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Curbing churn with personalisation

Patrick Byrden, Senior Director Customer Solutions EMEA , TiVo
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Reducing subscriber churn is one of the biggest challenges that Pay TV providers need to solve in this age of media fragmentation. As customers look to a wealth of alternative platforms to get their content, service providers are scrambling to figure out how to combat consumer behaviour changes and retain subscribed customers as best they can.

The importance of churn rates

Identifying current and potential audiences is more important than ever before and, while great content is crucial in attracting and retaining them, it’s insufficient on its own. Video content must merge with technology to produce an exceptional user experience in order to effectively reduce churn rates. With this strategy, service providers and marketers can attract audiences with personalised content at the right times, as well as help keep potential cord-cutters on their platforms.

The best predictors of churn are viewership and engagement (see diagram below)

The best churn predictors

A combined understanding of the amount of content that is being consumed by subscribers, along with the level of interaction they have with a provider’s platform, will provide a fairly obvious indication of whether or not they are deriving value from their package. As a result, providers need to use insights and analytics to evaluate TV consumption and make viewing as personal and engaging as possible. While relevant content is crucial to engage viewers of any age, it’s also important to take the way they find that content into account. One of the key ways to help make sure customers do not churn, is to ensure TV personalisation.

Personalisation is key

A recent study we conducted analysed the activity of three video service providers — two based in EMEA and one based in the U.S. — over six months. It found that, when viewers selected video content presented by personalised recommendations (e.g. via dynamic carousels and other responsive discovery solutions), users churned three times less compared to those who found content by traditional means. These results show why it is so vital that service provides give customers access to personalisation solutions.

The personalisation approach is especially important for customers in Generation Z. This demographic is connected for more than ten hours a day and will account for 40 per cent of consumer spending by 2020, so it’s critical to give these young viewers a personalised experience. That way, they can become long-term audience members instead of early churners.

High engagement and viewership

Increasing personalisation is not a silver bullet for reducing churn rates. As already mentioned, engagement and viewership round out the complete picture. When users have high engagement and high viewership, these factors work together to generate lower rates of churn.

As well as knowing what customers want in their personalised TV searches, analysing churn rates also gives service providers the ability to highlight ‘risk factors’, i.e. the behaviour to look for as an indication that a customer is about to churn. For example, users who spend an above average fraction of time watching on weekdays tend to be more likely to churn, compared to those who spend an above average fraction of time watching during the weekend.

Thus, if a user exhibits high-risk behaviour such as unexpectedly high weekday watching, this information could be leveraged to encourage weekend viewing through, for example, specialised recommendations or free offerings for a Saturday or Sunday. This strategy could help providers retain multiple customers, especially as about half of TV watchers “co-view” content with friends and family.

Retaining new subscribers

Reducing churn rates of already loyal customers is great, but how can service providers plan to retain new subscribers as soon as they sign up? With all the ‘free trial’ opportunities available today, providers need a strategy for converting customers that only planned on being there a short while. When looking at new subscribers within a 30-day period, we discovered that viewers who engaged with personalisation tools afforded service providers up to a 140 per cent increase in user retention.

Ultimately, service providers need to be smart about attracting and retaining subscribers, and one of the most effective ways to get actionable insights that help keep viewers watching is through churn analysis. Personalisation is key to improving viewership and engagement, therefore aiding in reducing overall churn. This crucial touchpoint helps providers engage audiences, reduce cord-cutting and operate more efficiently.

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