Reduce CAC with Reconnect Campaigns
In this competitive landscape, acquiring customers can be an expensive proposition. In addition to licensing or creating content, paying for exclusivity, and operational costs required to run a video service, focusing too much on the costs for ad-spends, PPC, social campaigns, etc., for customer acquisition, will likely negatively impact your business in the long run. It costs more money to find a new customer then it does to keep the ones you have. Acquiring and engaging the right customers, keeping them long-term, and winning back former, happy customers is a great way to minimize acquisition costs.
Balancing Customer Acquisition Costs & Lifetime Value
A healthy lifetime value (CLV) for your subscribers is a great measurement for the success of your subscription business. But if your customer acquisition costs (CAC) are too high, the CAC/CLV ratio (Fig. 1) is likely too low and the business model will not be sustainable. Conversely, if the ratio is too high, you may not be spending enough to acquire these high-value subscribers and leaving an open opportunity for your competition or leaving subscription dollars on the table. A ratio of around 3:1 would be a healthy ratio to shoot for.
Subscriber Ebb & Flow
The sad reality of any subscription business is that customers will eventually leave. Either through a customer request (voluntary churn) or through failed billing (involuntary churn). Not to fret! This doesn’t have to be the end of your relationship. If you understand the reasons customers leave your video service, you will be better positioned to bring them back. In many instances, lost customers are more likely to rejoin the service and are a MUCH cheaper acquisition target.
The point here is, there are different reasons customers leave and understanding those motivations, through data, will help you build an effective win back strategy.
There are many tactics and reasons to target lost customers and re-engage them with your service. When a new season starts or a similar show becomes available, you have the ability to directly target customers that are fans of that show. If they left because they had trouble finding content or had service issues you can re-target them when those issues have been addressed. Sometimes happy customers leave the service and they are a prime target to rejoin down the road. The point here is, there are different reasons customers leave and understanding those motivations, through data, will help you build an effective win-back strategy.
Reconnect Campaigns to Former Subscribers
The following scenarios demonstrate opportunities for outreach to former subscribers and the potential to entice them to reconnect.
New Content Based on Past Viewing
When you license new content for your video service; a new season, a new series, or a new movie, chances are there are some former, happy customers who would appreciate this new content. How do we know they were happy before they churned out? The Customer Happiness Index (CHI) of course! Using artificial intelligence, every subscriber is given a CHI score after a long enough tenure in the video service. The CHI score is a machine learning model aggregated across four weighted categories that track dozens of features. Every subscriber’s CHI score is captured and sustained upon their departure from the service.
In the Wicket Scorecard, you can distinguish real fans of a series from those subscribers that just sampled a show in the Content Explorer. (Fig. 2) Targeting a specific show and exporting a list of lost customers with a high CHI score can yield a group that would benefit from seeing the new season, series, or movie. You can then refine this list down to just Fans to really refine the list to the people you desire to reach.
Likewise, if you have licensed exclusive content to your service, a more timely message may be needed to say your video service has exclusive rights to the new season of a series. Before the premiere of the new season is a great time to reach out to these former subscribers to let them know they should come back for the latest season with limited availability through your service and even catch up on the previous season to get back up to speed on all of the plotlines.
New App-based on Device/Score
Sometimes subscribers leave because of bad user experiences. Overall, if they were satisfied with the service but their primary viewing app had issues, the release of an updated or new app may be enough to bring them back into the fold. This could be a great scenario to reach out to these former subscribers to let them know you listened to their feedback and would like them to try out the new app.
Price Change Awareness/Offers
Price-consciousness is a big motivator for many individual’s decisions on which services they’ll retain or buy into. Target people with lower price or price change win back campaigns and filter by tenure in the service, healthy lifetime value, and maintained a high CHI score. Let them know they’ll get more value for their hard-earned dollar and should give the service another chance.
Targeted campaigns based on high CHI
This is a simple scenario. Export a list of Lost Customers that had high CHI score and maintained a long enough tenure in your service so you know they are not just a “binge & churn” user. If there is no particular reason why they churned but they had a high CHI score, entice them to come back with an offer too good to refuse.
These win back strategies can be easily employed with the Wicket Scorecard through the Subscriber Export feature. Once you have successfully identified your target audience, you can export those customers, then simply upload the list into your existing marketing platform or select one of our direct integrations to send the data to HubSpot or Segment. These targeted offers are a great way to increase subscription counts without increasing customer acquisition costs.
If you would like to learn more about how to run win back, acquisition, conversion, engagement, or save campaigns utilizing the Wicket Scorecard, let us know. We would love to demonstrate how Subscriber Export can make your marketing efforts more effective and efficient, thus reducing your overall acquisition costs.
Tags: acquisition • audience lifetime value • CAC • CLV • Customer happiness • Subscriber export • use case