Subscriber retention and LTV with Alaska Airlines & The Guardian

How do you define retention and loyalty, at your companies and what are some of the bigger challenges that you're facing? Either one of you would like to jump in first.

I'll go I'll go. I saw, Taylor, that we both unmuted at the same time. So I love that. We'll figure it out. Yeah. We'll figure it out.

So The Guardian has a pretty interesting, revenue model.

You know, it's ubiquitous in the United States at least, and and globally to have, those media companies are increasingly becoming paywalled. So, you must be a paid subscriber in order to access the full depth and breadth of our content. At The Guardian, it's a supporter model. So the mission statement is free for all, beholden to no one. So, all of the Guardian journalism is accessible to anyone on the regardless as as to their relationship with us, and regardless as to their willingness or their ability to pay.

So so we have, you know, the the motivation for for supporting the Guardian is certainly different than the motivation for subscribing to access exclusivity, access journalism that you wouldn't normally be able to do, which is what a lot of media companies rely on.

So, so the the mission based motivation of support is a big piece of, what we see attracts people and retains people. And so we still have, different classes of support, so to speak. So we have, You know, the entry sort of like people who are paying lower, recurring prices. And then we have people at various stages up through, you know, high value recurring, supporters, all elective and all at whatever value people want to pay.

And we also have, what we call one time support. So people who prefer not to be in a recurring relationship, but, want to give on a one time at their, you know, whether they're spurts who do it once or at a repeat cadence.

So even though we have this, unique way of, attracting people and and building these revenue relationships with them, once we have that relationship established, it does follow a lot of the same definitions and, tactics you could say that a subscription business would follow. So, you know, we still measure churn looking at, what is our growth and how many people have left and so forth to see what the overall base looks like. And then what is our retention rate from someone staying with us from month to month or year to year.

And then, you know, looking at all of those signals that that contribute to someone's likelihood to do that. And a lot of that, I think, will probably be familiar to the media landscape of, you know, engagement with our journalism and so forth. So, yeah. So so we have this, oop, there goes the lights. Hopefully, you can still see me. I'm in this conference room, which this is probably a great time for me to pass the mic to Taylor anyway.

Taylor.

Yeah. Absolutely. So, loyalty at an airline, right, means a lot of different things. But, for the purposes of today's conversation, I'll frame it, in how we look at loyalty on our subscription products, both our flight subscription, which is called FlightPass, or our ancillary subscription, which is brand new and called Alaska Access.

Those subscriptions are new to Alaska and really novel in the airline industry, especially in the US.

They're one of our key strategic focuses for both revenue growth as well as, customer growth in terms of market share and preference, across our competing markets.

Loyalty for our subscription products is synonymous to us with, like, stickiness or halo effects. What I mean by that is, like, being a loyal subscriber to Alaska goes beyond just the subscription itself. And we measure the full customer's behavior with Alaska, not just on that subscription, right, to understand their loyalty. So if they're buying our answer subscription, are they also flying more? Right? And we kind of categorize our loyalty, and engagement scores that way.

By subscribing to either of our products, we want to see those people not only stay subscribed but more frequently choose Alaska for all travel needs. Right? Cars, hotels, vacations, flights.

And those take rates or, like, your preference should also increase as your loyalty to the subscription itself increases.

And so that's why we measure those kind of stickiness effects as a key indicator to loyalty in our subscription.

How do you balance it between what you're doing short term wise versus what you're doing long term loyalty building wise? I I think they're they're a little different in nature. And what considerations do you really think about when you make decisions around that?

Taylor, you wanna go first since Emily took first? Yeah. Sure.

Yeah.

So I think traditionally, a lot of subscription businesses measure their success in terms of breakage.

Right? That's kind of your your profit indicator at times.

But at Alaska, it's almost something we don't measure. We don't look at as success, in terms of retention.

We want our subscribers to use their flight credits or their Wi Fi passes.

And we've learned that the use of those credits is a huge indicator to future churn. And so in terms of short term tactics, right, if we're not seeing someone use their subscription, we will actually remind them of the benefits that they have available and to use those, which is obviously, like, takes away from breakage, but is truly what we want, and it begets a lot of that stickiness behavior.

That transparency that we provide really helps us with that long term strategy. It's a a core kind of cornerstone of our brand identity is that trust and generosity, which holds true in our subscription portfolio. So making sure that we're clear about terms and conditions, making customer service available via phone, all of those things really allow us to keep that long term loyalty even if they may cost us things, in the moment.

We recognize that, like, that that strategy might not work for all subscription businesses. But at Alaska, we've really seen seen success in the more that we provide to the customer in terms of transparency and communication, actually, the more loyal they become, to our brand in general.

That's fascinating. That actually reminds me of my Cinemark membership. So I have a membership to, a movie club. And in the membership, I get a certain number of free tickets each month, and they do try to get me to use them.

Like, I I just kind of assumed they wouldn't, but they do. They do that short term thing where they're like, hey. Don't waste your free tickets. Go.

Go see the movies. Because of that, hey. I'm gonna get real value. I'm gonna get enjoyment out of the experience, and therefore I'm gonna renew my subscription for that movie club.

But if I don't use the free tickets and go see movies monthly, I may not because I forget the joy of that customer experience. Right.

How about you, Emily?

I love that parallel. Yeah.

And I think that's exactly right.

And a nice segue is just, you know, the the whole, like, frequency recency depth. Like, we want, our readers, we want our subscribers, our supporters, whoever they are, to have a feel like they have a relationship with our products.

And, you know, at the core of everything that The Guardian does is it's journalism and delivering on that high quality journalism, everything from, you know, in-depth investigative pieces to, the live blog, which is, you know, chronicling things in real time.

We wanna make sure that people are both getting the satisfaction out of reading the journalism, whether or not it's the satisfaction of being informed or the satisfaction of being surprised and delighted. We launched a new wellness vertical recently called Well Actually. And, it's been just like a delight to see all of the different avenues that that vertical is exploring.

So so I I I feel so lucky and confident that at the core of what makes the Guardian a valuable proposition for people is the journalism because we can always make sure to deliver on that.

But we see you know the mission of both keeping the Guardian free and open to all and also the types of articles that, the the coverage that the journalism, tackles. Like, we have a really, devoted and and climate desk. And so the Guardian's reporting on climate, the environment, and so forth is, I think, one of its, major differentiators in in the the the frequency like, the the the volume of content that we're publishing and and the the depth that it goes into. And so people who feel really strongly about the importance of climate change also can find an avenue for supporting The Guardian and feeling that connection to another cause that they believe in.

So there's both the mission with the Guardian directly and the mission for the, the important topics that it covers and the important, you know, this being an election year or the consequence of of the politics of of everything going around in the United States and the global impact of that. Like, all of those can be motivating factors.

Onboarding and renewal journeys. Let's let's talk about the beginning of the relationship, like when you're starting with your customers and bringing them in.

Apologies for my light going on and off randomly as well.

Let's talk about which parts of it are, like, really critical for you. Are there things that you think about that you could share as the tips that have worked best for you when you were building out onboarding and renewal?

Emily, why don't you take us in on that?

Yeah. Absolutely. I think, a good philosophy to have is just for every action someone may take with your product, your site, your app, whatever it is, what is your reaction? And sometimes your reaction is just to sit back and let them do the thing they wanna do.

So if someone is on the site and they want to visit another article from an article that they've landed on Yeah. The best thing we could probably do action is no action at all. It's just let them take that, let them get more familiar with the journalism, complete these onward journeys that they wanna take. But if someone gives us their email address, that's an action we do want a reaction to. And so that's where I think really smart onboarding comes in.

If we know that someone has, automatically recurring payment coming up, giving the surround sound of reminders of how much it, you know, your support matters and how much, the the the type of journalism that we've published since the last time you've supported. Yeah. Things like that are really essential. So, so I like to think about it that way is just what's the action?

Do we do something? If so, what's the best possible thing that we can do?

I like that. Kayla, I'm seeing you nodding as well. Yeah. Now I'm gonna take that and, bring it back, the action reaction piece.

Yeah. So to be candid, right, Alaska is new to subscriptions, and like I said, we're, like, kind of one of the only airlines playing in this space, which means we're still learning what's best to do in terms of onboarding and renewals.

But what I feel very passionate about is making sure that everything comes with, like, true experimentation early on in the journey, so AB testing or multivariate testing. Like, if you think removing the address field at sign up will get you more customers, more subscribers, then test it, right, versus just going with your gut feeling. If you think investing in, like, rich and robust guided onboarding content, would keep people more engaged or get them engaged from the start, and prevent that churn. Build an MVP and test that before we're committing teams to building out a full, like, development plan and committing to ongoing maintenance of onboarding. Right? Maybe people are just as engaged without it.

It like, it this also may sound simple, but starting off, I think benchmarking has been incredibly important to me. Right? What does good onboarding look like? You you know, you were talking about another subscription you have.

So kind of pulling from real world examples even if they're not in your industry to understand what others do. Just like I'm gonna steal the action reaction piece from, Emily. And, like, I frequently ask, recruiterally all the time, like, what have your customers tried? What have they learned?

Like, to try and leverage like, leverage other expertise where you can, because subscriptions are really plentiful. So there is a lot that's already been tried, and you can just kind of adopt those those benchmarks, as best practice.

Are there any key insights or lessons that, that you can share around what's really shaped your approach to retention and loyalty at your companies?

Yeah. So retention for us, like I said, we we really strive since we don't have kind of that always on model. Right? It's not a not a video streaming service, let's say.

Yeah. But we have to balance that breakage with our, like, product offering and and revenue, because that is what has allowed us to drive retention. Right? Use of the benefits then has a much higher propensity to stay, like, retained, and renew, at that next billing cycle.

We also have found that it's really important to not overlook the importance of reliability when we're thinking about, about retention.

So, you know, a flight subscription like FlightPass is taking people on either, you know, unforgettable vacations or to see their family members when they really need to. And as such, like, we we can't afford to have that that system not be functional or not be available for people. Right? And so I think sometimes it's easy to see the product as separate from maybe the platform or, you know, uptime. Right? If you were to click on a link to read an article and it and it failed to load, right, like, when you really were invested in in reading that article, that can drive churn just as much as the product offerings themselves. And so really focusing on that kind of reliability of your platform, we see direct correlation with retention.

I love that. It really resonates for me, just being at Recurly. We call it the brilliant basics.

It's you've gotta nail your brilliant basics, and you've gotta always be refining and improving your brilliant basics. Because all the bells and whistles on top of it kinda don't matter if the brilliant basics aren't there.

So I'd love that. Emily, what are your thoughts?

Yeah. I couldn't agree more. And I think that, when you always make the quality of your product the center of the proposition and you can always deliver on that, then, that's that's the key to success. So, you know, making the the Guardian's journalism, I said this earlier, but, to repeat myself, just making the value proposition, the mission of the Guardian, the quality of the Guardian's journalism, and the role that you play in supporting The Guardian and supporting the kinds of, the the reporters reporting on these issues that you really care about, that has been a consistent thing that The Guardian has delivered for two hundred years, and we will continue to deliver. So, I couldn't agree more that it's about the basics and it's about the core value of what your product is. And if you start to stray too far from either of those things, then you can get into some really risky spaces where turn becomes, something that becomes a creative focus area.