Executive summary

#ThisIsTucson — a digital vertical of the Arizona Daily Star — built a nontransactional membership program under the umbrella of its for-profit newspaper and successfully launched it during the COVID-19 pandemic. #ThisIsTucson is a unique local news experiment: a live lab that explores the ways local digital media can be sustainable while remaining totally focused on audience. Membership programs are unusual at for-profit legacy media companies — the choice is more often for subscription — but membership leverages #ThisIsTucson’s very loyal audience, avoids a paywall, and creates a new audience-first revenue stream. 

• #ThisIsTucson was built on a foundation of innovation. In 2016, the original team used lean innovation framework and human-centered design to develop a hypothesis about a potential new audience of older millennial women. They then tested that hypothesis through surveys and one-on-one “empathy” interviews, generating an audience persona named “Jessica,” who still drives editorial and revenue decisions for the entire #ThisIsTucson vertical and all its associated products. For example, the team learned from interviews that Jessica was getting sports coverage from other sources and didn’t need another, allowing the team to remove that section and save the cost of a beat reporter. They learned from surveys that she didn’t use Twitter, saving those resources for Facebook and Instagram, where she spent most of her time. The team uses the hypothesis-survey-empathy loop frequently to spend limited resources more effectively and launch new products from newsletters to this membership program. 

 

• #ThisIsTucson “surrounded the problem” of membership by gathering a diverse team from different departments — newsroom, marketing, finance, and developer teams.

 

• Pre-launch, the membership team used the innovation framework — testing, surveys, and empathy interviews — to answer “unknowns” about launching a membership program. These methods helped set goals, member perks, pricing, and marketing language. Post-launch, those methods are continuing to refine the program. 

 

• Surveys and interviews helped save money and time. Surveyed readers said they would become members if they understood why #ThisIsTucson needed their money; this information allowed the small staff to create a “minimum viable” membership perks program, prioritizing low-cost member benefits like virtual meetups, merchandise discounts, and a private Facebook Group.

 

• The team learned not to be afraid to ask for money. Asking users to become members, everywhere, all the time is the only way to communicate the need for and value of local journalism. The team added calls to action on every platform and product. Messages explain how membership will help #ThisIsTucson and ask readers to “join” or “contribute” — language that is different from a nonprofit (“donate”) or transactional program (“subscribe”).

 

• The customer for membership is a reader who is already very engaged with #ThisIsTucson — nontransactional membership at a for-profit is not for everyone. The team calls these readers “super users,” and defines them as users who have 6 or more sessions on the website over a 30-day period. The team used a ratio of super users to total users to compare across platforms and create a Super User Score. About 1.3 percent of all ThisIsTucson.com web users are super users, while around 3 percent of newsletter readers are super users. Learning how to segment loyal users from the mass of available analytics and then using that information to inform the membership program was difficult and important work. The next step is to continue to grow the audience as a whole and the loyal segment of super users specifically by moving them into habit-building products like newsletters. 

 

• #ThisIsTucson had a loyal audience base before membership launch, but learned that audience development work and the audience loyalty funnel are crucial to growing a membership program. The team found that newsletters are the place where users become members, leading to a greater focus on newsletter growth and marketing strategy. Membership goal setting is also focused on newsletters; in the first 12 months, the team hopes that 3 percent of the full newsletter list at launch will become members. As the newsletter list grows, the number of potential members grows too.

 

• Membership is helping #ThisIsTucson diversify its revenue streams and continue its mission to be “audience first” in both editorial and business. This new revenue stream has helped sustain #ThisIsTucson during COVID-19 and a stay-home order in Arizona, when advertising shrank and in-person events were eliminated. Having multiple revenue streams makes the loss of one less devastating.

 

Introduction

In March 2020, as the #ThisIsTucson staff of five women journalists watched cancellation after cancellation of events in our community, we had a moment of panic. Several, actually. 

Our best work is covering stories that bring the community of Tucson together, and it became very clear very quickly that nobody would be getting together soon. 

Wrapped up in the panic of quickly pivoting to a new content focus and a remote office was the additional challenge that we had just launched a brand-new audience-first revenue stream — membership — literally days before coronavirus started to spread widely in Arizona.

Amid the uncertainty, our membership team — working toward launch since 2018 — was certain of many things: our price point, our value proposition, our technology platforms … Unfortunately we hadn’t put “Pandemic shuts down society” in the “Unknown” column on our whiteboard.

But we forged ahead, asking readers to support our reporting work in every place we could reach them. And they did, sending us uplifting messages and contributing financially to our bottom line.

It worked because of the 18 months of innovation and testing that came before. Here’s how we did it.

 

Background

In 2016, co-founders Becky Pallack and Irene McKisson were tasked by their executive editors to find a way to reach a younger audience for the Arizona Daily Star. At the time, only 11 percent of Daily Star web traffic came from women under 40. Our average print subscriber was 63.

While still doing our regular jobs — beat reporter and social media editor — we used the lean innovation framework to explore solutions and avoid the “If we build it they will come” trap. Lean innovation combines design thinking and the Lean Startup methodology to build products quickly with an empathy-testing-iteration loop. In other words, it’s a great way to innovate without wasting time and money.

We started our lean innovation research with a survey. Next, we analyzed the survey results and developed a hypothesis. We confirmed the hypothesis with one-on-one interviews. Next we developed a prototype of our news vertical and tested it online, and again in one-on-one interviews before we launched. After launch, we continue to use this loop to create new products and refine the core vertical.

First, we conducted an online survey to ask our target audience about their local media habits and local information gaps, like finding things to do with their kids on weekends, finding out about new restaurants to visit with friends, or discovering new career opportunities. 

We promoted the survey on the Arizona Daily Star’s website and used a targeted Facebook ad to reach young women and families in the Tucson area.

Next, we compiled the survey responses and created a hypothesis persona based on what we learned. For example: 94 percent of young women who took our survey had used Facebook to find a news story in the last week. We included that behavior in our final persona. She uses Facebook to find information.

We named the persona Jessica, because it was the most popular name for girls born in the 1980s, when our target readers were born.

A persona is different from an archetype. An archetype is a categorization of behavior, with a name like “Adventurer” or “Localist,” which is good for understanding the behaviors of a large audience. A persona is a specific “who” embodying that behavior; personas are good for empathy, specific examples, and teamwork. A persona helps the entire staff make specific content decisions. 

For example, during our research we learned that Jessica likes stories that are helpful, surprising, and relevant to her, which helps us shape our editorial content decisions and in turn delights Jessica. In our newsroom meetings, someone will pitch an idea and the editor will ask, “Would Jessica like that story?”

To further explore our “Jessica hypothesis,” we used our own networks and our Daily Star social media to find real-life Jessicas to talk to in one-on-one interviews, usually over a coffee. These Jessicas were millennial women in our metro area: in other words, our target audience. 

Empathy interviews are informational interviews where the goal is to deeply understand the interviewee’s problem and go deeper than survey answers. 

We asked real-life “Jessicas” how news fits into a typical week. We learned: 

• She cares about the news, but she doesn’t seek it out. She bumps into it. It’s free.
• Any free time for reading is before the kids are up or after they’re in bed.
• She’s looking for stuff to do, adventures, and options for the weekend.
• She is always on her phone. Sometimes on email.
• She uses Facebook and Instagram.

From these interviews we started to develop a more solid persona and we thought in terms of “jobs to be done.” How can we help Jessica and bring new value to her?

Using the survey responses and interview notes, we noticed a pattern and then hypothesized that Jessica had a problem we could help her with: It’s hard to find inexpensive things to do with kids in Tucson.

Our solution for Jessica: Deliver content that is made for her and centered on things to do in Tucson — things that are relevant, surprising, smart, and helpful — through a well-designed and easy-to-use app and through Facebook, Instagram, email, and events. 

We built prototypes and tested them with our original empathy subjects to get feedback. That testing and interviewing allowed us to refine the product — for example, we removed sections on finance and sports after many interviewees told us they got that kind of news from other sources. We also decided not to put resources into a Twitter account because surveys and interviews showed that our target readers don’t use it.

#ThisIsTucson launched in August 2016, an all-local all-digital vertical. It is housed under the umbrella of the Arizona Daily Star but is separate in philosophy, target audience, and branding.

Today our team is one editor and four writers, with support from the Star’s innovation lab, sales team, and marketing department.

Over time, we have also iterated on the Jessica persona, adding information from our website analytics and social media audience insights to make her better reflect our actual audience. 

What we know about Jessica:

• She is an older millennial.
• She has a job, but it doesn’t rule her life. 
• She has a partner and kids. They live in a house (rented or owned).
• She lives in the Tucson area and loves Tucson and the great outdoors. 
• She hates the heat and the traffic. 
• She will read any story about local murals.
• She likes to plan her weekend on Wednesday nights.
• She’s into yoga and volunteering. 
• She eats out and cooks at home.
• Her family budget is around $37,000 a year. 
• She’s a little rebellious. 
• She likes to laugh.

#ThisIsTucson audience metrics

200,000 average monthly uniques on web in 2020

1.5 million unique users in 2019 (a 120 percent increase over 2018)

45,000 Facebook followers

32,000 email newsletter recipients

26,000 Instagram followers

9,000 iOS and Android app downloads

68 percent of survey respondents say they have gone to an event, restaurant, or store because they read about it in #ThisIsTucson

 

Audience demographics:

Our users are local — mostly in the Tucson metro area

65 percent of our readers are women

56 percent of our readers are aged 25-54

40 percent are parents

 

#ThisIsTucson products

Website: thisistucson.com

Facebook — Page, Groups, Messenger alerts

Instagram

Two email newsletters

Digital guides: School guide, summer camp guide, wedding guide

Book Club

Native apps

Membership

Live events: School & Summer Camp fair, Babies Mamas Papas fair, Palo Verde Blossom Brunch, Book Club

Paid advertising and sponsored content

 

Business Model before membership

Our local news experiment is not just about audience development. It’s also a live lab exploring the ways local digital media can be sustainable for our legacy newspaper company. We knew the traditional newspaper business model of print and digital advertising would not help #ThisIsTucson be successful.

Our first revenue streams included nontraditional advertising products, such as sponsored content and paid listings, plus live events. We also sold merchandise at those events, but didn’t have an online store.

We grew digital ad revenue by more than 120 percent from 2018 to 2019. All of our revenue is new revenue for our daily newspaper.

Our products are not traditional digital advertising products because they’re also audience-first — AKA built for Jessica. We sell:

• Sponsored content (but not native advertising)
• Premium listings in our lists of things to do
• Sponsor messages in our newsletters
• Sponsor messages in our Instagram Stories

Because the ads are built for Jessica, they have much higher click-through rates: 5 percent average click-through rate for sponsored content and 3.5 percent average click-through rate for paid listings — far higher than the 0.9 percent click-through rate on Facebook ads or 0.08 percent on digital display ads.

Our sponsored stories are articles underwritten by local advertisers. A story, written by a journalist, triangulates a topic that is relevant to the advertiser’s audience and to the #ThisIsTucson audience. Because it is relevant to our readers, it doesn’t distract from the content like big banner ads and pop-ups do. It is the content. Thus it has a much higher click-through rate than banner ads and pop-ups. It also neatly sidesteps the problem that so many of our younger readers use ad blockers.

Audience-first revenue streams are different from the traditional advertising-supported business models common in legacy news. Audience-first methods in product development and marketing focus on matching content and platforms to our readers, reversing the top-down model of the past, where news organizations assumed readers would come to them. In the revenue model, audience-first could mean transparent underwriting instead of pop-up ads, events instead of inserts, and memberships instead of subscriptions.

After the ONA (Online News Association) 2018 conference, we learned a lot about what other newsrooms were doing with membership programs and how their challenge was to build a loyal audience. We already had a very engaged readership, and saw membership as a new revenue stream that is tied directly to our audience. All our other revenue was tied to advertisers and/or sponsors.

Our membership experiment:

• Takes audience engagement work to the next level by adding an audience-based revenue stream for local news.
• Applies what’s working for news startups to mid-sized local news markets, without starting from scratch.
• Builds on big journalism’s membership experiments and brings them to mid-sized news markets with small teams with limited resources.
• Demonstrates revenue potential for sustaining local news by bringing a completely new revenue stream to news organizations like ours.

#ThisIsTucson needs to bring in more revenue and diversify its revenue streams: bigger picture, #ThisIsTucson is an experiment to find a new business model for local digital journalism. As an intrapreneurship venture, we have rapidly grown advertising and event revenue, but we’re still not profitable entering our fourth year. (Intrapreneurs seek to innovate and disrupt from within, acting as entrepreneurs within an existing business.)

Membership is audience-first — creating a direct relationship with Jessica without peppering her screen with advertising. This revenue stream complements our audience-first content focus.

Our customer for membership is a user who is already very engaged with #ThisIsTucson content and products. We know nontransactional membership at a for-profit is not for everyone.

We wanted to be less dependent on advertising revenue. We were already experimenting with events as another revenue stream. But none of our revenue was yet tied directly to our audience.

 

Innovation work and tiny tests

One of the first things we did as a team was to compile dozens of “knowns” and “unknowns” about membership, which allowed us to focus on the areas that needed the most learning. This is a technique we learned from our innovation coach, Heather Hiscox, from Pause for Change. In this exercise, we listed one thing we knew or didn’t know per Post-it Note. 

Some of our knowns included: 

• “Ad revenue alone can’t make us sustainable.” 
• “Users want to see our staff in person and talk to us.”
• “We need help with marketing the membership program.”

Some of our unknowns included: 

• “Do we have the right resources?”
• “Do we have the sales capacity to offer a discount program to members?”
• “Will our readers sign up and pay to become members?”

We chose that last item as our most critical learning need. To start answering our own question, we conducted a pilot test in April 2019. We showed ThisIsTucson.com super users one of five random pop-up messages with different value propositions for a $10 per month membership. We measured the number of views and clicks and chose the most productive messages to continue to additional tests. 

For this test, we defined super users as users who had 6 or more sessions on our website in a 30-day period. We used a ratio of super users to total users to compare across platforms and create a Super User Score. About 1.3 percent of all ThisIsTucson.com web users are super users, while about 3 percent of newsletter recipients are super users.

To target super users in the test, we showed the pop-up only to someone who had visited 6 times or more in a 30-day period. We tested only on the website — not in newsletters or our app. We chose the 6-visit metric for the test to make sure we had a larger number of broadly engaged users instead of a smaller number of very engaged, loyal users.

We chose 6 sessions because we wanted a statistically viable number to make our test meaningful. With a higher number of sessions, the number of users would be too small and make the test unhelpful. With a lower number, the number of users would be too high and our test would be too broad.

Membership test 1:

 

Hypothesis:

If we offer _____ then 10 percent of loyal users (target metric) will click (customer behavior) to buy a monthly membership for $10.

 

Method:

We showed repeat visitors to the #ThisIsTucson website one of five random pop-up messages around signing up to buy a $10 a month membership. We measured the number of people who saw each pop-up and the number who clicked each pop-up.

 

Final results (30-day test):

 

Offer 1 (events): 4.3 percent click-through rate

Become a member now and get invited to a year’s worth of fun local events that only our members can attend — like #ThisIsTucson days at sold-out events and behind-the-scenes tours — just $10 a month

 

Offer 2 (guides): 2.8 percent click-through rate

Become a member now and get exclusive deep-dive info on how to live your best Tucson life — like school guide, neighborhood guide, summer camp guide, and wedding guide — just $10 a month 

 

Offer 3 (discounts): 4.7 percent click-through rate

Become a member now and get exclusive discounts to our favorite restaurants, Tucson attractions, local shops, and kid things — just $10 a month for potential savings of $100s a year.

 

Offer 4 (support): 4.5 percent click-through rate

Become a member now. #ThisIsTucson is an independent news outlet helping you find fun things to do in Tucson every day and experimenting with the future of local news. Support #ThisIsTucson with $10 a month.

 

Offer 5 (Facebook group): 3.1 percent click-through rate

Become a member now and get access to the #ThisIsTucson community — like a secret Facebook group, meetups with Tucson-famous people, and happy hours with #ThisIsTucson writers — just $10 a month

 

Everyone who clicked on the “buy” button received a “sorry” message that read:

 

Thanks for helping us test the future #ThisIsTucson membership program. Our membership program is not ready yet, but for now (if you haven’t already) please sign up for the newsletter because that’s where you’ll find news about becoming a member. Questions? Please contact Irene at imckisson@tucson.com 

We also did some testing around the price point. In June 2019, we used an A/B test to see whether users were more likely to choose membership at $8 or $10.

Question: Is $10/month the right price point?

Test: A/B test an $8 offer vs. a $10 offer

Hypothesis: If we offer a support message, then at least 5 percent of 200 viewers will click to buy.

Method: Show a pop-up box to a portion of readers to get a baseline click-through rate for each price point.

Test copy: Become a member now. #ThisIsTucson is an independent news outlet helping you find fun things to do in Tucson every day and experimenting with the future of local news. Support #ThisIsTucson with $10 a month.

Results: 

9 of 206 users who saw the $10 offer clicked (4.36 percent)

5 of 207 users who saw the $8 offer clicked (2.41 percent)

June 19, 2019 – July 2, 2019

 

In January 2020, we did one-on-one phone interviews with 15 super users we identified using survey data and from our most active Facebook users. We used a common set of questions and we did the interviews rapidly, clearing the schedules of four staff members for an hour to do nothing but this.

The structure of an empathy interview includes a welcome, demographic information, questions about the problem, and an exploration of Jessica’s news habits, and prompting the interviewee to tell a little story about a recent news experience. 

Empathy Question script

Interview start time:

 

Introduce yourself. “I am with #ThisIsTucson.”

I’m calling to learn about your experience with #ThisIsTucson.

Thanks for filling out the survey and thanks for taking time today.

What do you expect to get when you go to #ThisIsTucson? What are you looking for when you come to #ThisIsTucson?

How would you describe #ThisIsTucson to someone who doesn’t know about it?

When you look at something from us, is it valuable? How so?

Why do you keep coming back to #ThisIsTucson?

Where do you find our content? (App, Facebook, newsletter, events … From Google?)

Have you ever done something new because you saw it on #ThisIsTucson? Tell me about that.

Have you ever met other people through #ThisIsTucson? Tell me about that.

In a dream world, what would #ThisIsTucson do for you?

We want to make sure we can continue providing this info to you. To do that, we’re thinking a lot about how we make money. We’re thinking about a membership program for people who love #ThisIsTucson. What do you think about that idea?

If we gave you the opportunity to become a member, what would make you do it? (Try to get to why!)

What value would you expect to get out of a membership with us? How can we design it so that you like it?

What do you think about these options for members?

Just support us because you love us

Meetups and events for members

Discounts at local places

Some of the things our super users mentioned when we asked them about getting value from a membership: 

• They see what we do as a service they are willing to pay for. “The knowledge you bring to the table is valuable to me,” one interviewee said. 
• They wanted the membership program to be fair and understandable.
• They would like us to help them save money. Some suggested specific local discounts they wanted to see from local organizations like the Children’s Museum.
• They would like access to unique events. After all, they come to our site to look for things to do locally. “Opportunity to meet new people and talk to different groups is appealing,” one interviewee said. Another said, “Tucson is unique in that so many people are not from here. Getting people connected is always useful.” 
• They told us what they love about our content and how they think we’re different from other local news organizations. #ThisIsTucson is “down-to-earth” and authentic, one user said. Other interviewees talked about diversity of stories and sources and a good job highlighting women as a reason they loved #ThisIsTucson. “I like coverage of other people, cultures,” one said. 

After testing and learning, we decided to launch with a default $10/month price point and ask our superusers to support us because they value our journalism, not because we have a transactional perks program.

 

Funding and expenses and roadblocks

The next step was establishing how to pay for our membership program. Some software is needed to manage such a program. At the most basic level, this includes an email management tool, a payment tool that will process recurring payments, and a customer relationship management tool.

Plan A: Get as much as we need
$38,400 for expert consultants
$5,400 for customer relationship management software
$0 for email software because we’d use what we had
$1,500 for credit card processing fees 

Total: $45,300

Number of members needed to cover membership expenses: 378

Plan B: Get less of what we need
$26,400 for expert consultants
$5,400 for customer relationship management software
$0 for email software because we’d use what we had
$1,500 for credit card processing fees

Total: $33,300

Number of members needed to cover membership expenses: 278

Plan C: Get what we need, but build it in-house
$10,000 for a part-time membership coordinator role
One month for our in-house developer to build us a customer relationship management software program
$0 for email software because we’d use what we had
$1,500 for credit card processing fees

Total: $11,500

Number of members needed to cover membership expenses: 96

Plan D: Crowdfunding campaign instead of membership program

 

We also wanted to work with consultants who could bring knowledge and best practices so we didn’t have to reinvent the whole wheel — others have already optimized things like marketing campaigns and sign-up and check-out pages, for example. We just wanted to learn how the wheel would best work in our unique market. 

The city itself is unique. Tucson is a mid-size city — 550,000 in the city proper, 1 million residents in the greater metro area. It is close to the border with Sonora, Mexico; 43 percent of residents are Latinx. It’s a transitional town, home to the University of Arizona, an Air Force base, and snowbirds who spend their winters in the warm climate. It’s also a low-income city: 23 percent of residents live in poverty. The average household income in 2018 was $41,000, according to the last Census. We knew pricing would be tricky for a membership program like ours.

Our project is also unique. Membership programs are unusual at subscription-based newspapers and at for-profit news organizations in general, making the ask of our users harder. You can’t deduct this membership from your taxes, and we can’t call it a “gift” or “donation.” In addition, #ThisIsTucson is an intrapreneur project that works independently underneath the corporate structure of parents Gannett and Lee Enterprises, making seemingly simple things — like setting up an online payment system — difficult to navigate.

Knowing all that, we needed to build a membership program that was right for our circumstances. Acquiring the tools and the best practices were among our earliest roadblocks.

There are many resources out there for journalism organizations starting membership programs (including News Revenue Hub, Membership Puzzle Project, and Facebook Membership Accelerator), but localizing that information and making it work inside our corporate structure looked like a daunting task.

We had to work with the software tools our corporate parents had already selected as vendors, even though these weren’t the tools recommended by consultants offering packages of best practices. Our publisher approved of our membership experiment, but didn’t approve any additional spending for software and consultants.

Rather than cut spending in other areas of our budget, we pursued grants. A year passed as we tried to identify funders who would support our for-profit enterprise, wrote proposals, waited for approvals and rejections, and signed agreements. We spent time negotiating with vendors for pricing we could afford, because our grant money wouldn’t cover their standard packages. 

The pace was frustrating. We’d been working on the membership idea since late 2018 and launched in March 2020.

We received two grants that covered the costs of the membership program for one year so that we could begin realizing revenue — including funding from a Tow Fellowship, which has resulted in this report. 

Separately, we also received support from the Google News Initiative’s Innovation Challenge, which helped us pay for a Customer Relationship Manager and marketing software, among other things. Funders wanted to specifically cover revenue experiments at a legacy local news organization.

Our Year 1 costs were $69,000, including a consulting package from News Revenue Hub, a membership coordinator, software licenses, credit card processing fees, and sales tax.

At first it was difficult to project how the ongoing expenses and potential revenue would look in our budget. Revenue in the first few months of the membership program was $1,200-$2,100 a month.

The membership program will need to pay for itself and then some in Year 2. Costs will go down in Year 2 because we won’t need as much startup consulting help, but we will still need to pay for software licenses, credit card processing fees, and sales tax.

Grant money fast-tracked our membership program. Without it, we wouldn’t have spent the money (it would have been devastating in our budget) and we would have spent more time piecing together a low-budget, in-house solution.

 

A Minimum-Viable Membership Program

Our minimum-viable membership program is based on the premise that our readers want to support local journalism, and they find our product valuable enough to support it without much in return. In an internal survey of 502 of our readers done by News Revenue Hub in 2019, 52 percent of respondents said they would consider membership if we just asked them (10 percent) or explained why it was important (42 percent).

Goal setting with a brand-new revenue stream is tricky. We used what we know about our loyal users and combined that with industry advice around subscription conversions and membership conversions to try and fill the gaps in our knowledge.

Setting goals around an untested revenue stream was a challenge — one that is new to legacy, for-profit news organizations. We originally set our goal too high, but revised it to be more realistic after input from our consultants about current industry norms. 

When we started, we were looking at our entire audience as possible members. We looked at web statistics about loyalty. But what we learned, with help from the News Revenue Hub, is that the people who frequently open our emails are the most likely to become members. Newsletter recipients are the most likely to develop a habit because they receive the newsletters every week in their inboxes, so they become loyal readers and could become paying members.

With help from the Hub, we set a goal of 3 percent of our 25,000 email recipients (or 750 users) as potential paying members in the first 12 months. By early November 2020, nine months into our membership program, we have 300 members.

 

Membership model and MVP (minimum viable perks)

Here’s how our model works:

• We offer a nontransactional membership model. We didn’t put up a paywall. All content is free to everyone. Membership is different from subscription.
• We start with “super users.” These loyal readers will give us money if we ask for their support to keep doing the work they love.
• We start with “minimum viable perks.” It’s tempting to think you’ll lure in members with an offer of a free tote bag, but managing merchandise is expensive, and we found that’s not what members care about the most. They care about supporting journalism. At launch, our minimum viable perks were a members-only Facebook group and a discount on our merchandise. About 30 percent of members joined the Facebook group, and 9 percent of members used their merchandise discount.
• We treat first-time members like people who are testing us on how we act. We employ a “love strategy,” so members know we appreciate them; we can thank them frequently and make them feel loved through an email series where new members can reply directly to the editor, and through special events — held virtually on Zoom during the pandemic — just for members. (Before the pandemic, we had planned to experiment with in-person events.)
• We ask users to become members, everywhere, all the time. We added calls to action on every platform we touch — on our website header, in our articles and our newsletters, on our app and on social media, and through automated email campaigns.
• We use segmentation and data-driven tests. We purchased OptinMonster, a tool that helps us present different membership calls-to-action modules to segments of our audience. For example, readers coming from a story in one of our newsletters are asked to become members, while readers coming from a Google search get a request to join the newsletter.

We found price flexibility to be important. We want readers to become members at any level of financial support. So though we found through testing that $10 a month was an attractive price point for users and our membership checkout page defaults to $10 monthly, it also includes buttons for $5 a month, $25 a month, and a blank box to fill in any amount.

Of our founding members, 56 percent are choosing a recurring payment and 44 percent are choosing one-time payment. People who choose monthly are paying an average of $11 a month. People who choose one-time are paying an average of $37.

Something we learned from the News Revenue Hub: Whatever price point you choose, you’re saying, “This is what it’s worth.” Don’t undervalue your journalism. We have to “start conditioning them to care,” the Hub told us, and we have to ask readers to help us, while explaining why we need them.

 

Launch

We hadn’t answered every unknown before it was time to start testing with real members. Ready or not, we soft-launched in February 2020, almost 18 months after our first conversations about #ThisIsTucson membership. We signed up our first members―ourselves!―on February 19.

Our public launch was March 11, when we sent out our first email with a membership call to action. The next day we had our first 9 members, contributing $174. Five of the first members were recurring and four were one-time contributors.

Two days later we closed the office indefinitely as coronavirus started to spread in our community.

By March 19 we had 27 members and about $660 in new revenue for the month, which helped offset the start of advertising losses during the pandemic.

On March 20 we sent out a membership ask via email to our entire list of about 28,000 newsletter subscribers. One insight from the replies to that email was that the word “subscribe” as it relates to newsletters or membership is confusing for readers. Many thought we were putting our content behind a paywall or that they would have to pay for our newsletter. Now we use the words “join” or “contribute” to avoid confusion around the words “donate” or “give.”

 

Results

Nine months after launch, we have 300 members and $15,250 in membership revenue, with $2,000 more pledged for the year from members who made recurring contributions.

This new revenue stream helped sustain us during the stay-home order in Arizona, when our advertising shrank and in-person events were eliminated. Having multiple revenue streams makes the loss of one less devastating.

We have found that most members aren’t using any perks. We are experimenting with virtual member meetups, gathering data around attendance and survey results, to determine if we want to add these as an official perk of the membership program. Our hypothesis is that events will be a perk that cause people to become members, or cause current members to love us, thus reducing churn. 

In April, we added all our merchandise to an online store and sent a 30 percent off coupon to our members. This has proven to be a bigger revenue stream than just selling merchandise at events. We have also partnered with a local hospital to print shirts with our logo for their healthcare workers, creating another new revenue stream to help us diversify.

Our most effective membership calls to action are in our newsletters and our email list. We are tracking individual asks using our customer management tool.

Testing small changes in calls-to-action wording is difficult to measure over time without an expensive tool or company contract. Bigger changes are easier to measure: adding a membership call to action to our app or moving one to the top of a page from the bottom, for example, versus changing the wording from “contribute” to “join.” We are doing tests like these through some third-party tools, but it is an imperfect solution.

We’ll continue to experiment with perks. Before the stay-at-home orders, we wanted to try members-only events, and while we’re tentatively trying virtual events, we’d like to return to this when the time is right. We’d also like to try a savings program where we can help members save money at local businesses, but we’ll have to run small experiments to determine whether we have staff capacity to manage relationships with those businesses.

We also have to remember to stick with minimum viable perks to keep down our expenses. We’ve had to rein ourselves in a couple of times on this. Our members are paying for good journalism, so that’s what we should continue to do with their financial support. We’ll keep innovating by designing measurable tests to see which perks get people to become members.

 

Conclusion

The work is never done, so our membership experiment is far from over. After nine months, membership is on track to be successful as a revenue stream and an audience development strategy, but there is still space for both large and small, incremental improvements in the way we ask readers to become members, think about membership perks, and figure out how we connect and reconnect with the readers who are supporting us financially. 

Creating a new revenue stream from scratch is much more difficult than it looks in case studies and success stories. Go faster than feels comfortable. Ask for your newsroom’s investment to get it done, and if that isn’t an option, apply for outside grants and fellowships. Ask for help — from other journalists, experts, organizations, and champions inside your own newsroom. Stop doing the things that aren’t working, and — above all — celebrate your successes.

Our next steps are to circle back to the beginning, building on what we’ve learned so far by doing more surveys and interviews, and adjusting as we go. We’re working toward revenue diversity and financial sustainability for #ThisIsTucson, and we are confident that the membership program will help us get there. 

Membership lessons we learned that you could apply in your own newsroom:

• As a startup, we should have considered including membership in our business model from the beginning.
• We learned to use words like “join” and “contribute” instead of “donate” or “gift.” We tell members their contribution is not tax-deductible.
• As a for-profit, our membership revenue is subject to sales tax. 
• We learned how hard it is to surface our most loyal users from the mass of available analytics and then use that information to create a smart membership program. We sought to understand the path a user takes to become a super user, starting with how they first discovered our brand. The audience development work really matters, because if your goal is to get paying members, you have to start with getting a lot of people aware of your content and then turn them into engaged users who are willing to pay. The way we grow super-engaged users is to move them into habit-building products that contain delightful content. 
• We learned that newsletters are the place where users become members, so we do more to grow our newsletter lists, and we make sure to include membership invitations in each newsletter.
• We learned some surprising things from the one-on-one empathy interviews we did with loyal users: “Subscribe” is the wrong word to use unless you literally mean “subscription”; loyal users just want to hang out with us; the leap from loyal user to paying member is not very big―they just wanted to know “why.”
• We learned to pay attention to user experiences, such as what it takes to sign up for membership or cancel.
• We were able to use software we already had, which saved us on the expenses of the membership program. We spent a lot of time learning the capabilities of our software, including how to process recurring payments, how to make online payments easy for our members, and whether our software programs would play nicely together.
• Listing our knowns and unknowns about membership helped us identify the areas of uncertainty where the most learning was needed. We asked people from different departments — newsroom, marketing, finance, and developer teams — to help with this exercise to get diverse viewpoints on the problem.
• We learned to launch before it’s perfect. Flexibility and incremental improvement are our goals. This is hard for journalists raised on double-checking and corrections.
• Sending progress reports to newsroom executives helped maintain buy-in. They quickly wanted to know what’s working, and they were delighted to have some good news about revenue growth in a time when other revenue streams are shrinking.
• We learned a lot about automating our email campaigns. When someone joins our newsletter list, they immediately receive an email to welcome them and explain what we do and why. A series of emails goes out when a member is up for renewal or their credit card expires. There is no way we could stay on top of these things without an automation campaign, and it makes our users feel special and like they are part of something. Each email comes from the editor and is written in the same voice as our stories.
• We learned that a membership program means demonstrating our value to readers, asking them to become members, and thanking them. Repeat. We learned we needed a “love strategy” for our members to show them we appreciate them.
• We spent more time making sure the different segments of our audience are growing — from casual readers to those who trust us to loyal fans to paying members. We learned there is always more audience development work to do — places to add newsletter signups, making sure your recirculation strategy works, fine-tuning newsletters and calls to action. These things directly serve our membership program by creating a larger loyal audience likely to become members.

Irene McKisson and Becky Pallack Irene McKisson is the General Manager for Niche Audience Development, and Becky Pallack is the Product Manager at the Arizona Daily Star.