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Managing Director - A year in review 2021

Managing Director's note

Despite the shadow of the pandemic and significant disruption, I’ve been excited to see incredible resilience and growth across the subscriptions industry in 2021 – a trend I expect will continue throughout 2022.

The ongoing impact of Covid-19 has reinforced the need for quality journalism, and for publications to embrace reader revenue as a key pillar in their strategy. On average, news publishers increased their subscriber base by 95% between Q1 2019 and Q3 2021 – but with that upturn comes the danger of ‘subscription fatigue’, coupled with more choice could lead to bigger churn. So for 2022, growth and retention are key. I refer to news publishing to illustrate, but many of these observations and recommendations extend well beyond the news sector.

Looking forward, organisations will also need to set up viable business infrastructures - including an organisational environment comprising multi-functional teams, customer centric skills and a culture that embraces testing and learning.

Some FT Strategies highlights from 2021

Thanks to the brilliant work of our team, incredible clients and supportive partners, in the past 12 months we’ve supported over 100 businesses – a 33% increase from 2020. We expanded our global footprint to almost 200 clients across 30+ countries, collaborating across more industries and developed hybrid models to work effectively.

A major highlight this year has been the Subscription Lab, in partnership with INMA and the Google News Initiative, in which we helped eight European newspapers acquire 100K new subscribers and reduce churn by 6%. To achieve this, we used our North Star framework to set ambitious goals that clearly prioritised subscriptions; measured and optimised the value provided to readers; segmented audiences to tailor offerings; ensured all teams were aligned and working cross-functionally; empowered each organisation with data; and developed an experimental mindset throughout. The report is well worth reading for more detail on all of the above.

In addition to the meaningful impact we’ve had for clients; I’m particularly proud of the team we’ve built that is - to quote one of our clients - “changing consulting for the better!”. Our talented team has more than doubled in the past year (we’re still hiring as we scale), and the culture we’re creating is special; values driven and dynamic. We’ve also got the best of the Financial Times. This year, we’ve worked with 60+ FT experts across data, analytics, tech, editorial and consumer research. Combining our experienced consultants with this operating expertise, makes for an agile team driven to help clients succeed by building future-proof capabilities, boosting confidence and shifting mindsets.

Tara Lajumoke
FT Strategies' Managing Director Tara Lajumoke
Tara Lajumoke
FT Strategies' Managing Director Tara Lajumoke
Tara Lajumoke
FT Strategies' Managing Director Tara Lajumoke
Tara Lajumoke
FT Strategies' Managing Director Tara Lajumoke
Tara Lajumoke
FT Strategies' Managing Director Tara Lajumoke

My forecast and recommendations for 2022

Looking forward to next year, here are my top three recommendations for subscriptions businesses to focus on.

1. Diversification, diversification, diversification

Whilst structural decline has been threatening traditional business models for many years, including the future of print advertising and circulation, the pandemic’s acceleration has left businesses looking at alternative methods of monetisation. We are already seeing green shoots within the industry - whether that be software as a service (e.g. Sophi from The Globe and Mail) or the establishment of new business units like GK Studio from GK City - publishers are already finding new ways to stabilise and then grow their business.

But businesses must find the perfect fit. Whilst digital subscriptions commonly represent success - it isn’t always possible for all businesses, in every market. Fortuitously, we are seeing the rise in alternative, successful reader revenue models that are forging the way for other businesses including memberships, donations, e-commerce and new business spin offs.

2. Double-down on subscriber retention

2021 has been a year of astronomic growth for many subscription businesses - whether it is the FT or Disney+, however the acceleration of acquisition is not sustainable. Economic pressure - exacerbating involuntary churn (payment defaults), a slowing news agenda and subscriber fatigue means retention will become even more challenging. Without rebalancing their focus to retention, many subscription businesses are going to find their growth stagnating.

We believe that from next year, we will start to see a marked gap between the real winners and losers - characterised by those that can provide meaningful value and retain their new audiences. How to do this? Engagement. Get closer to existing and new users by segmenting them, and building unique propositions for each segment. As INMA said, if 2020 was “the year of subscriptions,” 2021 has been “the year of the light readers”. It’s therefore worth investing in big drivers of engagement for loyal and casual readers – on the homepage, via newsletters and recommendation engines – and developing non-news propositions, so that those who come for the headlines will stay for the podcasts, or the crosswords. Consider trading off registration for longer free trials, too, so you can get to know your new audience better. And, flip the narrative on cancellations. They’re another opportunity for personalisation, so dig deeper to understand the motivations and respond with more tailored offers.

In 2022, we also expect to see more launching of churn mitigation activities timed around annual renewal and post cancellation - ‘right-sizing’ in life and growth activities.

3. Diversify, empower and align your organisation

As even more organisations reach saturation point for traditional market segments, they will (thankfully) be forced to find new pastures in search of exponential growth. To do this, organisations must better reflect the communities they seek to serve - including hiring more females, ethnic minorities and younger audiences. Additionally, organisations will need to buy and borrow new skills - across areas like analytics, product and audience engagement.

Competing teams and business lines will need to work together. For many years, advertising and subscription divisions have been at war; whilst advertisers chased scale and the free provision of goods and services, subscription marketers looked to limit access in exchange for payment. With the increasing restrictions on the collection and use of third party data, that will now change. Both subscription and advertising businesses now look to identifying unknown readers, building first party data and using personalisation as major assets for their business; this represents a seismic shift in the alignment of organisations and their future success.

Finally, empowering and aligning these diverse teams towards a common goal is imperative. Cross-functional collaboration and clarity on which customer to prioritise is vital. We hope to see even more organisations successfully use our North Star framework to align and focus teams on an unambiguous goal, whilst rapidly testing and learning. This approach is how the Financial Times achieved its North Star goal of 1 million paying subscribers ahead of schedule, and what’s now driving it towards its latest goal of value and volume.

I am excited to see how all of this plays out in the new year and how FT Strategies can support that vision.

About the author

Tara Lajumoke
Tara Lajumoke
Tara Lajumoke
Tara Lajumoke
Tara Lajumoke

Tara Lajumoke is Managing Director of FT Strategies. Before joining the FT, Tara worked at McKinsey's London office and previously at Goldman Sachs in Europe, the Middle East, Africa and the US. She has over 15 years’ experience, serving clients across multiple sectors on strategy, digital and transformation.

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