A large European magazine publisher sought to increase circulation revenue, without pursuing more aggressive increases than the business as usual in-house practice
Mather Economics analyzed each subscriber’s past performance as well as their associated demographic data to estimate their sensitivity to price increases. Various metrics and demographics were tested and the most significant variables were included. Subscriber-level price changes were recommended on a weekly basis.
Factors leading to improved retention can vary greatly across magazines, and subscriber ‘interest’ data can have a strong impact on subscriber retention and price elasticity. By leveraging the subscriber’s history, demographic data and readers’ interest variables, the client realized revenue savings of more than €100 000 for each of nine magazines and an average increase in renewal rate of ~5% over a 34-month period. With pricing less than “business as usual” leading to improved results, the publisher is now prepared to test pricing more aggressively, as well as optimizing the subscription period length to achieve revenue goals in the upcoming fiscal year.