Five years ago I was part of the team at Fairfax Media that set up online subscriptions for The Sydney Morning Herald and The Age. As part of that project we developed a series of reports and analyses to measure and improve the performance of our new subscription business. One of these was what I called (despite some well-deserved derision) the Pipeline and Funnel report.
Now at inkl, and throughout the intervening period, I’ve continued to find this framework useful for not only subscriptions or micropayments but also any sort of media-transaction strategy.
The framework itself is fairly self-descriptive. The pipeline consists of the number of encounters a reader needs to have with your site before they become a ‘lead’ or ‘prospect’ for what you are selling. And the funnel consists of the number of steps the lead must go through to complete a purchase.
So here are a few strategies you can use to improve the monetisation of your own blog or website:
- Use a shorter pipe — this is perhaps the first thing to do because it is entirely within your control, it consists of a finite number of choices, and there’s almost no downside to doing it. e.g., If you want to sell wine, don’t just bury the offer at the bottom of a review. Make sure it’s featured front-and-center on your home page. In fact, no matter what you’re trying to sell, bring it as far forward as you can because your audience will follow some variant of the standard 80:20 rule. i.e., 20% of your audience will see 80% of what you write. So if you’re not careful, you’ll find that only 20% of your readers even know that you’re selling something. NOTE: This is about creating awareness, not about forcing people. I’ll write a separate post later about building purchase consideration in a reading environment and the specific challenges that go with that. For now the key is simply to let as many people as possible know that you have something to sell.
- Use a smaller funnel — this is the next thing to look at because it too can be controlled and tested entirely by you. The only limitation here is that if you’re testing changes to your funnel, you need statistically relevant figures. There is no use conducting A/B tests on a dataset of 50 people because you simply won’t know whether the results are reliable. One way to test a funnel BEFORE you have a large pipeline is by using Google or FB ads. NOTE: You won’t get a good read on actual / absolute conversion potential (because you’re not testing this on real, primed prospects). However, you should still be able to form a view on the relative performance of different versions of the funnel. The key to success in the funnel is to remove as much friction from the purchase process as you can. This is NOT the same as removing as many steps from the funnel as you can. e.g., You may find that asking for an email address on the credit card page performs worse than having two separate forms.
- Fix the leaks — Fixing leaks is obviously important, but it can be more difficult than strategies #1 and #2 because isolating and testing the result of a leak-fix requires sophisticated analysis and measurement. One way to make this easier is by tracking ‘cohorts’ — i.e., by grouping readers based on when they first came to you. If you’re building an email database for instance, you should track the week or month in which a person signs up. That way over time you’ll see whether the changes you’re making are driving better or worse performance within newer cohorts. NOTE: The more general takeaway on this is that data collection is vital. Start measuring and recording anything that you think you might one day need or want to know. If you wait to do this when you actually need that data, it will obviously be too late. Measure and collect data from Day Zero (i.e., today).
- Find more readers — I’ve put this idea last because although it can have the biggest impact, it’s probably the hardest and the most expensive way to grow your business. Here’s why. Whatever your focus may be, there are a finite number of people who will find your writing interesting or useful. This means that for every reader who joins you, there is an ever-declining pool of potential readers out there. It also means that it’s vitally important for you to make the most of each reader who does come to you. If you pursue this strategy too early, you could in fact irreversibly damage your business by bringing potential readers to your site, and then not giving them the best possible experience. Very few will give you a second chance if they have a bad first experience. NOTE: I know this probably runs counter to traditional wisdom about building your business because a lot of news articles seem to focus on the top-line user numbers. However, that is almost certainly not going to work if you’re trying to build any kind of transaction-oriented business. The main takeaway therefore is that you should start looking for new readers only after you’re confident that you have a product and a process in place for providing value to them, and for getting value back from them. Before that the best case scenario is that you’ll just waste your time and money. And the worst case scenario is that you’ll actually destroy your business.
Incidentally, this framework also informed the thinking behind inklpay — the micropayment service that inkl has developed for writers. When we looked at pipelines for writers and publishers around the world, we found that the vast majority were a) too long and b) too leaky. So we set ourselves the challenge of designing a solution that could drive a 100x improvement in the pipeline.
The most common way in which readers are asked to pay for content online today is through a monthly subscription. The problem with this approach is that this is a huge commitment for any reader to make. Which is why most publishers provide a long pipeline of free content and ask very few readers to make that commitment. We realised that if the commitment could be reduced then the pipeline could be collapsed quite significantly. In other words, by offering the ability to pay a tiny sum for one article rather than a regular subscription for a whole site, inklpay cuts the commitment for the reader by more than 99%. That allows writers to expose the payment button to their entire audience, rather than just to a select few readers. And that in turn is particularly valuable for people who are writing for a niche audience. It’s also why we see a staggering 24% of readers clicking through on the inklPay button.
If you’re a writer and are curious about paid strategies, come and join our Facebook Group where you can ask our community of inklpay writers to share their experiences and advice.