A photo montage from the Fortnum & Mason event, showing guests sat at tables, people talking and the discussion panelists.

Recently Redbox Mobile, Purchasely and AppsFlyer hosted a dinner at the very festive Fortnum & Mason; we invited clients from the subscription app world to hear a panel discussion about the anticipated challenges and prospects for 2023.

Our guest panel included Jess Alderson, Founder and CEO of dating app So Syncd; James Quinn, Head of Performance Marketing at The Times and The Sunday Times; and Ben King, former Chief Subscription Officer at DAZN. The panel was adeptly Chaired by James Salins, CEO of Redbox Mobile.

With such a broad topic, we chose to stick to a handful of key questions for the 45 minutes before drinks and dinner, kicking off with…

Chair, James Salins: “Let’s look at the macro and how each business has fared in 2022 and please also touch on the micro, and what has impacted your apps too.”

James Quinn kicked off with the news, telling us that being in the market of bringing people the daily news means that content is always fresh, so user retention and engagement is made somewhat easier in a busy news year. “However, in an economic climate where personal budgets are squeezed, subscribers will start to question what else they are getting from your news brand; what additional benefits are you offering that have value?” For James Q., 2022 has been very much about the retention piece.

On the wider market challenges, James Q. raised the topic of data privacy; “Some time ago we used to be able to see all iOS data, but now we can’t, and that makes being a marketer somewhat more difficult. However, across mobile we’re still blessed with an amount of data that can be tracked which isn’t available with some forms of media.” This is a good point – if you’re running radio or TV campaigns your performance data and analysis is much more limited. James is optimistic though: “No doubt this loss of data is a challenge for 2023, but it’s one we all face and it’s exciting!”

Both Jessica and Ben note that 2022 has taught us that to survive in tough times, you need to pivot when your funding becomes tight. “Eyes are always on the value of your business” comments Ben; “with the current climate you’ll suddenly find that your value is being reassessed against the economics of today, rather than its potential, years down the line. This has a big trickle-down effect - if your funding slows down the whole of your business needs to reassess itself and inevitability that means marketing budgets too. The smarter marketeers are those who look at optimising the whole funnel, who measure everything against ROAS and lifetime value; those are the best equipped to get economic stability.”

It seems that Jessica has done just that with So Syncd this year, and even though “love never goes out of fashion”, potential investors have tightened the purse strings. “The recession does impact the funding environment for a young app like ours. In 2022 we were initially planning to focus on user growth, but because of the tech market crash, we switched our strategy to driving revenue, and that was unexpected, but has turned out well for So Syncd."

One of Jessica’s biggest learnings echoed Ben’s sentiment about being nimble; a need to switch strategy taught her that monetisation and lower retention rates do not have to go hand in hand, “We saw that as long as we had active users on the app and had prepared well by making the right adjustments, our retention rates stayed the same. This was a learning and a surprise success!”

James, our Chair, moved on to ask about paywall testing and their approach to it.

Jess took this one first; she has done a lot of paywall testing with Purchasely and it has delivered some great results. “Since the beginning of the year, we’ve increased our revenue per download significantly and a notable portion of that has come via A/B testing our paywall.” The approach at So Syncd is to brainstorm as a team and come up with some big picture concepts, and then drill down into the ones that work. Jess has also just started using Purchasely’s selective audiences feature, so rather than have just ‘one paywall for all’ they’re tailored. For Jessica, the initial results looked good: “I checked the latest test before I left work today and the conversion rate for that particular test audience has doubled.”

We’ve heard many times this year that ‘always be testing’ is the way forward for data-driven businesses; people’s preferences change, so if you don’t test and adjust constantly, your conversion rate will decline. As Jessica said, “you’ve got to keep coming up with ideas”.

How do sports video services streaming live events in real-time address testing? Ben told us that the sports services need to test, learn and optimise at near realtime speed to keep up with the speed of their business. If you are broadcasting 25,000 live sports events a year, (a larger catalogue of titles than most leading SVOD platforms), each with their own fanbases and audiences and each inly able to capitalise for a 1-hour to 4-hour window, you need to be nimble and smart in your marketing operations.

It requires developing thousands of different creative ad assets each month and testing the performance of each creative across every event and every marketing channel to deliver the highest sign-up and viewing figures. It is counter-intuitive to then send these millions of fans to the same generic landing page on the app stores. “As soon as you start to develop the capability to advertise a match such as FC Roma versus Lazio, and send each set of fans to their own team-branded page, you will see dramatic impacts on conversion rates, buying rates and ROAS – all of which has a substantial bottom line impact on your overall business.”

On the App Store, Apple Search Ads is tackling this with the introduction of custom product pages – enabling brands to serve users an app page that’s tailored to their search criteria. Ben agreed that “the advancements that Apple have made with CPPs is really where the industry is going”. His ambitions for targeting don’t stop there – Ben would love to see the market evolve to a place where everyone is a single cohort, so that users receive the ultimate, personalised experience across all marketing.

Moving on to putting the same paywall testing question to James Q., who is managing news subscribers in a very competitive market, he’s of the opinion that if you want access to a trustworthy knowledgeable news source, you should pay for it, and much like So Syncd, The Times does a lot of testing and modelling of price points and offers, working closely with their finance team to extrapolate revenue assumptions

Our panel is very much in agreement that success lies in paying attention to the available user data and then tailoring something specific, to encourage further engagement.

Before we departed down the user-data rabbit hole James, our chair, pulled us back to the top of the funnel and asked about the importance of brand building.

Ben responded first by voicing the unpopularity of digital apps spending on hard-to-measure brand building, offline and digital reach media channel. However, “if you haven’t done the high-level brand seeding or educated your consumers about who you are and what your brand stands for, they will not be thinking about you in the moment of truth – the moment they are making a purchasing decision or need to solve a problem. If you are not front of mind when that moment happens, it doesn’t matter how much money you spend on performance marketing, your competitors can still steal the market.”

Brands that are purely performance-based are simply converting the shallow pool of consumers with a short-term need; soon that will dry up, especially if the economic environment is tough. For years now marketers have been paying attention to the insights of Les Binet and Peter Field, who’ve taught us that long term brand investment increases short term sales and builds brand resilience.

Turning to Jessica, our Chair asks how important brand building is for new brands like So Syncd? “It’s definitely very important as a dating app – you’re looking for your life partner, so perhaps there is nothing more important in the world than that right? I never wanted us to be one of those apps that you see on Instagram, that nobody really understands and looks a bit dodgy!”

Jessica knows that building the brand in the right way has a positive impact on the type of users that join; in this way she can create a clear point of difference between So Syncd and its well-established competitors. Jessica employs a vast amount of PR to build brand and drive UA, working closely with journalists and titles to develop specific, useful content that builds legitimacy and brand confidence.

Turning to James Q., our chair asks a direct question about user acquisition and brand building, since The Times and The Sunday Times are both well-known titles, with +90% brand awareness. James admits that consumer understanding and trust in the brand helps dramatically when people are looking for a reliable news source for breaking news. However, he’ll never stop investing in acquisition alongside brand. He commented that “from a user acquisition perspective much has changed – we’re seeing a lot less data from an iOS perspective, unless you’re running directly with Apple, but the privacy changes are making it hard to see results from certain platforms. It’s vital for us to see beyond the install for subscription events, so we’ve doubled down on areas where we can measure data.”

Moving on to CRM and retention, the Chair asks our panel how they ensure that users are retained and how they limit churn?

It’s clear from all their responses that understanding user behaviour is key in recognising the signals that someone will churn. Ben commented: “work out your tipping point behaviour that dramatically increases the likelihood of getting your subscribers to stay. And laser focus on driving that behaviour as your North Star. For example, getting users to come back to your service twice a week, rather than once a week, could have a significant impact on your tenure, LTV and ROI.”

Key to avoiding churn was to use the data to understand what a user might want to watch next and then use first-party channels, such as emails or in-app banners, to push that to them. Ben recognised that “there was a very direct correlation – the more a user engaged with the service, the more value they perceived they got back from the service; the better the price value in the customer’s mind, the more likely they are to stay with you.” “It comes down to whether by working with your data scientists, you can filter down the petabytes of 1st and 3rd party data to create smaller, more targeted user cohorts (ideally individual cohorts of one) and whether you can then make completely personalised recommendations to that person, in real time”, Ben concluded.

To retain customers, the days of having disconnected marketing, data and product teams are over – the best services are those that make good use of integrated user data to better understand the customer, to inform their marketing and ultimately to serve their customers better.

James Q. added that “from a news perspective it’s really important to be the ‘first’, so if there is breaking news, like today’s budget, it’s vital to get the news to customers before they even realise they’re looking for it. That is good service.”

Our Chair asked James whether people are stickier in-app, than on the web? “Yes, absolutely, this is a well-known fact and means that a good onboarding process is vital. Driving people who have signed up on the web to download the app is one good approach. Once people are in the app, we can start to understand their usage and preferences, and also asking them what they’re interested in means we can tailor messages and content to that specific customer.”

But inevitably people do churn, so do our panel feel it’s a good idea to make it difficult for users to leave?

Although Jessica doesn’t yet have all the data to support this, her subjective view was that it should be easy for someone to leave, if they want to. She gets to the point quickly by voicing what we’re all thinking: “when I think about my personal experiences where it has been really hard to cancel a subscription, it has just made me really angry with the company and leaves me thinking that I never want to sign up again.”

There is little doubt in anyone’s mind that making it hard to leave can be very damaging for a brand, and although nobody wants to see a customer leave, it’s better to let them go gently and thereby increase the likelihood that they’ll come back.

Ben recalled working with data scientists to analyse scores of different user behaviours and identifying around a dozen that were statistically viable lead indicators of a customer likely to churn. In terms of the exit experience, Ben feels it’s about balance; “you’re within your right to explain to your customer the value that they’re going to lose, especially for a service that is used by multiple members of the family. The decision-maker is looking to save money, but maybe they don’t realise how much value their son or daughter is getting from the service. You’re also within your right to offer a discount – in sports for example, there may be a time of year when the sport you want to watch isn’t on, so it’s hard to offer the same value all year long.”

Ben agreed with Jessica that putting several hurdles in the way of users who want to leave simply creates very negative feeling and destroys the returning-user opportunity entirely. “If half your acquisitions are previous subscribers, and you’ve pissed them off at the moment of departure, they’re never coming back, and every customer knows there’s an alternative out there – legal or illegal.”

Running out of time before dinner, our Chair wanted to explore the idea of companies cross-bundling their services with other like-minded companies – “How do you feel about that and is it achievable in this marketplace?”

During the pre-event chat Jessica raised the topic of partnerships that extend and benefit user experience. “We would love to partner with an app like Paired, or similar – apps that help you to have the best relationship possible. People spend a lot of time finding their person, but what about the part after that? What about building good communication and understanding to ensure that your relationship lasts? We’ve built up a lot of trust and goodwill with our customers, so we’d absolutely participate in a method that made it easy for them to bundle So Syncd with a thoughtful, likeminded app.”

Ben confirmed that there are clear advantages in putting two or more subscriptions together; the churn rate is dramatically lower because users know that they’re getting a lot more value for money, and if they drop one service, they drop them all. However, he went on to say that it’s very hard for separate businesses to structure those bundles – “The technologies that we use today to create these bundles, such as redeemable offer codes are far from an idea user experience. I’d love to see the app stores to solve this problem and make it easy for cross developer bundles to be bought by the user, with a really clean experience; the whole industry would benefit.”

Last question: 2023, what are the biggest opportunities and threats?

James Quinn: “Undoubtedly the economic climate is the biggest threat, but I’d rather focus on the opportunities, of which there are many. One example may be the younger generations - they are the readers of the future and consume media in different ways from the older generations, so we need to think about different advertising techniques that can break through to them and show them why they should think about subscribing to The Times.”

Jessica Alderson: “Competing in a crowded market of dating apps that have millions of users is the biggest challenge. The biggest opportunity is to develop the brand and help people through what will be a difficult time – help them to find love and relationships.”

Ben King: “OK I’ll start with the doom, but I am optimistic! In the UK because of inflation, it will be tough – everyone is thinking about what they spend and they’re cutting costs. But for those apps that survive, there is a massive opportunity in the future; those that have invested in customer understanding and brand will come out stronger, with potentially a lot more market share.”

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