If Round 1 of the streaming wars was an arms race of new players into the space and Round 2 was about winning and keeping customers, Round 3 looks like it may have taken on a much darker outlook: the battle against subscription fatigue.
Netflix’s shocking recent revelation that it expects to lose more than 2 million subscribers by the end of summer (and perhaps start putting ads into its content) is perhaps only the first domino to fall. Meanwhile, CNN’s short-lived foray into the streaming space lasted all of one month. These aren’t isolated incidents. According to a study by Antenna, there were 30 million cancellations of streaming video subscriptions in the U.S. in Q1 of 2022 alone, 12% higher than any quarter since the consultancy started collecting data in 2019.
The explanation behind all this churn is simple: customers are streamlining their spending habits around fewer services. Eighty percent of U.S. consumers subscribe to at least one paid streaming video provider (and four different ones on average). But, according to a digital media trends survey from Deloitte, 20% say they are considering canceling at least one of those subscriptions in 2022.
Simple household economics creates a new conundrum for media companies: how can you keep customers from deciding your platform is no longer worth the cost? Deliver the best content and viewer experience possible – ideally in the first three months of acquiring a new customer, according to my colleague Markus Schäfer.
Create seamless, personalized experiences
According to research from Gartner Group, 80% of a company’s future profits will come from existing customers. Further, it costs five times more to acquire new customers than to retain existing ones. Yet most companies spend the majority of their marketing budget trying to acquire new customers.
With new streaming services popping up every day and subscriber churn increasing, you must invest in subscriber retention and loyalty programs to survive and thrive.
No matter how good a personalized recommendation engine or user experience is, consumers won’t stick around if they don’t find content that speaks to them.
The old done-to-death cliche “Content is king” still holds true. Depth and variety of movies, TV series, news, comedy, sports, and so on, are what primarily drives people to try a streaming service, and it’s ultimately why they’ll stay. No matter how good a personalized recommendation engine or user experience is, consumers won’t stick around if they don’t find content that speaks to them.
What also keeps them around is superior self-service offerings. Implementing platforms that emphasize simple tools for users to, for instance, update their payment information, receive personalized subscriber service on any device, or upgrade their packages will help you rise to the top.
Use analytics to understand customers
Media companies collect a lot of data. Use it to derive actionable insights and improve the subscriber experience. For example, pay attention to downward consumption trends, which can signal a subscriber’s propensity to churn. Monitor service interruptions and viewer experiences (buffering, streaming quality, fidelity metrics, etc.) that drive frustration and could cause churn.
Create a proactive subscriber care strategy that involves reaching out to customers who are less engaged and/or impacted by service outages or inferior viewing experience.
Give your service crew the tools they need
Equip care agents with the tools they need to connect with subscribers, including a customer relationship management (CRM) platform that acts as a single source of truth for subscriber data. With a CRM, you can create a complete view of each subscriber, including:
- Likelihood to churn (with the reason why, such as performance issues)
- Service or case history
- Device preferences
- Content engagement
- Top interests (e.g., action movies, sports, etc.)
This 360-degree view helps you maximize subscriber care agent productivity, and helps product and marketing teams improve and further personalize your overall subscriber experience.
For example, if a subscriber makes multiple and frequent customer service contacts due to buffering issues, the system can flag that she is likely unsatisfied and at risk of churning. Based on this signal, the subscriber can be placed on a churn-prevention journey powered by a CRM platform. The subscriber receives personalized communications with acknowledgment of the issue, an exclusive offer, and reminders of new content she’s sure to love.
By serving subscribers intelligently, you can create seamless, personalized experiences that not only delight users, but converts them into long-term customers who can’t live without their subscriptions.