Building a community that will support our art making is about revenue, audience growth and retention. In other words, it’s a business. And we believe it’s time we start measuring it like one.
- How long do our patrons support us, on average?
- How does this differ from our higher pledge supporters?
- What pledge tiers are driving our growth?
- What is our Average Patron Lifetime Value?
- What is our churn?
We set out to create a supplemental dashboard that would answer these questions and and to build it in a way that anyone could plug their data in, with minimal re-work. The dashboard uses Google Sheets and continues our pledge to open our data as a part of our ongoing Patreon Growth Experiment series.
Get the File and Get Started:
Here’s a link to get the dashboard for yourself [Google Sheet].
Why Financial Models Matter
As creators, we want to focus on the work. But nine times out of ten, it isn’t the work that stops us from being successful, it’s our fear of business.
We can make a living as an artist, but we have to believe in ourselves and invest the time to learn how to grow our community.
A financial model gives us visibility into the stability and health of the community and fan base we are building. It is a tool that helps us learn what is working and what should be abandoned. It often involves key measures such as: average pledge amount, supporter retention, churn and lifetime value.
One of the more insightful charts for the creators we work with is Pledge Growth by Tier. It lets us see how the different tiers are fuelling the total amount pledged. For us, the $5 tier is clearly a big driver of our growth.
In my work as a growth strategist, the measures that form a financial model for the health of the community are one of the first things we go about setting up, whether my client is a multi-million-dollar innovation consultancy or a podcaster looking to build their fist crowd-funding offer.
And before anyone starts shouting, we agree that non-financial indicators such as community engagement are also of value. But these engagement metrics are never a reliable replacement for financial indicators. And we fear that the majority of creators using crowdfunding platforms have a dearth of financial indicators and instead rely almost solely on engagement metrics and a single view of total amount raised.
To keep it simple, retention is how long we keep a supporter.
In 2019, Sean sat in two sessions at Podcast Movement where Patreon representatives advised that the average retention for a patron was two to three months. And that by getting patrons to pledge at higher levels, we could see increased retention numbers.
This statistic horrified me then and continues to do so now, even with the understanding that this is likely an aggregate across all of Patreon where there are many failing or abandoned communities.
Please don’t think this is the bar to beat. That certainly wasn’t the intent of the Patreon folks on the day. Anyone retaining supporters for an average of two months is in trouble. Building a healthy community capable of supporting our art is hard enough without the Sisyphean task of fighting a two month retention number.
Let’s take a look at our retention numbers at Fable and Folly . This data is as of January 2, 2020.
The 13.1 in the chart says that our current active supporters have been with us for, on average, thirteen months each. This is a solid number and gives me a lot of confidence as it wasn’t always so high.
Beneath this number, we can see how long, on average, all of our supporters stayed with us: eleven-and-a-half months. This number represents all supporters, so it includes those who have stopped their support or gone into declined status. I would expect this retention number to be lower as there are some supporters that quickly change their minds. We just aren’t the best fit for each other so they leave and this lowers our average.
Along the bottom of the chart is how long, in months, our average supporters stay with us, broken down by giving tier. We will note that this drops from 12.5 months at $5 to 11.2 months at $20. This makes sense to me. It’s easier to keep giving at a lower amount, regardless of perks. I certainly expect to review my support more often on the shows I give more than $5 to.
Note: All of these become YOUR numbers when you create a copy of this dashboard and upload your data to your sheet!
Now let’s look at the Retention of Lost Patrons chart.
By looking at people who halted their pledge, we can come to understand how well we are doing even with patrons who have left. How many of our lost patrons are dropping out in the first few weeks or months? The chart shows this number climbing from 7.1 months to 8.5 months over the past half of a year. This tells me that we are doing a better job at retaining our patrons across the board.
I also take this to mean that we are doing better at connecting with our supporters, engaging them weekly and ensuring they are aware of the experiences and opportunities available to them.
Retention is one of the key things to know about our supporters. In a nutshell, we want retention numbers that are climbing, if at all possible.
When retention is very low or dropping, I tend to ask the following questions:
- Are patrons aware of the benefits of supporting?
- Are patrons accessing the benefits provided?
- Are we spending enough time being accessible to our supporters on patron-only channels?
- Is this a sign of a weakening relationships with our newer supporters? (Often an issue when we begin to scale up our reach)
Better Revenue Growth Charts
Did you know that the Income Growth chart on Patreon includes Declined pledges? At first I thought this was to allow for anyone whose declined status might change, but my data includes declines from as far back as 2017. I definitely find this number inflated and misleading.
In our dashboard, Total Pledge Support shows only active patrons. And we’ve also estimated our take home by assuming a 10% fee to Patreon that can be overriden on the START HERE tab to match your Patreon plan pricing.
Further, we’ve called out the Average Amount Pledged. This is an extremely important key measure to pay attention to. Small changes in this can lead to significant growth in our Lifetime Values and Pledge Growth. Here we can see that we’ve gone from $3.46 average pledge amount in the last month to $3.53 this month.
Understanding Churn and Patron Lifetime Value
Churn is the rate at which people stop supporting us on Patreon.
This is important because acquiring supporters who are willing to support us is expensive and hard work. Minimizing churn is about maximizing return on our marketing and increasing the stability and health of our community.
In an article on the Patreon blog that I now can’t find to reference, they speak of 5% churn being a good target number. I agree. This means that every month we would lose, on average, 5% of our supporters.
Average Lifespan = 1 / CHURN
At 5% churn, the average lifespan for a supporter would be 20 month.
Why? Because math. We don’t need to worry too much about this average lifespan number as it’s just being used in a classic equation to come to our Average Patron Lifetime Value.
We now know how long people stay with us and earlier we came up with the average amount pledged per month (of active patrons). So now we just multiply the two together to get our Average Patron Lifetime Value.
Avg. Lifespan Value = Avg. Lifespan * Avg. Amount Pledged
In our case, this means we can expect each supporter to contribute just over $46 each. As with any average, some will give less and some will give more. But this number helps us understand how much to invest in acquisition of new listeners and supporters.
What’s with the Different Retention Numbers
You may have noticed that we are computing retention two different ways. This is correct. At some point I may go through and consolidate this methodology, but I like seeing the number come out similar through two different methods.
That’s it. It’s all over to you now!
We provide no warrantees on the accuracy of the Google Sheet we are sharing. It is simply a tool we find extremely useful for our business.
I look forward to your comments and feedback. Please don’t hesitate to ping me with any questions, but please be sure to check out the instructions I provided.
Here’s a link to get the dashboard for yourself [Google Sheet].
A Call to Patreon
Patreon has been rolling out steady improvements to it’s platform and online interface for the past year and these efforts are truly appreciated. But we could really use better tools to understand our supporters and the strength of the communities we are building.
If anyone from Patreon is paying attention to this, it would be great if we could track some of these values historically and with even more accuracy within the Patreon dashboard as there are limitations on what I can do with the data we have access to at this time.
Oh, and because I’m lazy, please email me if you know what the NULL status entries are in the Patreon data file as I currently strip them from many calculations.