Why do you care about Walt Disney entering the subscription video on-demand streaming business with their new product Disney+?
Last week Disney+ launched around the world to massive fanfare. Despite some initial technical issues, their competitive prices and excellent catalogue have attracted huge interest. The Star Wars spin-off The Mandalorian alone has proven a massive draw card.
In the week following the Disney+ launch, Netflix app downloads grow 4% year-over-year. It’s early days but it seems there is still a lot of appetite out there for streaming content.
But what happens when consumers hit the wall? What happens when they check their bank balance and start to feel the hit from signing up to more and more subscription services?
Not only do they have to worry about multiple video on-demand services. Here in Australia it’s not unimaginable for someone to subscribe to Netflix, Stan, Disney+ and Kayo Sports. But you’ve now got more and more software moving to a software-as-a-service model (Office 365, Google Plus), common household products (Dollar Shave Club for razor blades, Three Thousand Thieves for coffee), even grocery shopping is moving towards subscription services.
In February 2018 McKinsey & Company found that subscription-based e-commerce had grown by more than 100% a year over the past five years. Surely that is only increasing.
There is a real risk of increased churn and decreasing customer loyalty as more and more purchases are made through subscription services. As the monthly subscription bill rises, consumers are likely to be more ruthless with cutting services that don’t meet their needs.
How is your organisation staying at the top of the subscription ladder?
Smart organisations are increasingly investing in retention or customer loyalty models – a predictive statistical model that takes your data points as inputs and gives every single one of your customers a score that indicates how likely they are to go elsewhere. You can even make a predictive model more powerful by integrating free and commercial external data sources.
Are you harnessing the power of the data you already have about your subscribers and customers? In an increasingly competitive subscription-based market, you can’t afford to not invest in using data to retain your customers.