From Doorstep to Mailbox: Navigating Subscription Pricing During Delivery Transitions

By Nathan Hart, Manager of Consulting Services & Becca Bettinger, Consultant

Labour shortages and rising costs have driven many news publishers to transition segments of their print subscriber base from home delivery to mail delivery.

This shift introduces significant questions about how to manage revenue and pricing strategies effectively. Understanding the impacts of such a major change is crucial for publishers aiming to navigate this transition successfully and minimise the effects on volume and revenue.

Mather’s benchmark data , drawn from more than 60 markets undergoing this conversion, reveals an initial spike in churn post-announcement, which often remains elevated for several months (see chart 1). This article examines the effects of transitioning from home to mail delivery on churn. It also explores insights from real-world A/B testing to guide effective pricing and retention management during delivery model changes.

To pause or not to pause: navigating renewal pricing decisions

The initial instinct among most publishers is to address all subscriber touchpoints to try to mitigate churn associated with the transition. While this approach is advisable, renewal pricing deserves special consideration.

Many publishers pause renewal pricing for subscribers affected by mail transitions. While this is a common practice, it is crucial to differentiate between organic churn and price-related churn and consider the revenue implications of such a strategy before making a decision.

Mather’s research reveals that a subscriber’s decision to churn is influenced by various publisher-driven and external factors. Under normal circumstances, a price increase might be the primary reason a subscriber cancels their subscription. However, when external factors such as inflation, print delivery day reductions, or mail conversion are introduced, the reasons driving a customer’s decision to churn become less clear.

Halting renewal pricing without first understanding these distinctions can result in significant revenue losses, despite stop-loss measures. Publishers must carefully weigh the potential increase in price-related churn from the mail conversion against the revenue lost by not maintaining their renewal pricing strategy.

A publisher’s experience

To further explore these dynamics and illustrate why it’s often preferable to maintain renewal pricing even amid significant changes like a mail conversion, we’ll examine two A/B pricing tests facilitated and reported by Mather for a mid-sized U.S. publisher during the period of March 2023 to February 2024.

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