An engagement-based pricing model to accelerate growth

From the very beginning of its subscription journey, the Financial Times recognised the importance of the B2B business model. Since 2003, its B2B business (now rebranded as FT Professional) has grown to become a lucrative part of the FT’s subscription approach due to its higher potential for growth and significantly lower churn rates compared to its B2C counterpart.

One of the key strategies FT Professional adopted to accelerate growth is its pricing strategy underpinned by an engagement-based pricing model. In its most simple form, engagement-based pricing is a dynamic pricing model that ties compensation directly to an audience engagement metric rather than fixed rates. Instead of charging a flat subscription rate or providing a volume discount, FT Professional offers an engagement-based pricing model where the client only pays for the actual usage/engagement - the number of engaged readers on the B2B licence.

Engagement-based pricing at the FT is best explained with the following diagram:

At the start of each licence discussion, the FT and the client establish a number of core readers which the client will be paying for. In the above example, that’s 30 core readers. The FT, in addition to providing access to the core readers, also provides access free of charge to additional readers, called “non-core readers”. In this case, 60 non-core readers.

The idea is that during the life of the licence, FT Professional deploys different tactics to ensure that core and non core readers are engaging with FT.com and getting value from their subscription. In doing so, this creates more engaged readers on the licence who are then priced accordingly at the point of renewal.

If you would like to find out more about how to implement this engagement-based pricing model and the successful tactics FT Professional have used to achieve year-on-year growth for over 10 years, get in touch here.