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GETTING, HAVING, HOLDING.WHY CUSTOMER ENGAGEMENT NEEDS A NEW, DATA-DRIVEN, MULTIDISCIPLINARY APPROACH.
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Today’s digital consumers are spoiled for choice. They’ve never had as many options to access content – and those choices are only likely to keep expanding. Competing for consumers’ committed attention – and keeping them coming back for more – is becoming an increasingly tough challenge.
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A BIGGER PICTURE
Understanding what customer engagement really means for different video business models and, crucially, how it’s created, measured and monetized is far from straightforward. How much content an individual consumes is the main, high-level metric to assess engagement. But it only shows one component of what is, in fact, a multi-dimensional driver of value. Other, less obvious metrics, such as frequency of access, recency, and the detail of user journey interactions, can also help build an overall picture of loyalty and churn propensity. Social media sentiment’s a useful guide, too.
Overall, video businesses need to correlate user engagement and behavior on their products and services with the business value they’ll generate. It’s useful to think about engagement at 3 levels:
• Service: Looking at, for example, customer acquisition journeys and how consumers are helped when they have a problem.
• Product: How often customers come to use the product, how easy they find it to use, how easily they can find the content they want.
• Content: How successfully individual pieces of content are being merchandised, how compelling customers find the content proposition.
CONNECTING ENGAGEMENT WITH BUSINESS VALUE
Depending on the business model, improving engagement relies on different levers.
For SVOD organizations, pricing and packaging, product features (eg recommendations), above and below the line marketing and content mix would all play a specific role – and this would change over a customer lifespan.
Figure 1: Number of OTT video services in the U.S. (2013-2017)
Figure 2: Number of OTT video services subscriptions among all U.S. broadband households surveyed (2014-2018)
Q1/2014 Q2/2015 Q1/2016 Q3/2016 Q1/2017 Q1/2018
2 services
1 service
4+ services
3 services
0 services
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2013 2014 2015 2016 2017
Source: Parks Associates
Source: Parks Associates
-50
0
50
100
150
200
250
Closed
New
Existing
Over the past 5 years OTT services in the U.S. has grown from 80 to 200 services available
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Understanding different user types, and noting when their behaviour differs from the norm, is crucial – for example customers who join to binge on a particular box set and then quit the product. A retention strategy there may be different to – say – an irregular sports fan. If companies can understand how specific segments behave (and why they do), they can persuade audience segments to explore the product more widely – and stay longer.
For advertising models, the customer lifecycle is less relevant, but a frequently changing catalogue of compelling content is essential.
Engagement is important for communications providers, who can take advantage of high-engagement products like digital video, music and games to drive revenues in lower-touch products like broadband.
Some businesses will be seeking to own the digital interface with the consumer by providing them with direct access to a variety of digital media services from within their own product. So, for example, it’s important for a PayTV provider to understand the extent to which their customers are engaging with the exclusive content they want them to or with commodity, free-to-air content.
But regardless of which model is in play, the product is at the center. How consumers feel about and use it ultimately defines their engagement and hence the value they would deliver.
DISENGAGEMENT – PREDICTING CHURN
Churn is predictable. There’s almost always a correlation between a consumer’s propensity to churn and the number of times and the frequency of product views and/or accesses. Analysis of usage at a European telco (see figure 3), comparing consumers who churned against more loyal customers, suggests that there is a “churner” pattern which can be detected well in advance.
And early detection means that effective retention techniques can be applied in plenty of time - organizations can start to make the right interventions and make offers that would persuade users to stick with a product. They can decide what offer to make based on a quantitative view of the customer’s long-term value.
For example, one leading Asian Pay TV business chose to offer a one-off voucher discount to customers – coupled with a targeted content marketing play – when it spotted that mobile consumption had started to decline for a user. The combination of this sweetener with a reminder of the range of relevant content on offer, drove a significant reduction in churn.
Figure 3: Loyal customers logged in 10x more frequently and viewed an average of 10x more videos than churners in a monthly period
Avg # logins by customer type
Avg # views by customer type
Churner
Loyal customer
April 2018
18.85
3.75 3.41 2.28 1.23
21.1622.72
24.49
May 2018 June 2018
May 2018 June 2018
July 2018
April 2018 July 2018
25.98
3.75 3.47 2.29 1.02
30.1733.31
35.78
Churner
Loyal customer
Source: Accenture
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Regardless of which business model is in play, the product is at the center. How consumers feel about and use it ultimately determines their engagement.
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MEASURING ENGAGEMENT – IDENTIFYING AND DRIVING THE RIGHT KPIS
Every organisation is different. So each unique business would need to develop the details of the engagement measurement strategy that works for them. But all businesses will benefit from a framework that links business objectives, value drivers and the important KPIs.
Businesses can start by establishing a methodology that maps out the required inputs and data/business processes to move from raw data to creating the relevant KPIs. KPI decision trees, with corresponding calculations and algorithms, can generate the insights business operators require to take effective action.
CULTIVATING KPI VALUE TREES
Zeroing-in on a single KPI makes it possible to iterate and experiment. Businesses can test multiple actions and campaigns to try to move the dial, and assess their success. And businesses can continue measuring that KPI as they modify and refine actions to increase positive results.
Each business model hinges on specific value drivers, with advertising funded, subscription and Pay TV operators all looking for slightly different outcomes. But each business model can be analysed across some common dimensions: customer, content performance, service adoption, revenue and fees (see figure 4 for SVOD content performance value tree example).
From here, each remedial move can be investigated in the wider context of the business – with an Objectives & Key Results (OKR) methodology to make sure that KPI maximisation is not happening at a cost elsewhere in the organisation. For example, it’s possible to increase ‘dwell time’ by providing great, compelling content – a clear win. But the same metric could also rise if viewers find the user interface so complex and challenging that they get lost!
WHAT’S OBSCURING THE ENGAGEMENT PICTURE?
Having fragmented data and an organizational model that deters cross-functional collaboration are two of the most common barriers that obscure a more insightful and actionable view of engagement.
DATA, DATA EVERYWHERE
The challenge that most business would face is pulling together the data enabling them to start investigating a specific KPI and then framing the actions to improve it. The data sources are likely to cover a whole range of categories, including, for example, from how consumers navigate the user interface to telemetry data from the set top box, and from the performance of marketing communications to the types of content viewers are looking at.
As well as understanding the content and product features driving engagement, it’s important to factor in all the elements of the user experience that may have an impact. These might include price and offers or discounts coming to an end.
Figure 4: SVOD content performance value tree
Investigation area
Business objective
Value driver
Monitoring KPI
Path 1: BehaviourPath 2: AudiencePath 3: SuggestionPath 4: InstrumentsPath 5: Time
Path 1: PopularityPath 2: Interaction
Usage Sentiment
Increase minute watch per customer
Increase customer loyalty
Increase customer loyalty
CONTENT
Increase minute watch per customer
• Total minutes watched
• Penetration rate • Completion rate • Avg # of views
• # of followers • # of shares • # of comments
Action • Improve recommendation system
• Suggest content according to best channel
• Manage abandoned content
• Social targeted campaigns
• Propagation model to improve customer engagement
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Every organisation is different. So each unique business would need to develop the details of the engagement measurement strategy that works for them.
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Trust is a critical component of effective engagement, so it’s crucial that the data companies collect and use (and how they gather it) creates and enhances consumers’ trust and security. Privacy is one consideration here. But so is transparency and the need to tread a careful line between what’s cool and creepy. While consumers’ may have an inflated sense of the value of their specific data, they nonetheless are increasingly sensitive about how it might be used.
Video companies need to make sure that they enhance trust by embracing consumer concerns and offering clear benefits in exchange for the data they harvest. And as digital touchpoints proliferate, that approach has to be applied across the whole business.
ORGANIZATIONAL BARRIERS
It’s not unusual to see specific teams (eg operations, marketing, products) focusing only on the metrics that matter directly to them. This tends to silo data, and prevent the development of a culture of data-driven decision making.
Often, companies face organizational challenges that impede their ability to operate in an integrated way. Typically, they have no single point of accountability for engagement across channels/products.
Leadership and governance are siloed and there’s minimal cross-channel coordination, a similarly un-federated approach to products and channels and no official strategic alignment of priorities.
STEPS TO HIGHER ENGAGEMENT
Right across the organization, leaders want to understand the impact that engagement has on their areas of responsibility. Finance want to assess, among other things, lifetime value, acquisition fees and content ROI. Marketing must measure the effectiveness of campaigns and offers. Operations need to understand frequent consumer pain points. Chief Product Officers need to identify the features that users value and which persuade them to consume more.
Setting the business strategy provides a prioritized set of initiatives which track back to an organization’s overall stated requirements. Each product feature should be linked with a business goal to connect investments in innovation with the desired business outcome.
A MULTIDISCIPLINARY APPROACH
Engagement is a many-headed beast. It needs a team of multiple talents to tackle it. So how can businesses
get started? One quick way is to put together a multidisciplinary “pod” and set them to work to investigate the actions needed to improve a clearly defined KPI.
That means assembling a superhero team with relevant skills: user experience, data and analytics, visualization, content and so on. They can experiment to find and pull the levers that can move a metric in the right direction. Underpinning all that is the need to have the user data in place that can easily segment representative control and test groups in order to carry out multivariate testing to get rapid insights into how leading indicators are moving. Above all, tackling engagement needs to take an iterative approach. That means constantly testing, learning and refining.
ONLY CONNECT
Every digital video business will have slightly different aims for engagement and ways to achieve it. But they all need to find new ways to identify what’s driving it for their business, and what they can do to improve it. The key to getting started? Stay focused. Identify one metric that matters. Test what works to improve it. Learn from that and test again. Repeat.
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AUTHORS
Andrew McCafferManaging [email protected] Gemma [email protected] James WeeksSenior [email protected] Chris EichResearch [email protected]
ABOUT ACCENTURE DIGITAL VIDEO
Accenture Digital Video is an Accenture business unit focusing on helping companies build successful digital video businesses by enabling them to capture new growth opportunities while maintaining profitability in their traditional business in a rapidly changing market. Working closely with clients, Accenture leverages a portfolio of highly relevant integrated business services enabled by open technology platforms to deliver successful video business outcomes; from thinking to planning to doing. A global industry leader, it has a 20 year track record of advancing video technology and business innovation, supported by a global workforce of more than 2,000 dedicated professionals helping clients succeed in a complex, volatile landscape. Visit us at www.accenture.com/digitalvideo.
