Research: packages stimulating customer acquisition and retention

Parks Associates has published a new white paper in collaboration with Bango Effective cross-selling: issues and expectations of subscription leadersfeaturing custom primary research conducted among industry leaders in the video streaming, music, education and productivity markets to assess the effectiveness of cross-selling strategies.

In this study, leading executives share their best practices and strategies for maximizing returns from their partnerships and avoiding and mitigating pain points.

The research white paper is based on the results of 10 interviews with executives representing leading subscription companies in key services markets. Parks Associates consumer research shows that entertainment services are leading the subscription economy in American Internet households:

• 89 percent have a video streaming service

• 32 percent subscribe to an audio streaming service

• 20 percent subscribe to a gaming service

• 16 percent have a gym membership

“Partnerships are increasingly driving company acquisitions and retention,” said Kristen Hanich, research director at Parks Associates. “Partnerships increase brand awareness and market reach, reduce customer churn and eliminate friction in the user registration process, and increase overall customer satisfaction.”

“In a short period of time, subscription bundling has gone from being just a distribution tactic to a fundamental driver of consumer engagement,” added Giles Tongue, vice president of marketing at Bango. “Subscription leaders around the world realize the importance of connecting services at scale. It goes beyond acquisitions to deliver greater consumer satisfaction, longer longevity and more profitable relationships. Bango’s technology helps many of these leaders reap the benefits of super cross-selling by building mutually successful partnerships with telecommunications companies and other cross-selling partners.

Executives say service bundling and partnerships offer their partners numerous benefits: increasing customer satisfaction as measured by net promoter score (NPS), reducing churn, and enabling companies to differentiate their service offerings. Additionally, the white paper highlighted research that showed a 22-point increase in home ISP NPS due to bundling video streaming subscriptions with home Internet service. A customer’s NPS is highly correlated with the number of bundled services they receive from their ISPs – a customer who receives six or more additional services from their ISP earns an average NPS of 55.

Top managers believe that all kinds of tied partnerships can be attractive. However, telecommunications operators – including both home internet providers and mobile operators – are described as natural content fits for many types of services and offers, offering wide reach, already established recurring billing relationships, large marketing budgets and consumer trust.

“Successful partnerships also do not have to be one-off deals – investing in long-term integrations, especially with telecommunications companies, can pay off,” concluded Hanich.