Substack · B2B2C · paid newsletter publishing
If your retention beats your peers by a lot, raise your price
Some writers keep 90% of subscribers after a year yet never change price
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What they did
Substack runs business reviews with writers covering retention, growth rate and other health metrics against peers. When paid retention is far above peers (some writers retain 90% after a year), the message is 'your health metrics are too good': the product is likely underpriced or the writer is not pushing growth hard enough. Many writers set a price long ago and never revisit it. Host's counterpart: at ~20% annual retention (median ~30%), don't raise price on existing subscribers.
What happened
Guest sees many underpriced writers who have not changed price in years; no before/after numbers given.
“sometimes we'll say, "Hey, your paid retention rates are like through the roof. They're incredible. They're way better than your peers."”
“But there's a flip side to that, which is that can also mean that your product is underpriced or that you're not being aggressive enough trying to grow your audience. And so the phrase that we try to hammer home is, "Your health metrics are too good."”
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More from this episode
- Crunchyroll: Hold the price for years while you grow subscribers every other wayGrew from 200K to 12M+ paid subscribers; first price rise after 6-7 years
- Crunchyroll: Change your brand's tone to welcome newcomers, not just diehard fansCalled a big change behind subscriber growth; no separate numbers
- Crunchyroll: Sell merch, events and games to your most loyal subscribersLet it compete on fan relationship instead of the best video player
- Crunchyroll: Add the shows cancelled users asked for, then email them to come back
- Crunchyroll: Compare people who cancel in the first month with those who stay
- Crunchyroll: Survey what regular subscribers and your biggest fans would each paySomewhat helpful; people say different things than they do
- Crunchyroll: Raise the price $1-2 for existing subscribers too, not just new onesLittle churn from existing subscribers; new signups dip somewhat
- Disney+: Announce a price rise weeks before big new releases, effective after they startPress backlash at announcement; no subscriber numbers given
- Disney+: Launch at $5 a month with free carrier bundles, then raise pricesAbout 100M subscribers fast, but revenue per subscriber lagged Netflix
- Substack: Offer a top tier where fans choose their own priceMany fans pay well above the regular price