OTT subscription churn continues to be a top area of focus for service providers. Considering how much marketing goes into engaging with and acquiring new customers, losing customers at an elevated rate can be detrimental to your long-term success.
Keeping customers you have already converted is significantly cheaper than acquiring new ones. According to thinkJar, a customer strategy consulting organization, “It is 6-7X more expensive for companies to attract new customers than to keep existing customers.” This is why most successful OTT services will grow their subscription numbers by finding the most cost-effective acquisition channels while balancing their resources to retain the customers they already have.
It is 6-7X more expensive for companies to attract new customers than to keep existing customers.
In this article, we present some tips for maintaining a low OTT churn rate in order to maximize your profits and break free from the statistics.
Set Reasonable Subscription Fees
Free trials can be an attractive way to entice people to experience your service, but many people choose to end their trial before converting to a paying subscriber. This may be because:
- They only signed up to watch a specific piece of content
- The subscription fees are too high when compared to other OTT services in your niche
- They were unable to find a breadth of content they were looking for
Typically pricing is presented upfront and users have already decided whether to purchase before signing up for a trial. Make sure you have established an attractive value proposition to keep trialists using the service: exclusive content windows, a better experience, exclusive community, etc.
Zuora has worked with hundreds of subscription-based businesses to determine pricing models and advise a flexible process to evolve subscription pricing through testing along with your business model. They’ve written a thorough article, The Subscription Pricing Journey, to guide a subscription-based business on how to determine pricing.
Keep Your Content Fresh
It’s a no-brainer. While customers may initially enjoy what you have to offer, if users cannot find fresh content, they’ll get bored. According to a nScreenMedia study focused specifically on online video services titled Keep My Customer, “plenty of content” and “not enough content” were the top reasons for keeping a service and for cancellations, respectively.
Content doesn’t always have to be new to be fresh, it just needs to be new and fresh to the intended user.
BUT, the content doesn’t always have to be new to be fresh, it just needs to be new and fresh to the intended user. An interesting way of showing fresh content to users of an OTT video service is by using the Attention Index to surface hidden gems a user may find attractive. Imagine you have an exclusive window for a new series that users have signed up to your video service to watch. Once they have viewed all the episodes of that series, the Attention Index can be leveraged (even further with Content Explorer) to pinpoint similar content those users may not have realized was available. By keeping things fresh and interesting, your customers will look forward to logging on and discovering new things that you have to offer.
Reduce Involuntary Churn
Involuntary churn is a considerable portion of the overall churn equation for SVoD services. It’s also the most preventable. These are customers who leave through programmatic cancellations such as failed payment methods or natural expirations that are passively not renewed.
With soft declined card transactions, develop a retry mechanism that waits for a given period of time and then attempts to reprocess the credit card without engaging the customer. With hard declines, employing a good dunning process and using a credit card updater service is an effective way to reduce and combat failed payment methods. Offer an automatic renewal feature so it’s convenient for your customers to continue their subscriptions without having to take action.
Reawaken Interest in Inactive Subscribers
Whether they’re becoming disinterested with your services, or they’ve forgotten about their subscription, some customers may be inactive or stalled. So how do you get them to reinvest their time and interest in your services?
Develop a methodology for re-engaging these users. It’s not enough to reach out to them without a process. Too soon or often and your notifications could be seen as a nuisance. Too late and it could actually increase churn by reminding them they are paying for a service they’re not using. It takes a little effort but employing this methodology can find an optimal window for outreach.
In your outreach, let them know when the content they have been a fan of in the past is back or coming soon. Or, similarly to what was mentioned earlier in keeping your content fresh, let them know about other shows which similar users have enjoyed that fit their taste profile.
Other Things to Consider
Offer Personalized Recommendations
Trying to use a one-size-fits-all strategy often falls flat or may even backfire. While personalizing your services can take a little extra work, it’ll pay off in the end.
Focus on the goal of getting people to the next piece of interesting content. You can accomplish this by:
- Promoting content they will like based on their past viewing habits
- Using the Attention Index to find “hidden gems” in your catalog that users greatly enjoy, even though the content isn’t highly marketed
Doing this enables you to find highly correlated content that people enjoy and recommend it to other users.
Get Recently Canceled Subscribers to Come Back
Again, it’s more time and cost-efficient to focus on existing customers rather than new ones. One particular group you should focus on is those who have recently canceled their subscription.
Users who have left a subscription video service (particularly involuntarily) and then take action to come back, are more likely to stay in the service long-term.
Through our analysis, we have found that users who have left a subscription video service (particularly involuntarily) and then take action to come back, are more likely to stay in the service long-term.
Put some marketing budget into targeted emails to this group. You could let them know you have a special discount waiting for them, and ask them to speak up about why they canceled with you. This strategy works effectively in two ways:
- They’ll feel like you value them as a customer, and this may be enough to draw them back in
- You’ll get valuable insight into how you can improve your services, and these customers will get a platform where their voices are heard
Use These Tips for a Low Churn Rate
Your OTT service may not be as big as some of the others yet, but you can certainly take a few pages from their playbook. By using these tips for a low churn rate, you can ensure that you retain your current customers and keep them happy. With time, hopefully, you’ll see retention rates that rival even the best in the industry!
If you’re interested in maximizing your Audience’s Lifetime Value, then get in touch with us today to get a demo of the Wicket Scorecard.
Download the Whitepaper
You know that churn is a potential hurdle for your service. Click the button below to download the Understand & Combat Subscription Churn Whitepaper to see how the Wicket Scorecard can help you recognize and reduce churn in your video business and begin to maximize audience lifetime value.
Tags: churn • content engagement • customer experience • lifetime value • OTT • subscriptions