How Crain Communications uses pricing research to grow revenue
Veebha Mehta is the CMO at Crain Communications, a diverse business publisher with titles spanning the advertising, healthcare, investment, automotive, and plastics industries. When she assumed this role, she quickly landed on three crucial questions to answer in order to grow the business. However, she certainly couldn’t have anticipated the global pandemic that descended just a few weeks into her tenure.
As it turned out, these unexpected events only sharpened her focus on the hunt for these answers. Mehta recently shared those revelations with Piano, illustrating the process she went through around research, testing and data.
The full discussion between Veebha and Piano’s SVP of Strategy, Michael Silberman is available as part of our Piano Academy webinar series, Maximizing Acquisition: Perfecting Pricing and Promotions. We’ve distilled the highlights here.
1. How to effectively leverage a discount program?
An early observation Mehta made upon joining Crain was how extensively the publisher used heavy discounts to build subscription velocity. It’s common for publishers to offer low introductory rates or even free trials to bring in new users. However, without the right pricing strategy, customer churn and conversion can become detrimental.
During the Covid-19 pandemic, publishers reported a resilience in subscriptions as more people turned to digital outlets for news coverage. This presented a surfeit of new users up for grabs and discounts are an effective way to bring these potential new readers into the fold. Using a combination of price research and live price testing, Crain ran a promotional program to drive up their subscriptions.
Significantly, they discovered that many of their trusted products were priced far below what consumers were willing to pay. This data empowered Crain to adjust prices in order to meet revenue targets, as well as experiment with trial offers to attract and retain new subscribers.
2. How to balance revenue and circulation?
Pricing doesn’t exist in a vacuum. Changes to pricing and promotions naturally impact readership. Tactics such as gating certain content behind a paywall, raising or changing pricing structures, or even shortening trial periods can positively impact revenue. However, they can also reduce a publication’s reach.
During radical changes like the Covid-19 pandemic, longtime readers’ priorities and price sensitivity may shift. Publishers must account for that and be willing to adapt their strategies.
Crain Communications is developing a more sophisticated understanding of what people are willing to pay for each of its products. This would lead to creating a distinct pricing and offer strategy for each brand.
In particular Mehta says Crain found that it was valuable to decouple its print and digital pricing. Price testing for Crain’s Chicago Business -- a weekly business outlet with both a print and digital edition -- showed that while both the print and digital editions were highly trusted within the market, demand for digital was higher than for print.
Prior to this analysis, the pricing was similar for both outlets. These crucial data points helped Crain adjust pricing for its digital edition in order to fully monetize that untapped demand. It also allowed them to prioritize further demand for digital subscriptions. This resulted in more digital revenue share, and a 39% overall conversion rate on subscription offerings.
3. Driving conversions through content and pricing
Finally, Mehta wanted all of Crain’s publications to focus on driving new subscriber conversions through a combination of innovative content strategy and smart pricing rather than relying on deep discounts. Using pricing research and testing, Crain was able to more clearly understand the pricing psychology of their core consumers and the content that they most valued and use those insights to develop a conversion focused content strategy.
Price research on some of Crain’s flagship business products showed a delta between what the publisher was charging and what its customers were willing to pay and revealed a need for specific content. This insight allowed Crain to optimize its promotional efforts toward the content that readers valued most. By locking specific articles and creating premium verticals, Crain was able to communicate that value of specific content and drive higher rates of conversion on its most valued content.
Intimate knowledge of a specific audience is at the heart of a publisher’s offerings. But without a complete view of an audience’s pricing psychology, as well as their willingness to pay for information, the data is simply incomplete. Harnessing the power of price testing and research can help even the most sophisticated publishers better understand their audience and serve them the content that will drive them to convert at a higher price point.
This article first appeared in DCN on November 2, 2020.