The art and science of analyzing your Patreon data

Kenna Nelson leads Patreon’s Product Data Science teams, which build the analytics, reporting, and business intelligence that help shape Patreon's tools and products for creators and patrons. Prior to her current role, Kenna worked in data science at Stitch Fix across retention, growth, fraud, and customer service.

Whether diving into your membership data sounds exciting or scary, this episode of Backstage with Patreon will offer you some new tools to help you manage your creative business.

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Episode transcript

Brian Keller:
Hello creators. You are Backstage with Patreon, where we open the curtain on how to build a thriving business on Patreon. I'm Brian Keller from the Creator Success team, and today's guest is Kenna Nelson, who leads the Patreon product data science team. The team builds the analytics reporting and business intelligence that enables Patreon teams to build the products for our creators and for patrons. Prior to Patreon, Kenna worked in data science at Stitch Fix across retention, growth, fraud, and customer service. Whether diving into data about your membership sounds exciting or scary, our aim is to give you some new tools to manage your creator business. So let's get started with Kenna Nelson on Backstage with Patreon, and would love to hear what gets you so excited about working with data that you've made it your career and what you do day in, day out.

Kenna Nelson:
Yeah, what gets me most excited about data is its ability to turn unknowns into knowns. Contrary to maybe popular belief, there's actually a lot of creativity that goes into analyzing data. It's a really healthy mix of art and science, which I try to keep that approach in everything that I do, and I think that kind of healthy mix is something that a lot of data teams can get wrong. A lot of people misunderstand. But really data analysis and analyzing data is a way to help you make decisions, and I like empowering people with that information to make great decisions.

Brian Keller:
Well, I think that's very fitting for Patreon creators. We're talking about art even when it comes to the data side of things. Can you give me an example of that? Where does art come into how we actually work with data?

Kenna Nelson:
Yeah, so if you think about what data is, if you look at a chart, if you look at a number, there's a lot of different ways that you can actually interpret that number, and that's really where the art will come into the field of data science, which is really translating that number into a decision or an insight that you might use. There's not always an obvious answer, but the art is really figuring out what to do with the quant hard number.

Brian Keller:
Good. Well, I'm sure we'll come back to that in a little bit, but for folks who aren't familiar with data science teams in product companies and tech, how does your team work with other teams at Patreon? How does that information actually play out in the product that we're building?

Kenna Nelson:
Great question. So the way that we work with other teams, we act relatively embedded within our product teams, so we work really closely with our engineering, product PMs, our design teams, and work really cross-functionally with those teams. And we try to be experts of the product itself on the data science side. Having a really deep understanding of the product itself helps us to better understand the data underlying the product, and helps us to better do that translation between the hard numbers and actually what it means.

Brian Keller:
Well, let's start hitting creators with some actual data insights, tips, best practices that we've got. Do you have a particular type of quote or piece of data that you tend to go back to a lot, maybe a favorite of yours that we can share?

Kenna Nelson:
I'd love to hear what yours is as well. One of my favorite pieces of data is we've done a lot of research on the best way to design your membership, what your tier prices should be, how many tiers you should be offering, what benefits you should be offering. And when we look at what creators do across Patreon, we find that creators are doing a lot of different things, and there's not necessarily a one size fits all right answer to how to design your membership. So we see that the most popular way that creators design their membership is only used by about 2% of creators. So there's tons of different ways that you can design your benefits, your tiers, your prices, which maybe that's too much of a statistician's point of view of there is no one right answer, but I just think that's so empowering to just know that, great, there isn't one right answer, so me as a creator, I need to think about what's right for me, what's right for my fans, and how I want to run my membership.

Brian Keller:
All right, so some of these are classic data that we've done around tiers and structures and all that, but I'm sure people would love to know what's hot off the presses. What's something that your team's working on now that represents a little bit state-of-the-art data that we're getting?

Kenna Nelson:
What I am most excited about right now is the work that we're doing to improve our insights dashboards, the dashboard that you can find in your Patreon that show you information about your business on Patreon, information about your memberships, information about what people are liking, what people are not liking. We're going to be making a lot of improvements to those insights dashboards. I just got out of a conversation very recently that detailed some of those improvements, and I'm so excited for all the creators to see what's coming.

Brian Keller:
There's a lot of teams involved in putting together those dashboards and deciding, but if it were up to you, if you could wave a magic wand, what's a piece of data that you would love all creators to get access to?

Kenna Nelson:
Yeah, I think understanding how much traffic a creator is getting to their Patreon page, even before those fans hopefully convert into paying members, understanding who's even coming to my Patreon page can help creators to understand how to build a better page, how to build better membership, how to build better benefits, better cater to the fans that are actually coming to their page. It feels like there's a pretty big gap right now without having that information available.

Brian Keller:
Yeah, that's definitely one of the most common questions that my team gets working with bigger creators to share some of the information about traffic. I think that's great that we're starting to figure out how to get that to all creators out there. Well, let's try to break down for creators of different experience levels, different comfort with data, something that we think we could share with them, something that they could use and start to put into practice. And let's start on the easy side there. Someone who's really apprehensive about data, doesn't know where to start, doesn't always feel comfortable doing it, what's something that they could start with to actually make that a little bit a part of how they manage their business?

Kenna Nelson:
Regardless of your level of comfortability with data is to just remember that data is supposed to be helpful. Ideally, you're not stressed out by data. Ideally, you are using data to help you make better decisions and better understand the world. So really approaching it as data shouldn't be daunting, it should be helpful, and making sure you have that mindset is what I would give to any creator. For someone who's maybe apprehensive about data, let's start with the basics. On Patreon, you're trying to run a recurring revenue business. Two aspects of a recurring revenue business: acquisition and retention. Are you acquiring new memberships, and are you rotating existing memberships? So understanding those two aspects of your membership business are where I would start for any creator. Our average conversion, or the conversion that we see on average from off platform subscribers or people who are consuming your content regularly to actually becoming a Patreon member is anywhere between 0.005% and 2.5%.

So starting to look at, all right, how many followers do I have out in the world, and then how many people are on my Patreon, calculating that conversion rate can help you understand where you sit on that spectrum of 0.005%, which is a really small number, to 2.5% of your followers actually being members, can help you understand how healthy that part of your business is. On the other side of things, on the retention side of things, normal retention we consider to be anywhere between about 70 to 95%. That's a pretty big range. That varies quite a bit based on the prices of your tiers and what you're creating, but generally starting to understand what your retention looks like right now, where it sits within that range of about 70 to 95, and is it changing month over month as you're bringing on new members, as you are trying different tactics within your membership, understanding how your membership retention is changing.

Brian Keller:
Well, let's dig into some of the numbers you were quoting. I think these are really useful for creators there. So when you're talking about a conversion rate, so the result of that is someone making a pledge on their membership. What do you think a creator should look at in terms of the top of that, the number they're starting with to get a sense of their whole audience? Is it anyone who's ever viewed your YouTube videos, people who are subscribing or commenting? What do you recommend?

Kenna Nelson:
It'll differ for every creator based on what they're creating and where they live in the world. So for instance, you should think about who do you think will be a great fit for your membership offering? Someone who's viewed your video once is maybe they really were captivated and they loved what you were creating, and they were willing to then come pledged to your membership. More likely it's people who are consuming content on a regular basis, people who decide to follow your channel, wherever that might be, or are followers of you and are consuming it more regularly. That can be tricky to find depending on where you live in the world. There's some platforms that make it really easy to understand how many regular followers you have. There's other ones that are a little bit harder to understand.

Brian Keller:
All right, and then let's turn our attention to the retention, so you're talking about that 70 to 95% range. And so a lot of that might vary based on the audience, the offering that the creator has, but we should also tell people how does it tend to vary based on the tenure? So how long someone has remained in your membership, I think that's an important dynamic for creators to understand too.

Kenna: Yeah, that's a really great point. We often see this trend where new memberships often what we would call churn or decide to cancel at a higher rate than memberships that have been around for three plus months. On average, creators see a higher rate of cancellation within the first one to three months of a membership. Once a membership makes it past three months, it's more likely that that membership is going to stick around for a while. They're liking what you're doing, they've gotten a taste of what you're putting out within the first three months, and they want to stick around. People will drop off, of course, as things come up in their lives, but generally, we see this increase in people sticking around with time.

Brian Keller:
Yeah, it's really important advice, and that's often what my team is talking to our creators about. You really got to focus on that new member experience. What does it look like for them to get a welcome note for you? What is the content that they're going to see coming up when they approach that first month of membership? What are they going to get excited about that they're going to keep seeing? Well, so let's turn our attention to more of our advanced data users, folks who are like, "That's the easy stuff. I've already got a great handle on that." Are there some more sophisticated things you see creators doing or you'd recommend that they could dig into data in a more sophisticated way?

Kenna Nelson:
Once you understand those two aspects of acquisition and retention, then asking why. Why are these things happening? We already started talking a little bit about that with your follow up questions, but then seeking out data points that help you answer the why of why does my acquisition look the way that it does? Maybe I can go look into who my followers are and understand how I can get more followers at the top of the funnel to convert. Maybe I can better understand my members through things like polls or just asking them, "What made you decide to convert?" Getting additional data points there can help you just better understand that acquisition and retention part of your business. There's also a lot of best practices that I'm sure are talked about in a lot of these other podcast episodes that I don't need to be the only holder of those stats, but things like starting to understand what other offerings should I be giving to my members, things like annual memberships. I think 32% of members say that they want an annual membership. They want to be able to pay for an entire year upfront.

We see other tactics, like, you mentioned some of these things, connecting with your members within the first three months after they start their membership, that's really important for keeping them around and keeping them engaged and happy with what they're getting from their membership. Also, tactics giving people who haven't yet converted teaser or previews of what you are creating on Patreon through some sort of teaser tactic or campaign, that tends to drive really high conversion and engagement. I don't have an exact stat for you, but we see that consistently being a winner there.

Brian Keller:
Yeah, that's really impressive that almost a third of members actually want annual memberships that we've seen, and a good sign there's a lot of untapped potential in some of these features, these abilities to add onto membership that we're seeing there. Have there been any launches from the Patreon team, new product areas that have really surprised you in some of those stats or metrics, how well something has performed, how much adoption it's gotten among creators or patrons?

Kenna Nelson:
We launched Patreon Video last year, and I've been wildly impressed by the numbers that we're seeing with that. Generally, creators are coming back to use Video, great sign that they're liking it. We get feedback about things that can be improved. We're working on that. But generally we're seeing really great consumption from fans. People are watching videos that creators are creating, and creators are continuing to create videos with Patreon Video.

Brian Keller:
Awesome. Well, we've mostly talked about data on Patreon's platform. That's our main domain. But for creators, they're probably also thinking about what other data could they be pulling in from other platforms that they're part of, or even the idea of generating their own data about their audience. What else do you recommend for creators to add to what they can get on Patreon to get a full picture of their business?

Kenna Nelson:
Yeah. In terms of off platform data, the most common sources that we see and we recommend are social media analytics, dashboards, things that you're getting from Facebook, from YouTube, et cetera. Also, some creators decide to use an integration with Google Analytics. I would say that's probably more of an advanced data user, someone who wants to consume data, really deeply understand the traffic that's coming to their page. Hopefully with time, our on platform insights dashboards will make it so that Google Analytics is no longer a necessary integration. So those are the two big buckets of off platform data. In terms of then on platform data, some of the obvious ones, like our insights dashboards, our patron dashboards, patron relationship manager, exit surveys, et cetera. Also, like you said, generating your own data from things that are already happening on Patreon or offerings that we have. Things like surveys or polls, reading through comments and understanding the comments that your members are leaving, those can be really powerful tools for better understanding what they're looking for, what they're talking about, and how to better serve them and bring them along for your creative journey.

Brian Keller:
Awesome. Well, early on, you talked about the art of working with data. I wanted also ask you, what are some of the pitfalls? How can creators go wrong in how they use data, interpreting it the wrong way, coming to the wrong conclusions?

Kenna Nelson:
I think two of the biggest pitfalls that I see are fearing the data, first and foremost, being scared of the data, being scared of what it might tell you, not knowing what it's telling you. So generally approaching data through a lens of curiosity over fear, being really curious about the data that you have in front of you, asking what it means, trying to understand better what the data is showing, being really curious. Why is this line trending up? What is this line even mean? What is this number? And just taking the time to ask those questions and better understand the data. The second pitfall that I would say is being too consumed by data that suggests failure or something not going right. The way that we approach data internally is everything that we do we're learning from it, so we have this really learning centric mindset. And we think a lot about experimentation and expecting that if you try something, it might fail. Chances are actually that it will fail.

And whatever you learn from that experience, you can take that into your next endeavor, your next experiment, and continue to iterate towards a better solution down the road. So really bringing that experimentation mindset to your business to when you're interpreting data and looking at data, I think that's that's going to really bring good things for you.

Brian Keller:
Awesome. All right. Well, that's a good place to wrap us up. We've covered a lot of great stuff. We talked about benchmarks for acquisition, that 0.005% to 2.5% conversion rate for retention, anywhere between a 70 to 95% retention of your members. Some great stats about annual memberships and Patreon Video and how that can help drive membership growth, but also all the different data sources that creators can be using and incorporating both from Patreon and from some of the other platforms that they're on. And I love that ending message. Don't be scared of the data. Use it to figure out how to grow, but also, it's okay. There will be experiments, there will be things that don't work out there. So thanks so much, Kenna, for being on the show.

Kenna Nelson:
Thanks, Brian. Loved being here.

Brian Keller:
To catch every episode of Backstage with Patreon, follow or subscribe in your podcast app. We also have transcripts available at patreon.com/backstage. You're growing as a creator by listening to the show, so why not share the insights from this episode with another creator on Patreon who is running a creative business? We'd love to have you as an active collaborator with Backstage with Patreon. Come join the discussion in the Patreon Creator Discord. Follow the link in the episode notes, and you can get answers to your follow-up questions directly from the guests, and weigh in on what topics we'll be covering next. Editing by Tyler Morissette. I'm Brian Keller. See you next time Backstage.