One of the things you learn in direct sales is the notion of the sales funnel. In the business of journalism, the sales funnel helps publishers track how you make someone aware of your product and convert them into paying for one of your products.
The four stages of the sales funnel are a potential customer’s awareness of the product (it exists), interest (it might solve my problem), decision (I want that product), to action (I will buy it). This article explains the basics.
A new Canadian network called Indiegraf designed a sales funnel to help independent local journalists develop their own business model for producing quality and earning a living from it. (Thanks to Sarah Scire and Nieman Lab for their report.)
The model is based on reader payments, recognizing that digital advertising has been taken over by Google, Facebook, and other tech platforms.
Their sales funnel model assumes that a community of 85,000 people can support one local journalist with subscription revenue. The assumption is that about 6% of the potential audience will be interested enough to sign up for an email newsletter–5,000 people (Publishers rediscover the power of email).
Other studies show perhaps 15 to 20 percent of the public is actually interested in reading the news on a regular basis, so Indiegraf might be conservative in their estimate (Creating value for users).
And finally, they assume that about 10% of the people who are reading their news will actually be willing to pay, either as a contribution or some form of subscription. This estimate is about right, based on the annual studies of the Reuters Institute for the Study of Journalism (2019 report, p. 34).
Indiegraf offers partners who join the network support in technology, marketing, and sales, all of which journalists tend to need help with. The collaborative model makes sense. It spreads costs and risks.
They also have developed a realistic business model for a subscription-based business based on real consumer behavior in the real world rather than wishful thinking.