There is little doubt that the next big challenge for the media industry is to create an experience that will generate more revenue from existing customers. While most people are well aware of the benefits of a customer-centric approach to selling and purchasing, not everyone has wised-up to the fact that personalisation is now key to increasing revenue; it is no longer a ‘one size fits all’ approach when it comes to customer engagement.
To achieve personalisation, marketers must look at their own business models and ask themselves if they meet the needs of the modern consumer: Consumers who access content through multiple devices; consumers who expect to be able to buy directly from a organisation; and consumers who come to the transaction table empowered with a justified sense of personal entitlement based on choice, value and convenience.
Challenging the establishment
Some of the bigger players are taking this approach; shifting their business models from driving new subscribers, to cross-selling products, engaging more directly with existing customers and delivering personalised offers and content which customers can’t refuse.
If you are unconvinced that a one-stop-shop strategy fits the bill of a media organisation ask the concept tsars – the supermarkets. In 2011, both Tesco and Sainsbury’s purchased controlling stakes in digital media companies, Blinkbox and Global Media Vault, respectively. This would suggest digital media content is the next set of consumer goods to become an accepted supermarket offering, and one that customers are likely to add to their virtual basket along with their consumer electronics, clothing and DIY purchases.
Building your empire
Compared to retail, the media industry is still in its infancy and from a commerce standpoint, it can learn and adapt to how multichannel retailers go about connecting with customers. Retailers have to be customer-focused to survive in the current economic climate, driving compelling customer propositions that make them want to buy again and again from one source. In other words, they create brand loyalty.
But how can media companies achieve brand loyalty if they are engaging with their customers across multiple channels – often with little integration or communication between these channels – and lack the ability to understand that their customers really want?
A textbook example would be IBM’s work with Cengage Learning Inc. Its mission was to become the most innovative source of teaching, learning and research solutions worldwide. Book publishing is the last of the major media types to be affected by the explosion in digital content and its e-business platform was not prepared for the demands the ‘connected customer’ would place on the company and the way it interacted and sold to its customers.
For Cengage’s customer base, digital content presented a major breakthrough in customer experience. Cengage quickly established that it needed to enable a new selling model: the ability to serve consumers through multiple sales channels, consumption models and delivery formats to meet both its multiple B2B and B2C lines of business.
Today, Cengage prices its rentals based on rental length, monitors its rental time period, and manages renewals and returns online. Cengage’s customers purchase traditional and digital books across multiple channels and can create personalised learning packages that best meet their needs, including individual book chapters. Subscription transactions like these are gathering pace across multiple sectors to suit customer preferences.
You will find that today’s leading video game companies have been able to increase revenues from subscriptions by understanding the end-customer through analysing social media and sales data. They are now creating an opulent consumer experience around their triple A titles, before initialising a new way to market through periodic downloadable game content.
New rules of engagement
For the new breed of customer, where they dictate the rules of engagement, it is vital to understand their behavioural habits and desires. Customer behaviour is a discipline currently ruled by retail, but should be embraced as a free market creature where customer experience is the new currency.
Just like these gaming companies, media companies need to have a deep insight into the buying behaviour of their connected customers. Then, by transforming this insight into intelligent marketing and selling decisions, they can drive greater personalisation and a differentiated customer experience.
Many media companies may be wondering how they can achieve this insight, but all of the information that they need is right at their fingertips. Customers now live in a recommendation realm where they openly share their thoughts, opinions, likes and dislikes online, particularly through Twitter, Facebook and other social platforms such as blogs and forums. The goal for media companies is to gain visibility and clarity of this fragmented – but undeniably rich – source of market and personal data.
While most media companies have basic ecommerce and social platforms in place, they currently have little ability to analyse this information and thus integrate it into their selling and marketing strategy. Without the ability to use the information from those channels, these companies cannot extend their commerce activity out into the ecospheres customers create for themselves online.
Delivering personalised content through ecommerce precision marketing, and integrating that with social networks; media companies can develop better customer experiences, drive promotions and personalisation benefits direct to the customer that will create the required ‘draw’ to ensure they return.
The challenge ahead for these media companies is to implement a flexible commerce solution that ensures customers can choose their preferred delivery model and control the experience of how they receive and consume content across channels.
John Konczal is worldwide industry directorof communications, media & retail, Smarter Commerce, IBM
