The Christmas and Holiday season in 2020 is demonstrating some shifts in consumer gifting patterns. Shoppers are spending earlier and seeking alternatives to traditional gifts as supply and delivery are a concern. Meanwhile, subscriptions are now available a wide variety of digital and physical products and services, from beer deliveries to mystery boxes of movie memorabilia, and consumers in 2020 consider them seriously as long-lasting and meaningful gifts.
Digital gifts are also a great alternative to physical goods; there are no spending limits, no queues to purchase, and no risk of late delivery meaning presents are missed.
Media and OTT service providers with customer-centric acquisition strategies are best positioned to serve this demand, fueled by the digital transition onset by the Coronavirus pandemic, and are responding to the change in customer habits in new ways.
Changes in Free Trials
With more and more people learning how to ‘game’ free trials to avoid paid subscriptions, publishers and OTT providers alike need to adapt and think of new ways to build trust and encourage signup. Netflix and Disney + have both stopped their free trials in most territories. Free trials are available, they’re becoming shorter, with 7 or 14 days becoming more common.
Moving the free initial period out to the second month of a subscription is growing in popularity. The customer is rewarded for signing up for their first month, with a free subsequent month, and the service provider gains a month of revenue from the customer as well as valuable time to initiate their retention strategy.
Some publishers and OTT services, like Netflix, have chosen to remove free trials altogether, preferring to experiment with content metering and more dynamic approaches enabled by tools like Zephr, which present users with relevant, focused offers based on an array of behavioral and contextual triggers. A personalized experience will encourage signup far better than ‘off the shelf’ incentives.
Examples of Apple TV+ offer diversity (source: Apple TV+, Dec 2020)
Tailored Packages and Pricing (bundles, physical goods and digital content etc)
With the trial or offer stage complete, the next is to prove value to the customer. Traditionally, this would have been through flagship content (top stories, original movies) – the content that the service wanted customers to see. This rigid format means that customers who don’t immediately see the value in a product through relevant content may choose not to become subscribers.
Optimizing the price for each customer is an important factor, and the ‘right’ price is based primarily on your customers and competitors. Flexible pricing offers and strategies can also help; for example, by providing tailored discounts for specific packages, or using elastic pricing to find a price point that is likely to win over the customer based on their content consumption habits.
Tailoring the packages themselves is also a great way to serve the right content to the right customers. There are already examples of customers being able to do this themselves (such as NOW TV Passes), but adopting learning algorithms and technology enables media organizations to go a step further. By gathering data on customer engagement habits it is possible to build a profile, and use that data to intelligently recommend content packages suited to customer interests.
This model can also be applied to gifts. A customer could opt to buy an annual content pass and preselect interests on behalf of the gift recipient. Understand this data and provide customized content in advance, and that customers’ perception of the brand is positive from the first time they log in.
MyProtein allow customers to build a bundle and receive a discount at the end (Source: MyProtein, Dec 2020)
As viewing and reading habits change and develop, customers expect a ‘cross platform’ and omnichannel experience to view content on mobile and tablet, desktop, as well as print content where applicable. Bundle subscriptions that include physical and digital subscriptions are a popular way to serve this demand, as well as bundled premium video and web content access. Sports brands can also benefit by bundling live sports passes and merchandise with exclusive digital content.
Ultimately, shifting the focus of a digital strategy from content-first to consumer-first is key to driving acquisition.
Affinity Bundles & Products
Consider going beyond your own products and services and working in partnership with other brands. Some common examples of affinity bundles includes
O2 Offering 12 Months of Disney+ with their products (Source: O2, Dec 2020)
An alternative to an affinity promotion is complementary products, such as hardware or additional ‘free gifts’. While not a new concept, using customer data to analyze the sorts of products that your visitors and subscribers are interested in and focusing on delivering valuable products in those areas is better than a generic offer with less perceived value. Other examples include providing access to complimentary content when using a product or service.
A common, and effective, strategy with longer-term bundles is to offer an affinity discount or product in return for locking customers in for a longer period. The additional advantage with this method at this time of year is the recipient is getting more present under the tree!
Traditionally, the most common subscription period has been Monthly; in this model, a gift recipient will receive a month of free access before they’ll be expected to pay for their own gift – or, the purchaser will be obliged to pay for the gift on a monthly basis, and if that payment fails, so does the gift they purchased!
Instead, consider moving the focus from monthly to annual subscriptions with monthly discounts to increase LTV and reduce churn. An annual subscription only needs a single payment, lowering concerns around failed renewals. Moving away from monthly charges to an annual billing model, or a monthly subscription paid annually (which can also provide the customer with the security of a ‘cancel anytime’ option for a pro-rata refund or credit) supports retention, offers the option of discounts for the customer, and peace of mind from a technical perspective.
The Toronto Star highlights the Annual as the best value long-term over Monthly (Source: TorStar dec 2020)
L’Equipe offers a similar solution in bundles (Source: L’Equipe, Dec 2020)
Prepaid Gift Cards are Still Relevant
Even with predictive algorithms and bundle customization, there will always be those who simply aren’t sure what to buy for someone. Prepaid cards, loaded with service credits, are a handy backup purchase, which can be used to buy subscriptions or products. These are simple to implement and configure with the right campaign management solution and make for great gifts. Using a centralized solution for customer identity, payment, billing, and product catalog, gift vouchers can be applied across an entire brand portfolio, rather than just content. For example, Amazon gift cards work across the whole site and many different products.
Drive your Gift Subscriptions with MPP Global’s Subscription Management:
- A consolidated customer identity, billing, and portfolio management solution – Whether you’re providing a single product, or multiple products across a wide variety of media, Subscription Management offers a single solution to manage customers, subscriptions, products and offers, saving your organization time, money, and effort compared to complicated multi-platform solutions.
- Create flexible bundles with products from across the catalog – Subscription Management provides the flexibility to package multiple, omni-channel products into bundles. Customers can purchase multiple subscriptions in a single order, mix digital and physical products, and even provide discounts on those bundles at the checkout.
- Fully configurable gifting flows – The ability to configure gift subscriptions and purchases is also crucial at this time of year, and Subscription Management’s gifting functionality enables clients to configure gift checkout flows so that customers can purchase gifts and send to recipients, right from your own UI.
- A comprehensive suite of offer management tools – Subscription Management’s powerful acquisition and retention modules provide some of the most configurable offer and campaign management tools in the industry. Customizable free trials, discount codes, controlled free access, and stepped pricing are all possible, giving you maximum flexibility to implement your offers and discounts strategy. Gifts can also be redeemed by the purchaser, for ‘self gifting’ or taking advantage of sales while purchasing for others.
- An Inclusive Data Solution – Data management to maximize the value of these tools is key, and Subscription Management provides unlimited data capture options which can feed right into your reports. Alongside the extensive level of default data points, custom parameters can be passed via API and stored against customer accounts. Subscription Management’s open data lake framework not only collects all raw subscription and customer data for direct use in the solution, but this data can also be added into the wider data lake, and combined with other technologies and solutions to provide powerful insight and visualization.
- Intelligent content metering solutions – Make your content delivery intelligent, through smart algorithms and metered content controls. Subscription Management supports built in content metering for registration walls, and also integrates with a variety of content management tools (e.g. Zephr) to give even more content and product personalization based on user habits.
Want to learn more?
MPP Global have recently produced a full acquisition playbook, new for 2020 and packed full of valuable acquisition strategies and tips. Gifting strategies are covered in great detail, along with longer-term acquisition strategies. These playbooks have been written for both the OTT sector, and the Publishing sector; with industry-specific data as well as universally applicable concepts. Grab a copy today!
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