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Author's profile photo Jonathan Chen

Consumer-Centric Practices Target Customer Needs and Business Success

Reina is sitting at the bus stop wondering whether she should subscribe to the online video streaming service Netflix. She is a student living on a tight budget.

Reina remembers her digital media professor saying that it is one of the most successful digital media companies due to being “consumer centric” and inexpensive if you watch a lot of movies and television.

Right at the moment, Reina cannot remember what consumer centric means. But she knows that she needs easy, inexpensive access to videos. Reina does not have a television and does not want to impose on her roommate who does have one. She knows that her laptop computer is powerful for online video streaming.

Reina researches Netflix on her smartphone as she waits for the bus. Hyper-connectivity is an ordinary aspect of her life. Consumer-centric companies reach out to customers via Mobile media. Smartphones and tablets are a way to reach customers almost everywhere and at their convenience. Mobile tools are a major part of the digital transformation of media.

Gaining more help than expected, Reina sees that she can receive a free trial subscription for a month. She notes that basic service after the trial subscription will cost her about as much as three cups of coffee in the student union. It makes her feel like she might be lucky enough to win a game of darts when she gets back to campus.

Now Reina has that soothing feeling that someone is taking care of her. She has entered the world of consumer-centric media in which product offers and delivery are tailored to meet customer needs.

Consuming Content & Producing Data

Reina begins to add content to her playlist. Meanwhile, Netflix is learning about Reina’s viewing tastes. It begins by building a profile based on her anonymous user data. Netflix accesses the data to help format choices on Reina’s homepage.

Reina is among the 75 million Netflix subscribers reported by the digital news clearinghouse DMR.  Netflix notices a pattern as her choices accumulate. She is one of the 61 percent of users cited by DMR who binge watch television on Netflix. Through analysis of her viewing behavior, Netflix tries to match her choices with similar TV shows she may want to watch in serial style.

Netflix sends Reina an offer via email for a basic subscription near the end of the month. She accepts because it seems like she can always find what she needs on Netflix and arrange viewing to her liking.

Product filtering is crucial to consumer-centric marketing.

Netflix refers to its stored content as equaling 125 million hours of viewing. As Gizmodo points out, it would be comparable to sorting through 58,292 movies. So consumer-centric product filtering removes the headache of searching for what you want in video streaming. 

Smoothing Bumps in the Stream

Such huge library of streamed content are possible due to huge cloud storage infrastructure, including Amazon Web Services (AWS). But there are bumps in the stream sometimes that make customers unhappy. A consumer-centric company pays close attention to service disruptions and viewers’ consumption patterns.  

AWS also helps streaming customers by housing powerful software platforms, including SAP HANA. Big data needs to be stored and sorted somewhere. SAP HANA makes it possible to gather and analyze huge quantities of data in one place and in real time.  Thus, data about video content that is being streamed, to which device, at which quality it is rendered and how viewers respond to the content is instantly staged in SAP HANA and made available for online video analytics. 

Insight into quality metrics for delivery experience and their impact on engagement metrics are instrumental to optimize viewer experience and engagement.  Insight into how content is consumed under which circumstances (device, time of day, mobile or wired network…) what is the top content and which are the least used features guide content investment decisions where savings can be made with limited impact on overall viewership.

Video consumption data also enriches audience profiles and helps to identify target segments for specific campaigns and offerings or optimize targeted video advertising, by digital ad networks, such as SAP XM ExchangeMedia

If a customer complains about service interruption, a service agent usually does more than explain how and when the problem will be resolved. The agent may grant free content or a reduced subscription price for a period of time. The result is that customers are reassured that their business is important to the company.

Realizing Business Gains

At the business end of the subscription relationship, companies benefit by reducing customer churn. This further reduces the amount they spend to acquire customers.

As customers stay with the company and move up to more expensive subscriptions, the lifetime business value of the customer increases. Finally, access to well-defined customer profile and behavior attracts advertises to streaming company.  Though Netflix does not display ads in their streaming service, other services streaming services that do would command higher ad rates for their well-defined audiences. Advertising is an excellent source of revenue. Advertisers reach their targeted customers like Reina, and she also reaches the content that interests her. It is a successful game of darts all around.

To learn more about SAP solutions for Media companies, click here.

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