Winning new customers requires heavy investments in money and resources. Customers are often unwilling to pay for media content: it’s hard to gain them in the first place, and even harder to retain them. Finding a way to get customers addicted to your service once you win them is fundamental to ensure a consistent customer base over time.
Know your customers in order to hook them
Knowing your customers’ preferences and behaviours is the foundation to building a relationship with them. Different people have varying types and behaviours of media usage and you want to be sure to cover them all. For example, a common strategy in the music industry is to “hold” content on the provider’s platform, so that they need to stick to the subscription in order to enjoy the music they love.
Elements of addiction
At a human behaviour level there are four elements to why people stay with their service provider: content, contract, inertia and superior experience. The latter is the one that ensures a higher rate of attachment. Customers get addicted to a media offering when they recognise that the experience provided from the business is superior. The quality of the content, customised information, and timely engagement are key factors that drive addiction to your service.
Services to enhance customers addiction
Companies need to know their customers on a profound level to be able to provide something people really want and enjoy. The option to receive customised perspectives on specific customer interests, or to interact with content, are examples of desirable features of today’s media offering. For instance movie platforms suggest content based on customers preferences and give them the ability to review it and feedback on future suggestions.
Cost of customer acquisition vs relationship management
Large customer acquisition budgets make sense in a start-up or market entry situation, while customer retention offers and win-back schemes can be effective in a the face of increased competition. Instead of defaulting into allocating a percentage of revenue to new customers, organisation should closely examine where in the customer lifecycle they get the most out of their investment. This can lead to significant shifts of budget from sales and marketing to operations and customer support.
Addicted customers don’t defect
The quality of the service is what creates addiction. People value well designed experiences. They judge a service provider by the quality of all the different interactions they go through during their lifecycle. Knowing what will happen at these different stages helps companies to be proactive and prevent defection.
Media Addiction Disorder
You can build different kinds of relationships with your customers. There is movement from the stage where they’re unaware of your existence, through a phase where they’re indifferent, or feel positively about your brand, to needing you, and finally a “can’t live without it” phase. In order to get customers hooked you need to move them at least to the stage where they really care about you. You need to design an experience that takes into consideration their needs, desires, expectations.
Shift the focus from marketing to experience
By investing more in the actual experience of the media service and identifying relevant addiction elements for different customer segments, media companies can ensure a consistent customer base over time. The goal should be to create an experience people won’t want to live without. Getting people addicted should become a priority over acquiring new customers.
Shifting budget from marketing to operations
Digital media companies have the tendency to assign considerably higher budgets to customer acquisition than to retention. However the cost of acquisition is usually ten times higher than that of customer retention, which represents a higher margin. Getting the retention strategy right also means less investment is needed for win backs. Shifting some of the budget from marketing to operations and putting in place the right retention strategy ensures a higher net customer base with the same investment.
Services to keep customers hooked
Winning new customers is expensive and time consuming so once you have them, investing in addicting them to your service for a long period of time becomes key to ensure a consistent customer base. By moving some of the marketing budget to tailor made retention strategies around customers’ addiction elements you will be able to design experiences your customers will be unwilling to do without. Less people will defect so you won’t need to invest as much on acquiring new users.
By Ben Reason, Founding Partner at Livework.
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