Episode 22: Scalable and Sustainable Subscriber Growth Through Unique Partnerships with Rogan Sage, VP of Growth at Perlego

IIn this episode of the Subscriptions: Scaled podcast, Nick Fredrick, President of Rebar Technology Solutions, is joined by Rogan Sage, VP of Growth at Perlego.

What is Perlego?

Perlego is the verb "to read" in Latin. Perlego, the company, is an online library of academic resources and tools available through a subscription model. Their primary subscribers are students looking for affordable textbooks. 

Perlego is like the Netflix, or Spotify, of textbooks. They're making textbooks and learning tools more accessible and affordable for students all over the world. 

Capitalizing on a Media Industry Trend 

"Access over ownership" is a trend that picked up steam across all types of media over the last decade. Movies, music, and books have become products that people are accustomed to paying for access to and don't feel the need to own. 

Customers and subscribers embraced the trend before the publishers. For consumers, the model makes things more accessible and affordable. 

The tricky part was getting publishers to embrace the model. 

Perlego has to manage a delicate balance between the publishers they get the product from and their actual customers who pay to access the product. 

Perlego's goal is to make sure it's profitable for publishers and remains affordable for subscribers. 

Journey into EdTech

Rogan started his career working for a community-based app he used while attending university. However, he quickly realized that their business model wasn't built to grow as fast as he'd like. 

So he switched gears and went to work for a fast-growth edtech company. That business eventually sold to Chegg.

Rogan then went to work for a student social network company. They discussed integrating with Perlego, but the collaboration never happened. As the student social network company pivoted away from being a student social network, Rogan decided he wanted to continue working in edtech. And that's how he ended up at Perlego.

The previous businesses Rogan worked with weren't subscription-based, but he had studied the subscription model when he worked for those previous businesses. Thanks to this, he wasn't completely surprised by the uniqueness of the subscription model when joining Perlego. 

At Perlego, Rogan combines what he learned from his previous roles and the relationships he formed to help establish a clear growth path. 

Variable Use vs. Constant Subscriptions

It can be hard to model out churn and retention when the use of your product varies month to month. Rogan shares that they have the extra challenge of not having enough data to model predictions. So they use proxies to build models. 

One proxy they use is organic Google search data to model out demand. Then they compare their stats to the Google data to judge how they're performing. 

Acquiring, Retaining, and Reactivating Subscribers

Perlego's main growth driver is SEO. Referrals are another significant driver of growth. Many times a student hears about a book they need the first week of class. That results in a Google search. Perlego tries to optimize their site to be what students find when searching for specific textbooks. 

When students no longer need books, they'll likely stop their subscription, so Perlego tries to get subscribers to 'pause' their subscription instead and come back when they need it without stopping completely. 

The goal is to fit the subscription into the natural usage of their subscribers. 

Perlego is continually testing when it comes to acquiring new subscribers. For example, they've tested discounts versus free trial access. Their core offer includes a two-week free trial. But they also have a coupon system to test discounts.  

They've found that extending a free trial is more appealing to subscribers. But, ironically, subscribers end up paying more than they would if they went the discount route. 

Rogan says they'll continue testing because it helps them learn—and for growth, you have to always be learning.

Delivering a Media Subscription

Perlego only has two offers: a monthly or annual subscription. Both offer unlimited access to content.  

They're attempting to move into features that enhance the experience of accessing content on their site. The goal is for subscribers to have a better experience than what they get from other resources.

Establishing Relationships and Brand Reputation

Perlego has two unique opportunities for growth that you may consider for your business. 

First, the subscriber for their business may not always be the one paying for the subscription. Rogan sees that as an opportunity to include messaging that taps into that aspect, by making sure to tell potential subscribers to consider alternative payment options for their subscription. 

Second, their subscribers are usually forced to buy their product. A professor tells them they need to have a specific book for their class, leaving students with the need to make a fast decision about where to get the books.

Perlego has a goal of being the brand students think of when they think of textbooks. Have you thought of being the brand your potential subscribers think of when they think of your product? 

One way they're doing this is by leveraging interesting media relationships. These relationships allow them to get in front of potential subscribers as early as possible. So as soon as they find they need what Perlego offers, Perlego becomes the solution they turn to.

They do this through the university admissions organization in the UK, university reading list providers, and textbook comparison sites. All these options help them get in front of their potential subscribers at the almost perfect time. 

They've also started relationships with "corporate sponsors" like banks who are buying subscriptions for their student customers.

Building vs. Buying Technology Solutions

Perlego is a global business with different needs in different areas. They deal in international markets and take payments in 12 currencies. They're currently using Stripe, which allows them to accept Google and Apple Pay. 

As far as other technology, Rogan says if something is complex, it'd be foolish of them to try and build it themselves. So for most solutions, they use third-party providers who have already tested solutions. But for any core applications that are not easily available somewhere else, they'll build a bespoke solution.

To hear more from Rogan, tune into this episode of the Subscriptions: Scaled podcast.

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