Paid $ubscription Blues
🎵 Singing the Substack conversion rate blues... 🎵
This post was inspired by Joshua from The Recovering Academic who wonders whether:
Recommendations dilute your free-to-paid conversion rate
Substack’s readers are just tired of paying to read?
My thoughts:
Recommendations from other publications are super. But it’s true, if you get a bunch of new free subscribers from recommendations it will absolutely reduce your conversion rate.
Some Substack readers do feel overwhelmed by the number of newsletters they could support financially, and this can affect conversion rates.
Conversion rates and recommendation-derived subscribers
A publication’s conversion rate is the percentage of paying subscribers out of the total number of subscribers. For example, if you have 200 free subscribers and 4 paying subscribers, your conversion rate is 4 divided by 200 times 100, which is 2 percent.
Recommendation-derived readers are people who find your publication after it was recommended by another Substack creator. Some creators get a significant portion of their readers from recommendations. For example, this publication gets 23% from recommendations (thanks guys!)
When you get a bunch of new subscribers from recommendations, your total subscriber count will go up but (uh oh), your number of paid subscribers won’t go up at the same time and therefore your conversion rate will go down.
Does this matter? Nope. Not unless you are using your conversion rate as a measure of ‘success’ or self-worth, in which case it’s going to feel pretty shitty.
More free subscribers: always a good thing?
Free subscribers are brilliant, even if they make your conversion rate go down.
No one is gonna get their wallet out to pay for your newsletter on day one - no one (okay, maybe your mum). You need new readers to first subscribe for free, then get to know you, and then decide to support your work.
More free subscribers will, eventually, lead to an increased number of paying subscribers, if not an increased proportion of subscribers. And more paying subscribers equals more revenue, no matter what proportion of total subscribers choose to pay.
So does it really matter if new free subscribers make your conversion rate crash? I reckon not.
(By the way, Substack used to say writers should expect conversion rates of 5% to 10%. Rubbish. I was in an invitation-only Substack intensive program in 2022 with a bunch of other up-and-coming creators and the most common conversion rate among our cohort was 2%)
There are better ways to measure the success of monetized newsletters than conversion rates. For me, I use dollar-earned-per-hour-of-work to keep myself on track in my paid newsletter.
Tracking conversion rates over time
We’ve all got different goals, so we all have different numbers to chase.
Conversion rates aren’t a great number to chase, partly because more free subscribers are always (to my mind) a good thing, but more importantly because there’s quite a lot about conversion rates that you just can’t control.
There’s a lot of things that affect conversion rates that are outside your control
Conversion rates change with the season. You cannot control this.
For example, my food safety business has noticeable seasonal variations in sales revenue and I suspect this is because of how busy my customers are at different times of the year. This busy-ness problem likely affects my newsletter subscriptions too (not enough data yet).
Seasonal budget constraints will affect subscriptions too. Personal spending patterns shift a lot in November in some countries, as people start spending more on Christmas. Lots of families are short of cash in January. Business spending follows budget cycles, which are different in different countries, and make it harder for workers to purchase a subscription at certain times of the year.
Can I control how busy my readers are? Nope.
Can I control their personal or business budgets? Nope.
Should I be worrying about seasonal variations in spending? Nope. (But I still do, a bit, coz you know, I’m human).
Is Substack’s pool of readers running out of dough?
It’s natural for us to worry that we have reached ‘saturation point’ for our newsletters’ readerships.
In April I hit a big plateau and worried that every English-speaking food safety reader in the world had already heard about my paid newsletter. Luckily I was wrong. But saturation could theoretically happen to all of us.
Except the internet is an astonishingly enormous place. More of an ocean than a pool. More like the Pacific Ocean than a jacuzzi.
What is the Substack pool anyway? In Substack creator mythology there is a magical pool of super-generous Substack readers who pay for dozens of newsletters because they want to support high-quality writing. Those people do exist for sure.
Are those lovely readers getting subscription fatigue? Probably.
Will that lead to a significant dip in revenue for everyone forevermore? I doubt it.
Thing is, those generous Substack readers don’t all hang out in the same pool. Although it feels like we are all splashing about together, there is no single Substack pool. We’re all in different pools and serving different groups of readers.
For example, I have just one reader who is subscribed to both my (very different) publications. One reader out of three and a half thousand. Not much overlap there.
Have you ever stumbled across a radical right-wing publication here on Substack? I haven’t, but I have heard there are hundreds. I’m not stumbling into those pools because there’s no overlap with my networks. Substack’s good that way.
Other topics and different audiences are hanging out in different pools and that’s a good thing because it means there are many undiscovered pools from which to draw new readers.
So if you feel like your pool of potential subscribers is suffering subscription fatigue, if you feel like your reader pool is saturated, perhaps it’s time to dip your toes into some neighboring pools. Or go searching for new pools in other corners of the internet.
The freebie lovers
Some people have a personal policy of NEVER paying for newsletters. You will never convince those people to pay for your newsletter, no matter how brilliant it is.
My post-paid-launch survey revealed that 40% of my free subscribers are those people. They have no intention of ever paying for my newsletter, because they just don’t pay for newsletters like mine, and never will. Yep, almost half of my readers will never contribute a single cent to my support my work.
(Here’s where I play a tiny violin for myself.)
Readers like this are sort of a bummer, but they are an unavoidable part of online businesses.
My advice: acknowledge there are lots of people like this, and encourage them to help you in other ways, such as by telling their friends and colleagues about your work or by sharing your posts to social media.
Conversion blues (beaten)
If we acknowledge that (1) more free subscribers will lead to more revenue, so a dip in conversion rate isn’t something to worry about and (2) subscription fatigue can be overcome by finding new sources of readers, then we’ve solved part of the problem.
But we haven’t solved the big problem with conversions: What can we do to get more paying subscribers?
Substack has written a comprehensive guide on how to convert free subscribers to paid. (You’ve probably already read it).
For me, three things moved the dial for my paid newsletter (in a good way):
Creating a separate page and video walk-through that explain the benefits of a paid subscription, instead of relying on Substack’s default messaging (my food safety audience loves details!)
Upping the quality: Adding more images, charts and infographics to each post and ruthlessly chopping content that is boring or non-actionable, even if I just spent hours creating it 😓.
Mentioning paid subscriptions and/or asking readers to consider upgrading every single week (feeling like a broken record!). The most effective way for me to remind readers I have a paid option is by thanking new paying subscribers in the intro of weekly emails, a technique marketers call “social proof”.
Advice from the trenches
The creator of The Rational Walk (with more than 12,000 subscribers) says “When I first turned on the paywall, my message was not very clear but a number of people who had followed my work for a long time signed up anyway. Soon, it became clear that to get additional subscribers I would have to create a much more clear delineation between free and paid content which I did.
Prior to figuring this out, my paid subscriber count had plateaued which was quite frustrating. I am still not where I need to be to make the economics work, but six months into this experiment I see positive trends. My conversion rate from free to paid has increased and my free count has also increased. Much of it driven by an increasing follower count on twitter. Bottom line is that experimentation with the message and value proposition is part of the process.”
Final thoughts
Conversion rates can change over time, for reasons beyond our control. A short-term dip in conversion rates could be the result of an influx of free subscribers, and that’s a good thing because some of them will eventually upgrade to paid.
There will always be a significant portion of subscribers who just don’t (ever) pay for anything. And nothing you do will convince them otherwise.
If your pool of potential readers seems to have subscription fatigue, it’s time to seek out new pools. There are hundreds more out there if you care to go exploring.
What about you? Do you have the conversion rate blues? What do you do to keep them at bay?
I think there are a few things to note as well.
1. The more we share outside of Substack, bringing in new people who are not saturated is likely to have a positive effect on paid subs.
2. I think paid posts should offer the reader something other than just a personal story. At least for me this is true. I want to feel like I'm getting a takeaway for my money.
3. Having said that, I pay for subscriptions by writers that move me in some way. I either learn something from them or I'm soooo inspired by their content because it's fantastic (sometimes just their photography is enough).
You're right there will ALWAYS be a non-paying camp. We can't change that. But then we'll find the amazing souls who pay for TWO subscriptions, one as a gift for someone else. I've got a lady who's paid for two of mine. It takes all kinds to make the world spin 😊
Only 1? That’s amazing. Love your work :)