In the Subscription Economy, the subscriber is at the center of your business. Your customers want to be recognized as unique individuals rather than a nameless count in a broad market segment. Gone are the days of product or plan recommendations based on basic profiling.
Today’s subscribers expect you to really know them beyond simple demographic account information. They want you to understand their usage history, subscription history, payment preferences, device choices and personalize your recommendations and offerings to cater to their specific needs and preferences. They also expect a smooth, seamless, delightful experience all the way from discovery to sign-up to delivery and renewal.
A failure to provide these customized experiences spells doom for your business and will most likely result in low acquisition rates and high churn rates. According to Accenture’s 2014 Global Consumer Pulse Research, nearly two-thirds of consumers switched at least one of their providers due to poor service in 2014. These consumer switches are estimated to be worth a staggering $6.2 trillion. The research also found that churn has increased by 20 percent in recent years.
Research for different industries pegs the cost of acquiring a new customer being anywhere between 5X to 25X more expensive than retaining an existing one. Moreover, even the slightest improvements in retention can have major long-term benefits on your recurring revenue.
In order to offer these customized and memorable experiences, D2C businesses need to have systems that gather and analyze relevant customer data and serve up actionable insights.
Data-driven personalization is what’ll help you increase engagement and retain customers. It must permeate your entire service and play a key role in your subscription sales and retention strategies. In the digital world, most D2C companies are drowning in customer data from various sources — behavioral data, financial data, demographic data and several other sources of data. What’s key is having it all come together in one place in an actionable way. You will need to have one system that can gather all relevant data and analyze usage patterns, subscriber preferences and financial metrics and provide you with actionable insights. These insights will help you proactively engage, upsell, cross-sell and retain customers.
Let’s look at the OTT Video space for example. According to Deloitte, video and audio will generate 89 percent of consumer Internet data traffic by 2018. But most media companies haven’t yet figured out data-driven strategies to effectively customize their offerings to subscribers.
A company that has realized the importance of personalization is The Enthusiast Network (TEN), a Zuora customer. TEN is the world’s premier transmedia network of enthusiast brands, such as Motor Trend and Surfer. TEN has deployed Zuora’s end-to-end solution for Motor Trend OnDemand to monetize its subscription-based video service and build long-lasting relationships with subscribers.
“Our beta service did not provide all the billing and subscription management options our members wanted, and we immediately saw the need to expand our analytic capabilities. With the Zuora platform, Motor Trend OnDemand can now effectively offer promotions across multiple channels based on user profiles to drive growth, as well as gain the insight we need into member activities so we can continue tailoring and improving our offerings, increase subscriber engagement, and reduce churn” said Scott Dickey, CEO of TEN.
Netflix is another great example of a company that strategically uses data to increase subscriber engagement and retention. Its renowned personalization is what makes finding a movie or show to watch easy and perhaps, even addictive. In order to deliver this smooth experience, Netflix collects data around what you watch, how long you watch, the device you watch it on and other details to customize the experience for its members. It even personalizes your homepage making it super convenient for viewers to get on and use the service. It goes a long way in making individual viewers feel specially catered to.
Traditional TV channels on the other hand base their recommendations on standard metadata such as category, director, actors, etc of programs watched. But such high-level data doesn’t really give you the complete picture. What if they abandoned a movie after 10 minutes and your entire recommendation queue is based on that director or actor? There’s a high chance that the suggestions will be ignored, unappreciated and the viewer will switch over to TEN or Netflix.
The ability to understand the kind of pricing and packaging options and experiences that your customers want and having the flexibility to offer them quickly is key. A failure to do so will result in customers looking elsewhere.
The modern subscriber wants to be recognized as a unique individual rather than a nameless statistic. D2C businesses need to meet this demand for customization to engage and retain their subscribers. And for this, you’ll need to have one system that can analyze all relevant subscriber data (usage patterns, account preferences, and financial metrics) and provide you with actionable insights.
Learn how Zuora can help you win and retain customers for your D2C business here!