Before you head out for the holiday weekend, we’ve got a feature-packed Five on Friday for you. In this week’s edition, Salesforce shares best practices for recurring revenue businesses, Light Reading talks about the challenges of content overload, Quartz explores the streaming TV battle between Apple and Amazon, Reynolds Journalism Institute explains how tight meters are winning the paywall wars, and Hubspot offers advice on the two numbers you need to focus on when it comes to customer acquisition. 

Two Challenges for Recurring Revenue Businesses

From a financial standpoint, recurring revenue models are a great way for new companies to enter the market and for existing companies to remain sustainable long into the future. From an operational standpoint though, the recurring revenue model can present challenges. In a recent blog post, Salesforce shared insights into some of those challenges.

• You must really understand your customer – what did they buy, why did they buy it, are they getting the most out of it? With the right data collection and analysis, you can better understand your customers and their likelihood of renewal.
• You also need to be able to scale your operations. The recurring revenue business model makes it easy for startups to test the marketplace to see if their subscription box, digital subscription, meal kit service or other subscription-based product will do well in the market. Companies who are successful will need to be able to scale their operations to meet customer demand and provide a high-quality user experience to increase engagement and adoption and reduce churn.

To read about Salesforce’s solutions to these problems, read the original post, ‘Best Practices for Recurring Revenue Businesses‘ by Annie Wright.

Metered Paywalls Are the New Norm for Newspapers

A recent study of 333 online news sources by the Missouri School of Journalism shows that metered paywalls are the new norm. Here are some key highlights from that study:

• Of the 236 newspapers studied, 170 had a metered paywall (72 percent), 6 were survey-only sites, 48 were free, 11 were freemium models and 1 (The Wall Street Journal) had a hard paywall.
• 77 percent of newspapers used directly paid models (metered, hard paywall or freemium models).
• Pricing for digital access to newspapers ranged in price between $50 and $150 a year.
• The number of free views ranged from 1 to 10, with 10 being the most popular at 90 percent.

View more results from the study here and a brief analysis of the results by the Reynolds Journalism Institute here.

Two Key Customer Acquisition Questions

To improve customer acquisition, there are two questions every subscription company needs to know the answers to, says Hubspot.

1. How much does it cost to acquire a new customer? Customer acquisition cost or CAC
2. What is a customer’s lifetime value? Lifetime value or LTV

These two metrics will help you determine if what you are doing is working, first as a baseline metric and later as a measure of success. Hubspot also offered some suggestions for how to improve the customer acquisition process:

• Hiring more salespeople may temporarily help you acquire more customers, but it is not a viable long-term solution. Because it is more expensive to acquire a new customer than to retain an existing one, a better investment is continual improvement of the customer experience.
• Don’t ignore your customer post-sale. Now that you’ve acquired new customers, you want to keep them engaged, so that they use your subscription product or service. Help them to fully understand the value of their purchase and ensure that they know how to use, so they are satisfied.
• A happy customer will share their experience with their circle of influence, so make sure that experience is always a positive one. Study your data to identify sticking points or the point at which a customer is most likely to cancel.

For more on improving the customer acquisition process, read ‘How to Improve Customer Acquisition‘ by Michael Redbord on Hubspot. 

Overcoming Content Overload 

In ‘Making Sense of Content Overload‘ on Light Reading, columnist Gary Miles addresses the issue of content overload, something we are all suffering from in a digital world where there are billions of choices of what to read, listen to or watch every day. Miles highlights a few of the challenges subscription companies – and consumers – face in an era of content overload:

• Growing selection of direct-to-consumer offerings
• Customizable skinny bundles of streaming TV services
• Searchable content that’s easy to find
• Personalized content, tailored to a specific user’s preferences

‘The time is now ripe for these companies to leverage big data, cloud-native offerings and OTT to give their customers the best possible content experience, while also creating a sizeable monetization opportunity. It’s a win-win,’ Miles writes.

Read the full article on Light Reading. 

TV Bundle Battle: Amazon vs. Apple 

Speaking of TV bundles, Apple and Amazon will duke it out in the battle to control the future of streaming TV. As Ashley Rodriguez points out in a recent article for Quartz, Amazon has been offering streaming video on-demand subscriptions via its Channels dashboard for years. Now Apple wants in on the action, making a move toward selling video subscriptions through its TV app starting next year.

This would create a digital battle of sorts with both Amazon and Apple vying to be the biggest, best catalog for streaming video. They basically become a one-stop-shop for your streaming video needs, offering access to Hulu, CBS All Access, HBO, Showtime, Netflix and others. Customers would go to the dashboard to make their purchases and the “host,” either Amazon or Apple, would get a slide of the pie.

Is there really a market for this? Given my own experience, I’d say “yes.” I subscribe to several streaming video services but have considered others based on the unique content they offer. Seeing them all in one place would make comparison shopping easier, and a central source for services would help me discover what other services exist that I may not know about or may not have considered before.

I am not unique. According to Quarts, the average American subscribes to four video services, each paid for and accessed through an individual. By aggregating these into a single spot, Amazon and Apple can simplify things for users and earn revenue for themselves. Read more about this in ‘Apple is Battling Amazon to Control the Future of TV Bundles,’ on Quartz.