Media Companies Grab Customer Attention by Focusing on Experience
The traditional business models of media and entertainment companies have been increasingly eroded over the last few years. The video-on-demand era has been marked by the gradual decline in live linear TV viewing, and with that the guaranteed distribution and substantial revenue that most networks benefited from has come under threat. To acquire, engage, and create a loyal customer base, media and entertainment companies are having to invest in and architect intuitive, personalized, and integrated viewer experiences.
New research from Forrester shows that in media and entertainment there is a direct correlation between customer experience and revenue performance, most notably across digital channels.
Forrester used a scoring framework to identify companies that lead the media industry in employing best practices in people, process, and technology. Through this process, they found that 34 percent of media and entertainment firms qualified as experience-driven businesses (EDBs) — a smaller percentage than in many other industries such as online retail, financial services, and travel. This is not a surprising statistic — for decades the business model for broadcasters around linear TV remained largely unchanged with the consumer relationship being much farther down the distribution chain. But as we have seen, rapid changes in technology and user behavior have created a gap between how consumers want to experience and pay for TV, and how media companies produce, distribute, and create experiences around their content.
The Forrester research shows that media companies who are making this transformation are unquestionably seeing the results from their focus on customer experience. Forrester found that media and entertainment companies that are investing in experience transformation across both technology and organizational disciplines — through people and process — are delivering increased performance on metrics that align to their revenue growth, customer retention, customer acquisition in new markets, and increased revenue per user.
The numbers tell a compelling story:
- Media and entertainment firms that are defined as experience-driven businesses by Forrester are 1.3x more likely than others in their industry to cite increased customer lifetime value as a result of experience investments.
- They also grow at an average of 11 percent in revenue and 5.9 percent in cross-sell/upsell year-over-year. In an industry with rapidly evolving business models, this is significant.
- Competitive differentiation is key in today’s crowded content landscape. EDBs in media and entertainment boast 3x year-over-year growth in repeat visitor rates compared to others.
- They are building customer advocates. Firms who are concentrating on experiences were 1.5x more likely to significantly exceed customer experience expectations.
Privacy is top of mind — and should be
The Forrester research also indicates that in the current climate of GDPR and data security experience-driven media and entertainment businesses are mindful of overstepping the bounds of consumer privacy. The top challenge they face in optimizing experiences is the constraint of data governance, privacy, and security (49 percent versus just 27 percent of other firms).
It doesn’t surprise me that the more evolved a broadcaster is in regard to customer experience, then the more focus and diligence they bring to this area. I suggest media firms specifically should make trust and privacy a point of competitive differentiation. It’s difficult to stand-out in today’s crowded content market. Those who embrace authenticity and transparency around user identity, data privacy, and consent will build long-standing loyalty.
We’ve seen this trend at work with our customers. If you’re interested in learning more, take a look at “Modern Authenticity” and hear directly from industry experts on the future of trust in media and entertainment.
How they’re doing it
For those media companies that have not yet embraced an experience-driven content strategy, it is interesting to see how industry peers are achieving their results. Forrester found that experience-driven media and entertainment firms are adopting a three-pronged approach to customer experience investment. Seventy-one percent of EDBs have a specific budget for mobile experience design improvement, versus just 42 percent of other firms. It’s not enough for successful firms to just be on mobile, they are investing in customer experience optimization through mobile-first design.
They are also investing in cross-channel experience design (57 percent versus 39 percent) and customer feedback management (63 percent versus 42 percent). Again we see successful companies looking at customer journeys holistically and making sure systems are there to actually listen to customers and further refine and iterate their content experiences.
Forrester’s findings are no surprise to us. The leaders we work with are showing the industry what’s possible when a company focuses on customer experience and makes the right investments in people, process, and technology.
Learn more about how media and entertainment companies are personalizing experiences here. Download The Business Impact of Investing in Experience, dive into the findings, or see the results at a glance.