How retention can increase revenue by +20%, even if the number of new fans you get doesn’t increase.
What is retention and why does it matter?
Retention is a massive part of business strategy, not just on spicy pages but with products all over the world: retention plays a huge factor in how streaming services, gyms, and phone carrier services make money - just to name a few.
In simple terms, retention is the concept for “how long do people stay subscribed to your platform”?
This matters immensely on a spicy page: it is tough to get new subscribers, so every single one counts. When we get them, we want to keep them subscribed for as long as humanly possible. Having a better understanding of what retention actually is will help you figure out how to optimize & improve your retention.
The impact that retention can have on your business is massive. Imagine that you run a spicy page that gets the same number of new subscribers each month: there is literally no growth at all. If you have 30% retention each month (meaning 30% of subscribers that joined on month 1 renew on month 2) , your total revenue will still go up by 30% from month 1 to month 2, even if you aren’t able to increase the amount of new people subscribing to your page each month.
This can be a huge relief for creators who seem to hit a ceiling on the number of new subscribers they’re bringing in each month, and want to find a metric to focus on to continue working on revenue growth.
Allow me to illustrate an example with ✨math✨. In the below screenshot, you’ll a chart of two different creators’ revenue from subscriptions. The blue chart represents one creator, the pink chart represents another.
For 6 months, both creators got the same amount of new subscribers each month (300) and charge the same price ($20/month). The only difference between the two creators is that one has a monthly retention of 30%, and another has a monthly retention of 5%.
Look at the difference in monthly revenue over just 6 months:
As you can see, the creator with the higher retention made $47,759 from new subscriptions, and the creator with lower retention made $37,562.
This means the creator with higher retention made 21.35% more than the creator with lower retention.
Hopefully at this point you can see why retention is so important :)
How do you actually calculate retention?
There’s a correct way to calculate retention, and despite what so many creators think, it is not the “rebill on” list. That “rebill on” list is actually a horribly inaccurate way to gauge your retention.
If you were to look at your rebill list size, you might find that you have anywhere from 40%-60% of your subscribers with rebill turned on. This seems good, but rebill on is not an accurate way to measure who actually rebills. The reason for this is simply: a large percentage of people who say they’re going to rebill don’t.
This might be because:
They paid using a prepaid card, and it only had a specific amount on it
They act like they’re going to rebill in order to get rebill freebies, with the intention of turning it off right before
The real way to calculate retention is to take the total number of renews in a month, and divided it by the total number of subscribers from the month prior. It looks like this:
“Total renews in February”
/ divided by /
“Total subscribers in January”
Try it out for yourself, and you’ll probably see that your true retention rate is far lower than your rebill list size would have you believe. Use a Google Sheet and calculate this number for every single month of your paid page’s existence. Here’s an example of how that would look:
Even if your retention is lower than you expect, the good news is you have a starting point to grow from!
Once you’ve calculated your true retention, now what?
Once you figure out your baseline, you can brainstorm fun ways to increase your rebill rate. Think through the below as a starting point:
In what ways can I over-deliver on the experience that subscribers expect to have? This could be in the form of frequent freebies in mass messages (these can be as wholesome or as spicy as you’d like)
In what ways can I engage more with my subscribers? This could be in the form of sending conversation starters in mass messages, livestreams, or simply chatting more.
Is my bio aligned with the experience that subscribers are getting?
What would allow me to post more? Maybe there is a way to improve the quantity of times you’re posting on your feed (again, this can be as wholesome or spicy as you’d like.
Good luck with your retention journey!
That’s all for my lecture on retention! Thank you for reading this post :) if you enjoyed reading this, feel free to subscribe to my newsletter and let me know any thoughts or questions you have ❤️