Retaining customers is critical, not least because it can cost up to five times as much to acquire a new customer as it does to retain an existing one. Moreover, increasing costs of living and fears of an economic downturn are causing people to reevaluate their discretionary spending. Data shows SVODs, coupled with the relative ease of canceling them, are a target for cost-conscious consumers.
- Deloitte found nearly two-thirds of Australians are concerned about the cost of maintaining multiple streaming services.
- GWI reports the second biggest reason people cancel an SVOD is because they’re not using it enough.
Key Retention Strategies
If streaming services are vulnerable to churn, and retaining customers is more efficient than replacing them, what are the most effective strategies to keep them from canceling?
- Drive engagement. Retention tactics should focus on encouraging customers to use the service.
- Communicating to subscribers there’s plenty for them to watch, and plenty more in the pipeline, should be a priority.
- Understanding viewing behaviours is also vital, and speaks to the need for a robust martech framework. For example, knowing subscribers who watched Title A tended also to watch Title B is critical first party data which should be used to market Title B to Title A viewers who haven't watched it yet.
- Promote value propositions. Consumers aren't making budgetary decisions in a vacuum. Through this lens, the cost of an SVOD versus (for example) a drink in a bar is a different calculation. Communicating the value props of your service - always on, always on-demand, exclusive content, breadth of library, or even that it’s less than the cost of a metaphorical cocktail - is key to include in retention messaging.
- Segment audiences. This is where segmentation and tailored messaging are key:
- Gen Z and Millennials would sooner cut spending on electronics than their digital entertainment bundles.
- Older generations would cut entertainment subscriptions before reducing spend on hardware. This doesn’t mean abandoning retention marketing to older customers, but it does mean working differently to keep them.
The Allied Approach
- Our customer retention strategy includes all marketing channels:
- Full-funnel paid media is essential for both acquisition and retention.
- Earned media - social, influencers, publicity, experiential - plays a critical role in establishing and maintaining brand loyalty.
- Owned media, particularly first party data, website, and CRM - are absolutely essential to driving insights and accomplishing the strategies outlined above.
- Creative ties everything together, and ensures the brand speaks in a singular voice regardless of segment, channel, or tactic.