Customer loyalty and retention have become something of a buzzword for the online entertainment industry. As the digital entertainment marketplace becomes increasingly competitive, the leading brands and platforms must do everything they can to retain their loyal customers.
Industry analysts have said in the past that it’s seven times harder to land new customers than it is to keep existing ones. With many entertainment brands increasingly operating on subscription-based models, customer retention is more integral to a company’s bottom line than ever before.
The reality is that today’s customers are no longer measuring their satisfaction based on the cost of the service offered. Instead, most consumers now determine their happiness with an entertainment platform based on their general user experience.
Below, we’ll explore how the subscription model is working for established entertainment brands, as well as alternative methods used by brands to incentivise long-time customers to stick around and potentially become brand advocates.
The way we consume entertainment content is changing
Although traditional companies in the entertainment industry have struggled in the last couple of years, those adopting subscription-based models have fared rather better. The likes of Netflix, Disney+, and Amazon Prime, which offer subscription-based on-demand content for a monthly fee, have experienced significant uptake in their services.
Ofcom revealed that, in the last two years, some 12 million Brits opted to sign up for a subscription-based entertainment service that they hadn’t considered using before.
Furthermore, Zuora’s Covid-19 Subscription Impact Report found that over-the-top (OTT) streaming platforms that bypass the need for satellite or cable networks saw subscriptions soar by 400% year-on-year between March and May 2020 – when the eyes of the world really needed it. The biggest challenge for the likes of Netflix – who were said to have added a further ten million subscribers to their bottom line – has been to retain them beyond the pandemic.
How the big-name brands maintain customer relationships
Pivoting from customer acquisition to retention strategies has been key for OTT entertainment providers in recent months. The biggest benefit for many of these brands is that subscription-based models give them unique access to rich data on their customers. Whether it’s a customer’s personal interests and hobbies, or whether they have a young family. All of which can be useful for OTT entertainment platforms to curate and tailor their offerings, ensuring a more personalised customer experience.
It could be a discounted package covering all their favourite movie genres or sports. All of which shows that the platform truly cares about delivering the best possible content to each of its customers. Another commercial benefit to ‘bundling’ entertainment packages is that customers are more likely to continue making a bundled subscription payment, even if they become unsatisfied with one of the products.
The entertainment industry is by no means alone utilising package bundling to attract and maintain its customer base. Tech giant Microsoft experienced a huge uplift in customers by bundling its software such as MS Word, Excel, and PowerPoint alongside its operating system. In fact, its software market share rallied from 7% to a whopping 38%.
How do other entertainment brands succeed away from product ‘bundling’
There are many other brands in the online entertainment industry that don’t lean on product bundling so heavily and still successfully retain customers to their sites.
NOW TV is owned by Sky Group and is another OTT entertainment provider, but opts to do things a little differently from the likes of Amazon Prime and Netflix. Instead of using rich customer data to tailor their packages, they wait to entice customers to stay with lucrative retention deals. NOW TV is an OTT service that is contract-free for users. This means they are free to cancel their membership or passes whenever they wish.
When a user opts to cancel a membership or pass, NOW TV is renowned for offering a promotion that most customers simply cannot refuse. For example, their Sky Sports membership costs £33.99 a month. It has been known for those considering cancelling their subscription to be offered a three-month pass for just £19.97. This is particularly useful for football fans that may only need Sky Sports and NOW TV during the football season. However, the £19.97 three-month plan keeps the customer tied in during the off-season, ready for NOW TV to market a new subscription plan to them at the start of the new campaign.
Some entertainment platforms look to reward customers to maintain or even upgrade their account status through product giveaways. Spotify took the on-demand music streaming industry by storm and remains one of the number-one portals for listening to tunes new and old. A couple of years ago, Spotify opted to reward its ‘Premium’ account holders with free Google Home Mini devices. This became something of a consumer phenomenon as users scrambled to sign up for their Google Home Mini. The clever tactic was that most consumers were signing up or upgrading their Spotify accounts for the Home Mini, with the likelihood of not downgrading their accounts afterward.
The iGaming industry is one of the fastest-growing subsectors in the online entertainment space. It’s already one of the most crowded and competitive niches in the entertainment sphere too. That’s why leading iGaming operators take a two-pronged approach to build their respective customer bases. First and foremost, they attract first-time customers with sign-up promotions that include no-deposit deals that are considered the best casino bonuses for risk-averse customers. Furthermore, they look to keep their customers active through the medium term by launching ‘reload offers’ once the initial bonuses are completed. These reload promotions commit further bonus funds to those prepared to reload their accounts with more funds.
What do the above entertainment businesses have in common? They focus on how to add value and improve the wider experience of their brand for customers. Whether it’s bundling tailored packages that deliver the right blend of TV entertainment; rewarding customer loyalty through product giveaways; retention offers that give brands longer time to delight their customers or reload promotions that give customers financial rewards for their ongoing loyalty; flexibility and customisation, will always be key for entertainment brands to stay relevant in this ever-changing landscape.