Launching a New Revenue Stream

Lisa Heyamoto — Mon, 09 May 2022 17:18:28 +0000

Launching a new revenue stream or deciding to grow an existing revenue source is a big step for an independent news organization. But before you start earning those dollars, it’s important to have the systems, processes and resources in place to set the venture up for success — and to support the person/people doing the work. You may not need to develop everything right away — and it may even be wise to develop some things in partnership with your revenue-generator — but now is the time to lay a strong foundation and make a clear plan.

How to think about revenue generation

Many news founders don’t relish the idea of focusing on financial health, especially if they launched their news business with largely editorial motivations. But the way you approach revenue generation can be a great fit with your mission, passion and values.

Building relationships

It’s tempting to think about revenue generation solely in terms of money. But at the end of the day, revenue generation is all about building relationships — regardless of the revenue stream. For reader revenue programs, it’s about understanding and engaging with your audience as you mutually support each others’ needs. For major donor programs, it’s about inviting people to be a part of the change you envision and asking them to use their time, resources, creativity, networks, skills or platforms to support your work. For advertising/sponsorship efforts, it’s about working with companies that want to reach and serve the same audience you do.

While money is an important input for how you achieve your aims, it’s really just one piece of a larger picture: getting people excited about your cause and community, figuring out what motivates them to want to be a part of it and being a good steward of that relationship.

Audience thinking

Along those lines, you’ll want to make sure that your revenue generation efforts are tightly aligned with your editorial strategy, which means approaching your work from an audience-centric standpoint. When prioritizing different revenue generation opportunities — even within a particular revenue stream — you’ll want to focus on those that dovetail with your audience’s needs, priorities and values as well as your own.

You’ll also want to have a mechanism for weighing and discussing opportunities. What advertising clients or donations are you willing to accept and where do you draw the line? What editorial products are you committed to producing (and how often) so you know what your advertising manager should sell against? How can you build off your current work to use your resources most efficiently?

Thinking these things through in advance, and having routines in place so you can collaborate along the way, helps ensure that your journalistic and financial efforts are reinforcing rather than undermining one another. With forethought and clear communication, you can preserve the editorial independence that is critical to your organization while generating sustainable revenue to support your work.

Launching an advertising/sponsorships program

Though recent conversations across the journalism industry over the past several years have centered around reader revenue, philanthropy and major donors, advertising and sponsorships remain the most common revenue stream for independent news businesses.

There are a number of resources that go into much detail about this revenue stream, including:

Meanwhile, here’s how to get started.

Planning

Launching an advertising/sponsorships revenue stream starts with learning what you can build off of, discovering who you can build with and then making sure you can keep building. So that means knowing where you have traction to attract advertisers or sponsors, developing relationships with those clients and ensuring your editorial products will support your work in this area.

Make a list

Start by making an organized list or mindmap of your top prospects. Who are the businesses, organizations or agencies who might want to get their message out to your audience? It’s useful to organize this list into buckets, or segments, to prompt a thorough brainstorm and so you can see patterns. Use this information to create the roadmap for where to focus your efforts.

You’ll need to think locally, regionally and nationally to capture all your ideas, but you’ll start with potential local options. A good starting point is your Chamber of Commerce or your department of small business services. This will also help inform what regional or national advertisers you consider as you get a clearer framework for identifying who is mission-aligned with your editorial philosophy and the audience you serve.

If you’re a very small organization, you may not have a large enough audience to attract regional or national clients. This list can also help you find niche segments that might lead to clients who are a great fit for exactly what you do and who you reach.

Expand that list by seeing who is advertising/sponsoring with your peers, allies and competitors and may also be interested in working with you. What ads are appearing in other publications? Whose name is appearing on sponsorship walls or on sponsored content? Are there other publications or newsletters that cover similar topics in another community with advertisers/sponsors that might want to reach your audience as well? Think of other people’s efforts as both reconnaissance on who is using marketing dollars for what, as well as proof of concept that working with you could work for them.

Create a pipeline

Now that you have your list, strengthen and grow it by developing relationships that could lead to future opportunities. Ideas include:

Partner with/join local chambers of commerce or industry groups to meet other business leaders in the area
Reach out to advertising agencies and make introductions
Network across the journalism industry to make contacts around advertising and sponsorship

Create an inventory of products

The first thing potential clients will want to know is who their message will reach, how many people will hear it and how and when they’ll encounter it. That means you need to have an up-to-date inventory of products you can sell against. This will help your clients understand what they’re buying, and will ensure that you don’t oversell and end up in a position where your ad/sponsorship schedule and your editorial schedule don’t align.

It should include:

A list of products, which could include your website, your newsletter, your events and your special issues/guides
The metrics around those products. For example:

Number of newsletter subscribers
Number of website users
Number of events and how many people attend
Number of topical/sponsored newsletters/guides/special editions

How that inventory is packaged
- How many viewers or visitors will encounter the ad/sponsorship
- How many ads/sponsorships each product can accommodate
- Percentage of time an ad is shown on a page and how many ads can go on a page
- Guaranteed share of voice, which measures brand awareness compared to the competition
Your editorial schedule
- When you publish which products
- How often they’re updated with fresh content

Strategy and pricing

Now that you know what you’re selling against, you have to figure out your strategy for doing so and how much to charge.

If this is a brand new revenue stream and you’re starting from scratch, you’ll have to make informed guesses about who to target and how to price. Here’s where it comes in handy to scope the competition and see who else is advertising with/sponsoring whom. Take a look at the media kits of your peers, allies and competition to get a ballpark idea of where you might start.

If you’ve already ventured into this territory, you’ll need to examine your previous efforts to reveal where there’s been traction so far and where you might want to build. You’re looking for patterns and trends to understand when clients are apt to spend, and on what, so you can glean their priorities and motivations. Look for:

The type of advertising/sponsorship you’ve tried
How many times different clients have advertised/sponsored and the times of year
Whether revenue and/or activity is higher in certain times of the year
The length of each media schedule

If you don’t have it already, you’ll need to develop a monthly calendar that captures this information in a more structured way. It should include the client, the media schedule and the length of schedule. This can be kept in a spreadsheet when you’re starting out, but if you’re serious about developing this revenue stream, you’ll want to invest in a customer relationship management tool (CRM).

Develop a list of opportunities

It’s time to develop a list of opportunities you’d like to pursue. This will give you a snapshot of targets to refine your focus. Established teams would categorize these by topic (health, business, retail etc.) but smaller teams would do well to separate them by geographic area (local, regional and national.) Eventually you’ll need to develop rate cards for each category, which will reflect their different prices.

A few things to note:

For big clients, you’ll be working with a contact in the communications/marketing department or a contact at the agency that represents them. For smaller clients, you’ll likely be working with the business owner.
Web research is a great way to build your opportunity list. Look for clients whose work aligns with your editorial content and reach out.
You can purchase a lead list, but it’s expensive and you’ll end up doing a fair bit of legwork anyway. A better option is to join industry trade groups and chambers of commerce, who often have additional lists you can access once you’re a member.

Before you reach out

There are a few assets you’ll want to have on hand before you reach out to potential clients. They are:

A monthly editorial calendar: a high-level look at what you’ll be publishing, where and when. This is a helpful internal planning tool, of course, but you’ll also need it once you start scheduling ads/sponsorships alongside your editorial work.
- Here and here are a few guides for how to create one if you don’t have one already
A media kit: A media kit is a document that shares targeted information about your business. This can take many forms and be used for many purposes. As a journalist, you’ve likely run across media kits designed to share information with members of the press (you). The media kit you design will be aimed at advertisers and sponsors interested in working with your business.
- It will likely include:
  - Who you are
  - The story of your organization and your editorial priorities
  - Who your audience is and the relevant metrics
  - What you’re selling
  - Why clients should work with you
  - How to get in touch
- Here are some best practices and examples
- There are also a number of templates you can find online to make it look great

Generally, you’ll send this as a follow-up to move the conversation along once you know a client is interested. But you won’t usually share this when you’re initially reaching out. The goal there is to introduce yourself to the potential client and share who you are and how their priorities might align with your work. You’re not making the ask, you’re asking for a meeting.

Making the sale

Now that the client is interested, it’s time to make the sale. How you arrive at this moment and how you seal the deal depends on the client. Some may prefer a more relational approach, in which you’re building trust, articulating shared priorities and working in partnership. Other clients (especially agencies) may employ a more transactional approach and are mostly focused on nailing down details. In either case, you’ll need to be clear on the following:

What are their marketing priorities?
What’s their goal: are they trying to achieve foot traffic, brand awareness, event attendance?
What advertising are they currently doing?
What value do you add to their current efforts and what differentiates you from the competition?
What’s their budget?
What are you pitching?

Experienced sellers know that this is where confidence is key. You want to approach the pitch from a position of strength: you have strong, smart content that costs money to produce, which serves a valuable, verified audience. The client needs to market somewhere and wants to reach your audience, so this is an opportunity to accomplish a mutually beneficial outcome. You’re helping them get their message out. They’re helping you inform the public. Approach it as the win-win it is.

One more thing to note: It often takes many attempts to bring someone to the table, so don’t get discouraged if a client doesn’t respond right away or you need to nudge them along. A rule of thumb is that you have to work a warm opportunity 5-7 times before it goes cold.

Executing the deal

It’s critical to have in place the systems, policies and assets that ensure a smooth process for both your business and the clients you’re doing business with. Here’s what you’ll need:

A rate card. This is a pricing sheet that outlines exactly what’s available and what it costs. Think of it as a menu from which your clients can order. It should include:
- The inventory available (ads, sizes, mentions, sponsored content etc.)
- The costs of each
Policies around payment. How will you deal with prepayment, payment extensions and contracts? How will you collect the money?
Policies around deadlines and cancellations
Insertion orders. This is a form that outlines the specific partnership in detail. It will include sizes, schedule, cost, deadlines and technical specs.

Pricing

Pricing is specific to what your market will allow and what it takes for you to do the work. Keep a few things in mind:

You’ll need a rate card for local, regional and national clients. Since most national clients (and some regional ones) will work through agencies, you’ll need to take the agency fee or commission into account when pricing — and indicate this on your rate card by specifying whether the card is commissionable or non-commissionable. A good rule of thumb is to build a 15 percent commission into commissionable rates.
There are two ways to configure pricing: CPM (cost per thousand impressions) and flat rate. Your rate cards should reflect one or the other but not both.
- CPM pricing is geared more toward publications with large audiences — 200,000 people or more is the industry standard.
- The flat fee model works best for smaller publishers. You’ll determine the prices to underscore the value of your content and the cost of producing the marketing material. One way to figure out the cost of your work is to add the monthly cost of your ad/sponsorship platform plus the monthly salary/compensation of the staffer who does the work.
- There is a standard way to measure ad sizes called Standard Advertising Units, which can help you develop your initial pricing.
Advertisers/sponsors will always want to negotiate because they want to spend the least amount of money possible. Make sure to maintain the integrity of your pricing even as you negotiate, which may mean holding to your flat rate.

Targets and goal setting

You’ll want to set monthly, quarterly and yearly targets and priorities to ensure you’re working toward specific goals and are making progress toward them. That means you’ll need an internal tracking system and articulated plans for what you want to achieve and how you plan to achieve it.

Launching a major donor/development program

The process of cultivating major donors is very similar to that of corporate and foundation giving. Many of the things you need to know and the systems you need to build cut across both efforts, but there is a key difference. While corporations or foundations have highly formalized strategies, approaches and mechanisms for giving out their money, individuals often don’t. That means sussing out whether their interests are aligned with your mission and creating structure around a gift requires a very proactive approach.

Individual giving is still a nascent revenue stream across the journalism industry, and there are two main reasons why this is emerging as an attractive path for publishers. The first is that structural changes to the way wealth accumulates alongside growth in the stock market over the past decade has meant that the average wealthy person’s income has increased. That means there is overall more individual wealth that organizations can access. The second is that major gifts are, by definition, large, and have a higher return on investment than smaller gifts. They also often have fewer restrictions than grant funding. Most fundraising professionals will say that individual major giving is the great untapped resource in philanthropy.

Setting expectations

Major donor fundraising is all about relationships and building a community of support for your cause. News leaders new to this kind of fundraising may be tempted to think about it in terms of asking wealthy people for money, but this endeavor is not solely about the ask, which is transactional. Instead, successful development is relational and consultative. It’s about helping people get excited about your cause and your community and learning what motivates them to get involved. Money is one way to do that, but it shouldn’t be the center of the relationship.

Because development is a process (the relationship) and not an event (the ask), you need to make sure you have the systems, tools and processes in place to cultivate, manage and sustain those relationships well. This includes making intentional, thoughtful asks of people and holding yourself accountable for the commitments you’ve made.

At the end of the day, you’ll want to ground your fundraising in your values: what’s important to you? What are your non-negotiables? What will you say yes or no to, and why? That’s why it’s crucial to articulate your strategy and outcomes ahead of time. You don’t want to wind up a victim of opportunism and chase funding that may not actually be a good fit for who you are and what you do. Let your values and your plan drive the conversation. Draw on your mission and your passion to be a great fundraiser.

Here’s a great resource for changing the way you think about fundraising from transactional to transformational.

Planning a major gifts program

The first step in planning a major gifts program is defining what “major donors” are to your organization. By definition, major gifts are the largest donations an organization receives from individuals: that might be $2,000 or it might be $200,000. So you’ll need to decide on the threshold for your organization. Major gifts are different from grants because you’re targeting individuals in your personal and extended networks who potentially have the means, values and commitment to support your work.

But here’s where it can get complex. Some individuals may be involved with foundations or corporations but want to give independently. Or they might want to give through a family foundation or some other formal institution. You’ll only find this out through the process of building the relationship, so your front end approach will be the same — it’s just the backend systems or workflows that differ.

This underscores the biggest difference between major gifts and corporate or foundation giving. Corporations and foundations have very clear outlines for how, when, for what and how much they plan to give, and invite organizations to apply. With individual giving, you have to do the work to tease out those details for yourself.

Here are some great resources for deepening your knowledge of major gifts:

Major gifts guide
Free fundraising training videos tailored for nonprofit leaders
Transformational giving guides and tools

Document your previous efforts

The next step is to record what you’ve done with individual giving to date. Make a list or a spreadsheet detailing:

Who are your current donors?
How loyal are they?
What is their gift size?
What have been the best sources for building relationships?
Where have you had the most success?

The idea is to learn what’s worked in the past and what you have to build on.

Consult your budget

Ideally, you’ve already created a budget projecting individual donations for the rest of the year and next year. This will help you understand where to focus and what your goals should be. Ask yourself:

What is already committed?
What is likely?
What is possible?

Build your team

Fundraising needn’t be a solo effort. Even if you are your organization’s only employee, you still have a host of people you can tap to support your efforts and build your pipeline. Leveraging your board is key, alongside any other champions of your organization. Each person will have networks they can tap and relationships they can develop. Make a RACI chart to outline who can do what and then follow up to see what progress everyone has made.

Identifying your prospects

The next step in the process is to make a list of people you want to reach out to. This should include:

Past donors who you want to continue relationships with
People in your organization’s network to map current and potential relationships
People in your community who aren’t necessarily journalism-focused but are aligned with your mission or are champions of your community

Then, you need to design a process and system for researching and prioritizing your prospects. You’re looking for indicators like past giving to your organization and past giving to other organizations like yours. You’re also looking for wealth factors like real estate ownership, stock ownership and business affiliations.

There are three ways to go about this:

Donor or wealth screening tools can help you identify these characteristics alongside focused information like a person’s net assets.
Web research can reveal a lot about a person’s history of giving, priorities etc.
Word of mouth and networking are great ways to learn more about specific members of your community.

It may help to think of this the same way you think about basic reporting. Databases, internet research and interviewing are all effective ways to locate and synthesize information. When they work in concert to confirm, triangulate and reinforce, you can feel more confident that the information is accurate and actionable.

It’s important to note that donor screening is a skillset. It takes experience to find the right information and to understand the story it tells, not to mention using it to make decisions about targeting and prioritization. Whoever is doing this work should either have this experience already, or seek out training to learn to do it well.

Now it’s time to sort and rank your list of prospects. Understand which are your warmest opportunities, which means those where the relationship is strongest and giving is most likely. Then develop a work plan for how you’ll cultivate these relationships that includes:

Which are your priorities
Who will play what role in cultivating the relationship
What is the expected timeline for your efforts

Finally, you’ll need a system to sort and track donor information and your giving pipelines. Specific software exists for just this purpose, so you may want to invest in a CRM (constituent relationship management) solution. When you’re just getting started, a spreadsheet or Airtable will get the job done.

Cultivating relationships

Now is a good time to underscore that development is not about making a list and then making the ask. It’s truly about building an ongoing relationship. That means every effort here must be tailored and responsive, and whoever is managing those relationships needs to be a people person with a keen eye for reading the room.

When cultivating relationships, it’s important to understand and take formal note of the donor’s intention. Do they want their resources used for specific things, and is this a fit for what you want to do? The benefit of major gifts is that they are often less restricted than grants, so you’re not typically submitting a line item budget and you don’t have to follow organizational rules about the specific uses of funds. That said, if a donor wants to define the use of a gift, that should be reflected in a gift acknowledgement and reflected back to the person in your ongoing stewardship.

Here are a few things to think about:

Ground your strategies in the specific relationships. Some people like an informal approach and will want to chat in person right away. Others might prefer a slower introduction, so adding them to the newsletter or inviting them to an event is the best way to build the relationship. Maybe a potential donor responds well to your big picture ideas and mission, whereas another might want to get under the hood by getting involved with a specific project. Let them take the lead when it comes to how they want to interact.
Build these different approaches into your logistics, like scheduling, meeting agendas, meeting goals, note taking, action steps and follow-ups. For example, some donors might just want time with the founder, so they’d consider it gauche if a revenue person attends a meeting. You’ll want to think about who attends which meetings, where they’re located and how you phase these interactions.
Because each person’s approach to money and finances is personal, it’s worth calling out that this process can sometimes be fraught — on all sides. It’s helpful to examine your own relationship with money as you embark upon fundraising, and also important to acknowledge that sometimes fundraising can involve a power/privilege differential. There are no easy ways to navigate this tricky territory, but acknowledging that it can be tricky is an important first step. You can explore that more here.

Though cultivating relationships involves much personalization, there are still important ways to standardize your strategy, workflows and policies.

A donor acceptance policy is absolutely essential. This will enable you to know what relationships to pursue and where your lines in the sand lie.
A transparency policy is also critical. It’s important to be upfront with your audience about who is funding your organization, which goes a long way toward building trust — especially if you’re covering your funders (hello, ethics policy). But it’s also crucial to share your transparency policy with your donors so they understand what it means to fund a journalism organization, and so they have a clear sense of your policies around donor disclosure. This may be a new experience for some funders, who might not be used to navigating the public nature of your work and their involvement. Introduce this early and sensitively so you can make sure they’re on board before you pursue the relationship further. Don’t just leave it to the end or you might’ve wasted 6-12 months of relationship building.
Keep meticulous records of all your donor research and interactions. You should have one place where you document and update things like what they’re interested in, who they interact with and what resonates with them. Maybe your hairdresser or doctor does something like this to keep track of what you’re up to and signal that they’re invested in the relationship.
Develop repeatable templates you can use for meeting collateral (slide decks, one-pagers, fact sheets) and donor tracking. Even templates for notetaking should have common prompts. Examples include: how you met the person, what’s motivating them, the level of familiarity with your work, who they know, what are the next steps etc.

Making the ask

You’ve done the research, you’ve built the relationship, you know their interest. Now it’s time to make the ask.

It will come as no surprise to learn that the way you ask should be customized for the individual. Some people will want a glossy slide deck with outcomes and metrics so they can see the return on their investment. Others might be informal and relational, and would find such a presentation off-putting or distracting. One person might want to make a decision on the spot, while another may want to talk it over with their family first.

You should have a bank of assets to draw from that includes slide decks, templates, marketing collateral and a library of stock language. If you have these ready to go, then they become a buffet of items you can choose from when putting together your proposal.

Then there’s the ask itself. Many news leaders dread this moment, but it’s only weird if you make it weird. Again, if you’ve done a good job building the relationship, financially supporting your organization should seem like a natural next step.

Making the payment

The logistics around the actual financial transaction are oftentimes more complicated than the ask itself. There are a number of ways a donor might want to structure the donation beyond a cash gift, such as donor advised funds or a stock transfer or qualified charitable distributions. What kinds of payments you’ll accept must take into account a few things:

What you spell out in your donor acceptance policy
Some payment vehicles may require board-level approval and policies, as well as specific mechanisms for accepting the donor’s assets (like setting up a brokerage account to accept donated stock)
Some sectors or communities may have a set of common practices, so take the time to learn about what’s typical in your context

What’s awkward is that you usually won’t learn about the specific way a donor wants to give until late in the relationship and you can find yourself in a chicken-egg situation where you don’t know what to prepare for because you don’t know what a donor prefers. The best you can do is to try to glean some insight into this as you’re developing the relationship.

You need to set up your website to accommodate major gifts. Do you have a Donate Page that’s inviting and well designed? Do you make the case for donating? Have you explained the tax benefits of donating and communicated your tax status? Is there an easy, accessible way for people to donate directly on your website? Is it user friendly? If you’re accepting non-cash options, do you have info on what you can accommodate? You’d be surprised how many out-of-the-blue large donations can come in if you just give people the opportunity.

Finally, it’s critical that you send a formal acknowledgement to thank someone for making a gift. This is, of course, the thoughtful thing to do, but it’s also important for tax purposes. You can find guidance and templates here.

Ongoing stewardship

The relationship doesn’t — and shouldn’t — end with the gift. Keep the following best practices in mind as you’re developing your stewardship strategy.

Different donors will prefer different touchpoints. Are they a hands-on person who would love a quarterly coffee meeting, or a hands-off person who is happy with a phone call every six months or each year? Ask yourself how often they’d like to engage, what times of the year make the most sense and how they want to do so.
Think about how people want their gift to be acknowledged. This is related to the transparency policy you’ve developed in that you should have a minimum standard of disclosure, but this aspect is more about how they’d like to be publicly recognized. Do they want to be listed in your annual report, or maybe applauded at an event? This is the sort of information you want to keep in your donor file.

It’s important to have a number of non-monetary asks and touchpoints so they don’t end up feeling like a piggy bank. Consider inviting them to a meeting or event, sending regular updates, asking for guidance on a strategic decision or with help on a particular project. This is a good way to get people involved in your organization on the front end, and is also an important way for them to continue that involvement.
Know the cycle for a donor’s potential gift renewal. This ensures you’re hitting them up when it works best for them, and decreases the chances of a missed opportunity.

Launching a reader revenue program

Reader revenue has emerged as an important piece of a news businesses’ financial strategy because it recognizes the central role audiences play in journalism’s mission-based work, and it neatly links financial health with journalistic impact.

There are a number of terrific resources dedicated to planning and executing this strategy, including:

The Membership Puzzle Project’s Membership Guide
GNI’s Reader Revenue Playbook
GNI’s Startups Playbook
American Press Institute’s reader revenue research and tools

What follows is a high-level overview of the process to launch a reader revenue program, as a supplement to the above resources.

Planning your reader revenue program

Reader revenue is — surprise! — all about building relationships with your audience and forming a mutually beneficial partnership. For that reason, we like to think of it more as community-supported revenue. And it’s critical that you make a clear, strategic launch plan.

Setting expectations

Ideally, you already have a strong community engagement strategy in place before launching your reader revenue model. After all, it’s easier to ask your audience for money if you’re already demonstrating that you’re serving them and responding to their needs.

If not, you might consider taking a step back and creating opportunities to interact with your audience. Think about where you’re already distributing your content and where there might be opportunities to directly collect feedback. That could be through social media, your newsletter or website comments. The most important thing is to have a personalized presence in those spaces and a habit of responding to people who are connecting with your work.

If you’re developing reader revenue and community engagement strategies in tandem, start by identifying and activating your biggest fans. These are the people who already care about what you’re doing and are regularly and deeply engaged with your content. This group can be your founding members or financial supporters, and you can ask them to be a test group to determine subscription pricing and/or membership benefits. View them as ambassadors for your brand and this new revenue stream, and as partners to help organically grow it through their extended networks.

It’s also worthwhile to do some cold, hard math before you travel too far down this path. Do some opportunity sizing to see if this revenue stream has the potential you think does — or need it to have. Put some numbers around how big your audience is, who might be willing (and able) to pay and what they might pay to shape your strategy. You might hold yourself to a preliminary “go/no-go” decision based on what you discover.

Know your audience

Now that you know an audience exists for this effort, it’s time to get to know them better. You need to understand who they are, what they need, how and when they engage with your work and why. This is a critical step that should be based on data rather than guesses or assumptions, particularly because those guesses can sometimes be quite wrong.

That data can come from detailed surveys or statistically significant market research, but it can also come from casual interviews or the occasional focus group. What matters is that you’re developing an informed understanding of how to serve your audience’s needs. You can read more about this process here.

Next, you need to synthesize what you’ve learned so you can develop your strategy for meeting those needs. The Jobs to Be Done framework is a useful approach because it recognizes that effective businesses — news businesses included — solve problems for people. Your audience has a job that needs doing, and your publication is clearly the one that can do it. Here’s an example from our Startups Playbook: “When an election is coming up, I want to learn about the issues and candidates so that I can make a smart decision about how to vote.”

Articulating what your audience needs and how you meet those needs gives you the focus you need to know who to target and how.

Solidify your value proposition

Chances are, your news business solves a few different problems for different groups of people. Now it’s time to categorize and prioritize those groups so you can focus your efforts and tailor your message. This is called audience segmentation. As the old marketing adage goes, if your audience is “everyone,” it’s no one.

Once you’ve zeroed in on who you’re going to target with your reader revenue program, you’ll want to nail down exactly why people should pay to engage with your product. This is called a value proposition. It’s a statement that articulates why people should use your product (in this case, engage with your publication) instead of other options (like other information sources). It’s derived from your Job To Be Done statements, and will help you make the case for revenue from your readers. You can read more about how to develop a value proposition here and here.

Determine your approach

There are a number of ways you can structure your reader revenue program:

Contributions give people the opportunity to donate directly to support your organization
Subscriptions allow people access to your content for a fee
Memberships offer benefits to people who want to engage more deeply with your publication and fellow members
Micropayments allow one-off access to your articles
Crowdfunding harnesses community support for a particular purpose

Some approaches are more relational than transactional, which can require more work to maintain but may result in deeper loyalty. It’s important to know what audience engagement and community management strategies your publication can (and will) support, and the approach you want to prioritize as an organization.

Get the right tech

Managing your reader revenue program takes a lot of thought, engagement and reciprocity. It also requires the right technology. You need to ensure that your audience’s user experience is smooth and seamless as they give money to support your organization, because any bumps or delays could result in a lost opportunity.

Again, the Membership Guide and Reader Revenue Playbook go into detail about this often overlooked and important part of the process, but we do have one additional piece of advice. There are many products that provide a one-stop-shop, right-out-of-the-box tech stack that is specially designed for reader revenue. There are also many ways to custom build connections between various free or low-cost technologies. As you’re evaluating which approach is right for your organization, it may be tempting to choose the cheaper option. And while that might be the right choice for you, keep in mind that there are often hidden costs (money or time) that you’ll want to think through on the front end. In general, it’s best to think long-term when investing in your tech stack. It does a lot of heavy lifting for you, and should work for you rather than you working for it.

Targeting your audience

Audience research reveals a lot about who your audience is. But publications with successful reader revenue programs have an equally deep understanding of what they do and how they behave.

You’ve probably heard of the audience funnel, which is a framework for the journey your audience takes from awareness to loyalty as people interact with your publication. This is important because you need to understand how people move through your funnel, where they get stuck and why they leave. Here are a few best practices:

The two main ways to understand your audience funnel are through your analytics and user interviews/surveys. This combination gives you both the numbers and the narratives to help you learn what to expect from people at each stage. For example, you may have a lot of people signing up for your newsletter, but not a lot of people opting for membership. Your analytics will tell you that it’s happening, and your interviews/surveys will give you a sense of the reasons why.
Identify who your most loyal, engaged users are. These are the people you’ll want to target first for your reader revenue program, since they’ll likely need little convincing. You might find it useful to create audience personas to help you and your team better envision who you’re serving.
Capture the right analytics. Most publications capture some sort of analytics about who is engaging with what, and when. But this data is only mildly useful if your analytics aren’t configured to give you the right information. For example, it may be nice to know that website traffic ticks up every time you publish a national politics story, but it’s better to know that those readers are one-time users who are unlikely to return to your site, whereas your local traffic spikes when you publish high school sports stories. You want to learn the habits of the audience most likely to pay for what they love.
- Most turn-key analytics set-ups are configured for larger publications. This Audience Explorer Dashboard was designed to help small- and medium-sized publications better understand their readership.
It’s important to ensure that your audience activity and editorial priorities are aligned, and to make adjustments if necessary. Take a data-informed approach to this work. If you’re seeing clear trends in people’s priorities, you could allocate more resources toward that work. And if certain things aren’t resonating with your loyal audience, you might consider pulling back. But be careful not to simply go where the audience winds blow. There’s a difference between being responsive and losing focus or even drifting from your mission. You don’t want to wind up following the money to the point where you’re no longer doing what you set out to do or serving the audience you set out to serve.

Setting goals

Once you have a solid understanding of your audience members and their behavior, it’s time to set goals around converting them into paying customers. Here are a few things to keep in mind:

Try to glean benchmarks from other organizations like yours to gauge things like typical conversion rates and the range of possible outcomes at different parts of the audience funnel. No two organizations are exactly alike, but this will help you set expectations and know whether you seem to be on track.
Think broadly about engagement metrics and understand yours. In theory, the more engaged someone is with your publication’s content or products, the more likely they are to pay. You need to know the point at which people tend to convert. It may be after subscribing for six months, but it also may be after attending an event.
Think about the lifetime customer value of your members/donors/subscribers. The upfront cost of converting them may not indicate how “valuable” they are in the long run – particularly if you find that it’s more resource-intensive to convert new members than to keep the ones you have. Here’s how to calculate it.
Consider the cost side of the equation. You will likely spend a lot of time (and possibly money) converting readers into paying customers, and you need to know if that investment of resources is worth the return. To begin this process, develop estimates for your cost of acquisition and customer lifetime value, and then update these numbers as you get real data. If your acquisition cost is consistently higher than your customer lifetime value, then you may need to reduce the time or money you’re investing in your reader revenue strategy, or find ways (such as raising prices) to earn more from each customer.
Setting goals always involves some informed guesswork. So make your assumptions based on what you know, what you’ve heard and what you’ve seen — and then update those assumptions once you have data of your own.
Audience funnels and conversion tactics are ripe areas for experimentation. Use the information you have to form hypotheses about what you think/hope will happen if you try something or make a change and then test it. At the very least you’ll learn something that you can apply to future efforts.

Consider a marketing/branding/positioning campaign

It’s important that you pay attention to all aspects of the audience funnel. You need to attract enough people to the top of the funnel to ensure a healthy influx, but you also need to continually reach out to those who are already interested to move them progressively further down the funnel. That’s why you might consider launching campaigns to market your publication, increase awareness of your brand and position it within the market. You’ll target people differently depending on where they are in their audience journey.

This takes a lot of work, so here are a few tips:

Start with the assets you have, namely your superfans who are most invested in what you’re doing. Can you perhaps leverage their networks by creating an incentivized referral program?
Carefully choose which of your products is most likely to attract top-of-the-funnel users. You want to bring people in with the lowest barrier to entry — like subscribing to your free email newsletter or following your organization on social media.
Documentation is critical. Make sure you’re collecting and recording different marketing assets so you don’t have to reinvent the wheel every time you make a pitch. That could entail:
- Writing a variety of calls-to-action and membership plugs in bulk, so you have them ready to go for different situations
- Creating a big list of messages that you can test to see which ones perform best
- Collecting testimonials from members as they join so you can produce the social proof that your reader revenue program is a good investment. Create a field in the sign-up form that captures why someone signed up and you’ll always have material to draw from.
Consider out-of-the-box ways to market your publication. For example, find strategic community partners who might also serve the audience you’re seeking to attract, and make a deal or a trade to be included in their communications or marketing materials.

Cultivating and maintaining relationships

Reader revenue work is never done, and it’s absolutely critical to think of your relationship with your audience long-term.

You’ll need to set up systems and processes for regularly communicating with and collecting feedback from members/donors/subscribers. Consider:

Thinking about what could be automated rather than done manually. For example, you could create a membership/donor drip email campaign to communicate the value of their involvement and engagement with different products or connection opportunities that your organization provides.
Conducting surveys to see how people are feeling about the product and the relationship — a Net Promoter Score survey is a good way to take the pulse of your members/donors/subscribers — and you’ll need to systematize that feedback so it’s accessible, useful and measurable over time.
Tracking churn (people who spin out of your funnel) and making it a priority to keep current members rather than just attracting new members. Often the best return on investment is taking care of the people you’ve already inspired to be engaged with your work.
Conducting ongoing audience research. Your audience’s needs and priorities will change, and you need to stay on top of how best to serve them.
- Maintain a group of people who you frequently ask for feedback
- Be proactive in seeking feedback and input. Create regular opportunities for people to share their thoughts and experiences.
- Adopt a customer service mindset to make sure your members/donors/subscribers have what they need and to show that you care.

A final word on reader revenue strategies: It takes a lot of work to successfully run a membership/donation/subscription program. Between responding to subscriber emails, writing membership copy, troubleshooting donation systems and generally providing excellent customer service for your loyal readers, it’s easy to lose track of everything it takes to do it all well. So make the invisible work visible. Document your workflows and processes. Create RACI charts to outline who does what. Check in with your team to understand what needs to be done and how long it takes. Make building and maintaining these relationships the priority it is by providing visibility and structure for this important work.

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