Solutions Partners

Why dynamic pricing is crucial for publishers in 2023

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Our industry defines a newspaper subscriber as “somebody willing to pay for the content they read in the format of their choosing whether that be in print, laptop, tablet or phone.” 

Our industry also faces strategic decisions for the future, including the frequency of print copies, how much a subscriber should pay for content and what that pricing should be based on. For example, digital or print or the quantity of content purchased. 

As Solutions Partners, Aptitude Software and Mather Economics are addressing these strategic planning questions in collaboration with industry partners to support the tech stack our industry needs in 2023 and beyond.

Aptitude, formerly MPP Global, has been supporting publishers for 20 years with innovative ideas to identify, engage and monetize audiences.  A pioneer of micro article payments and flexible business models, Aptitude has developed a robust subscription management platform and collaborates with key industry players to support publishers in determining how they can encourage readers to pay for the content they read or stream. 

Aptitude and Mather peer collaboration

An example of an industry peer collaboration is a recent integration with Mather Economics that implements real-time pricing strategies using Aptitude’s specialist publishing subscription tools and Mather’s expertise in applied data science. 

This pricing program uses continuous A/B testing of predictive pricing analytics which enables real-time insight into customers’ responses to pricing changes. This pricing strategy is like the yield management approach used by many industries but is focused on recurring revenue from subscriptions or memberships. 

A/B testing of subscriber response to price testing can be mined and utilized to make optimal decisions for attracting and retaining subscribers. For example, Mather uses techniques that:

  • Examine the historical data to segment customers according to their tenure with the product and their length of engagement with the content.
  • Use A/B testing, to determine the incremental impact of a given price increase on retention, thereby determining which subscriber segments are most sensitive.

Mather uses “price elasticity” to apply the best price point to a customer to maximize ARPU and to extend the customer’s tenure — and therefore their Lifetime Value (LTV).

Publishers and their acquisition teams conduct A/B tests to measure what a price change does to a change in sales for the core product or perhaps at the introduction of new products. Acquisition offers can be designed and focused on new subscribers using this method of A/B testing to determine what pricing is most effective for the audience that is being targeted. Publishers can also ensure that new subscribers get the right price coming off the introductory/promotion period. Long-term subscribers can also continue to drive ARPU and retention growth by determining who can absorb further price increases or bundled upgrades.

Determining the right price

Consumers are deciding which goods and services are most valuable to them. Prices are rising on nearly all products, and relative incomes are decreasing. This macroeconomic atmosphere offers risks and opportunities for publishers concerning their pricing. There is a risk that increasing subscription prices may increase churn amidst growing consumer costs. There is also a risk that subscription price changes may be insufficient to cover the increase in production costs associated with labor, print, ink, technology costs, etc., resulting in a less profitable operation overall.

Mather enables the right price at each decision point: initial acquisition offer, first renewal after promo, and subsequent renewal points considering macroeconomic conditions. For these reasons, the publisher’s pricing strategy is genuinely dynamic. With Aptitude Subscription Management, pricing can be very flexible to attract and retain a wide audience within the publisher’s reach.

Publishers with multiple titles across their region and the U.S., can also test pricing and products through the Aptitude Subscription Management Platform and conduct these A/B tests region-by-region to determine what works best for different geographies, in the same manner that fast-food restaurants can test new menu items in select locations. 

See Mather’s latest Strategic Subscription Pricing report as it outlines how subscribers react to price changes.

Recently, Matt Lindsay, president of Mather Economics, and Jeff Spies, head of subscription management for Aptitude Software, recorded a 10-minute introduction to pricing strategies and how publishers can find their sweet spot with subscription pricing.

You can listen to this exchange, through this link: Pricing Strategies to Maximize Growth & Retention — Aptitude Software.

To learn more, visit us at Publishing — Aptitude Software and Mather Economics.

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