share those same tastes.
As an organization, you want to make the most of these connections, turn your readers into promoters, and increase your subscriber revenue.
What questions should publishers ask when looking at this metric?
To increase the value of your referral data, ask:
Is our audience sharing the content they read predominantly through social media?
Is there an opportunity to equip our social media savvy readers with referral links and codes to share with potential subscribers?
Is our audience sharing the content they read predominantly through email?
Is there an opportunity to equip readers who share content via email with a fixed number of articles that they can “gift” to readers who may eventually become subscribers?
What’s my KPI?
Number of subscription sources.
Overall, the AARRR framework can help you embrace and manage a reader revenue strategy in a measured, strategic fashion that focuses on engagement and turning your readers into brand advocates.
Want to learn more about turning visitors into readers and referrers using predictive data? Get in touch for a chat with the Pelcro team.
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