57 Channels (And Nothin’ On)

tv

OK, I took the title from a Springsteen song. The point is that I’ve recently read an insightful piece on the cable and entertainment industries in Business Week about the need to keep large bundles of channels with many useless options. Although I agree with the conclusion there, I do feel that there is space for some further channel unbundling, rather than one-size-fits-all models. Cable companies can use these smaller sized bundles in many ways to increase customers’ life-time revenues and satisfaction. Here are a couple of ways how this could be achieved:

  1. Explore premium segments. With smaller sized bundles, there can be an easy model of try-and-buy special packages, with smart promotions on top, allowing customers to discover content that they are likely to watch and pay for (as does Amazon or Spotify).
  2. Up-sell customers through their life-cycle. Customers behave differently through their life-cycle. It is this understanding, connected with micro-segmentation, that enables companies to increase customers’ revenues by selling them what they didn’t know they needed just by being in the right channel in the right time.
  3. Avoid customers leaving to the competition. Although the practice of special offers to retain customers can be sometimes destructive, when done based on micro-segmentation and a structured over-arching life-cycle management, it can be a powerful tool to avoid customers leaving to the competition. Most channel offers are not exclusive between cable providers, so the art of packaging channels can be a competitive advantage when it comes to increasing customers’ satisfaction and retaining them.

With a strong backbone of customer insights, good campaign management practices and a tight control on communication, smaller packages can yield significant revenue returns. When working smoothly, and with the right bundles, these customer value/experience management practices lead to higher brand affinity, customer advocacy and, eventually, even new customers.

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