In recent years, more consumers are seeking everyday methods of saving money. Oftentimes, this means cutting down on certain luxuries and substituting them for free options. This is certainly true when it comes to cable TV, meaning that companies in this industry must work harder than ever before to boost their customer retention rates. If a cable company's most reliable and high-value customers are receiving exciting benefits that allow consumers to offset the costs of their monthly cable bill, they are likely to remain loyal for years to come.
Frugal customers eschewing cable
TVNewsCheck reported that according to a recent study by GfK Media & Entertainment, many of today's consumers are opting to use over-the-air broadcast TV rather than paying for a cable subscription or satellite service. In fact, the research found that 22.4 million households in the U.S. receive their TV through broadcast signals alone, and this accounts for 59.7 million individuals. Many people are ending their cable subscriptions as a way to save money, the study discovered, as 6 percent of households with TV have "cut the cord" at one time in the past to reduce expenses. GfK noted that often, customers said that "there isn't enough value for the cost" to justify fitting these services into their strict budgets.
Plus, it's important for cable companies to remember that when it comes to acquiring and retaining younger customers, they have many challenges to face. Having grown up with the Internet, many millennials are most comfortable watching their favorite shows online for free, even if it means waiting several days for a recording to go up on a channel's website. Additionally, many use services such as Netflix, which has emerged as a major competitor to traditional cable services.
It may be challenging for today's cable companies to keep their best customers, but that doesn't mean it's impossible. The key may be demonstrating that there is a clear value to subscribing to cable services, even though the monthly fees may not be as low as some other options. Radio & Television Broadcasting Report emphasized that in a report by PricewaterhouseCoopers (PwC), the research firm revealed that there are a few important aspects that contribute to the long-term success of cable companies and other subscription-based communication providers. For example, it is critical that cable businesses present attractive promotional offers alongside reasonable pricing policies, and all initiatives should be tailored to the demographics they aim to entice. Older customers will want to be eligible to receive different offers and discounts than younger ones, for example, so taking a one-size-fits-all approach to loyalty rewards isn't a strong plan.
Additionally, PwC noted that it's important to establish open lines of communication in order to fuel more customized care. The study found that cable customers' loyalty depends on having a direct and personal relationship with their service provider, and this gives businesses a wealth of opportunities to surprise and delight them. If cable companies are able to gather the right information and leverage it to craft unique customer retention programs, they may be able to show their best customers that subscribing is the right choice.
Consumers can watch TV from many sources today, and many of the methods are very low cost. To this end, it is critical that cable companies step up their customer retention marketing strategies to offer rewards that are not only highly valuable, but thoughtful as well. Providing incentives and rewards that help consumers save money on things they do every day with customized discount programs is one way to create value and promote loyalty.