We have all heard that it’s cheaper to KEEP a customer than to WIN THEM BACK. Studies estimate it can cost between 5 to 20 times more, depending on the industry. That’s why “Loyalty” has always been a goal that companies have strived for. Over the years, consumers have collected everything from stamps to spoons, cereal box tops to airline miles, so it strikes me as odd that the streaming world hasn’t embraced this idea of cultivating “loyalty”.

What we’ve seen thus far are deeply discounted “acquisition” plays, which are short lived, and costly. Back when I was working for a leading satellite pay TV provider it took 3 years to begin making any profit from consumers. After you factored in the deep monthly discount offered for the first year, the cost of the equipment (satellite dishes and receivers) PLUS what we called the “truck roll” which was basically the personnel needed to install the equipment, it was an expensive proposition. Of course, back in those days there was a penalty for cancelling prior to your contract expired (which was normally 3 years)

Today there is no equipment, no truck rolls and no contracts. You sign up, binge your favorite show, watch the playoff game or European soccer tournament and then cancel. Easy-peasy (is that still something people say?) Therein lies the challenge for streamers. We’ve created a system that is effortless for the consumer to participate in but just as effortless to opt out of.

Remembering the 80/20 rule of business (80% of your business comes from 20% of your customer base) and ALL of the data that we have on our viewers, we should be creating programs that meet their needs BEYOND content on these platforms.

Traditional retention programs fall into three basic categories:

1. Points Based: Continued patronage that is tracked and allows consumers to redeem something of value in the future.
2. Value-based: Donating a percentage of the purchase to a charity program in order to connect with the consumer on a deeper level.
3. Paid Loyalty Programs: Where you charge a fee to become a “Member” and afford the consumer ongoing, exclusive benefits.

Each of these categories has gone digital over the past decade, no more punch cards but mobile apps that accumulate points, store coupons have gone the way of the dodo, and virtual wallets have made it super easy to spend our money. How can we turn this great technology AND data into something more revolutionary for the streaming consumer. As we begin to crack down on password sharing (we are guilty of that in my household for sure) and as Evan Shapīro has noted, subscription fatigue is fast becoming a BIG problem, we need a disruptor.

While I don’t have the answer, I’d like to throw out a few guidelines to use as the industry collectively grapples with this:

 1. Create a continuing conversation with your subscribers. See what they really value. Not a once a year custom service survey but a dialogue to understand their life stage in addition to their lifestyle. This is basic marketing 101, understand your target audience and what keeps them up at night, but we seem to forget the importance of this once we sign them on as a subscriber.

2. Take off your content blinders. While content may be king we seem to have lost all exclusivity of distribution in the streaming world. That's why it's important to look beyond your own portfolio to keep your subscribers happy. What companies can you partner with to create a more exclusive experience? Find partners that align with seasons (spring gardening, summer BBQ's), cultural moments (Super Bowl or Oscar viewing parties) or holidays (Flowers for Valentines Day, catering for Thanksgiving) to create a partnership with mutual benefits and provide tangible value to the subscriber.

3. Create a dedicated a team to this important task. All too often tackling churn becomes and add-on to the acquisition team's responsibilities when the truth is it's a VERY different skill set. If we as an industry truly want to address this constant turnover of subscribers we need to have a team who is solely focused on it. That is where the true innovation will come from.



So the gauntlet has been thrown down, the Churn Challenge has begun. I look forward to seeing how this dynamic industry addresses it and perhaps the new saying will be "if you build it, they will stay"