Assignment Sample on Customer Experience Strategy
Introduction
Almost every kind of business is exposed to stiff competition nowadays. Customer experience (CX) plays a central role in deciding the fate of the companies in the market. The companies associated with core customer centric businesses are typically exposed to this aspect. This study would focus on the CX analysis of Voot, an Over The Top (OTT) video streaming service application owned by Viacom 18 pictures in India.
The importance of customer experience
CX can be defined as the sum total or all forms of interactions a customer has with a company over a period of time. It can also be referred to as the feelings of the customers with respect to the services and treatments they receive over a period of time (Peppers and Rogers, 2017).
CX’s importance lies in the aspect of increasing customer loyalty, brand value and reputation, which denotes the value of a customer in a lifetime (a period of time with respect to purchase). Better the CX, the better is the intent of the customers to make repurchase decisions (returning customers). On the plus side, customers satisfied with their experience are less likely to switch brands, which decreases the switching cost of the companies as well (Wang et al. 2019). The companies with a mindset of driving CX derives 4-8% more revenue as compared to the competitors (Morgan, 2019). 96% of the customers mentioned that CX is the basis of their loyalty towards a brand, 17% of the customers are willing to pay more for companies with better CX (Morgan, 2019). In OTT companies, the CX is determined based on quality of the entertainment content showcased in the application, exclusivity of the content, pricing of the services, features of the application with respect to its counterparts in the market (Satyanarayana et al. 2023).
Consumer persona
Customer or consumer persona can be defined as the profiles, which are fictional in nature and represent a particular target audience. The role of customer persona lies in the aspect of determining customer characteristics, needs, goals, pain points (problems), which helps a company to develop CX to develop customer centric strategies with respect to the above aspects (Chaffey and Ellis-Chadwick, 2016). Voot as an OTT platform appeals to a wide age range of population with different characteristic traits or motivations. The below customer persona is of a Gen Z customer of age 22 years.
Figure 1: Consumer Persona
(Source: Learner)
Customer journey Mapping (CJM)
CJM can be defined as the structured way of determining the needs, wants, motivations, expectations of the customers in every possible stage from pre-purchase to purchase and post-purchase stages (Alvarez et al. 2020). As shown below, CJM consists of 4 stages: reach, act, convert and engage. A customer primarily ‘reaches’ a business or application via advertisements, posts, promotions and ‘acts’ on it by making the first purchase if they want. They ‘convert’ to loyal customers when they make repeated purchases and ‘engage’ only if they stay loyal (Homburg and Tischer, 2023).
CJM is important as it helps to analyse the interactions of the customers by taking their feelings into account and likelihood of their repurchase decisions. Customer subscription increase, repurchases made etc, can serve the purpose of assessing the gaps of a service (if any) and develop CX to avoid the risk of substitution (Rosenbaum et al. 2017). Based on the customer persona developed earlier, the below CJM has been developed for Voot video streaming service. Gen Z customers usually get to know (reach) about applications, recommendations, and show advertisements from social media as this generation tends to use social media mostly for every kind of information (Vahoniya et al. 2022). The customers ‘act’ on the promotions, information, recommendations by downloading the application, starting the free trial and browsing the exclusive content. If they feel positive and convinced that the content provided by Voot is worth the price (no matter how nominal they might be), they make purchase and repurchase decisions to convert and engage with the application. Unfortunately, as per Statista, Voot lost 12 million subscribers recently due to lack of quality and engaging shows (Basuroy, 2022; Mehta, 2019).
Omnichannel marketing
Omnichannel marketing is the concept of communication of customer demands, preferences, concerns through various channels or modes of communication like email, social media, application based bots, service agents and more (Cui et al. 2021). The importance of omnichannel communication is high as customers inherently value the services or businesses which value their demands, wants, needs and make them feel heard. This form of marketing concept is a budding concept and combines marketing with customer interaction. Voot has various channels for marketing and communications (Peppers and Rogers, 2017).
Voot application
Voot follows a freemium business model to lure in the customers, which includes providing access to some of the contents (video streaming) for free and leaving the popular and exclusive shows to be availed through subscription only. This satisfies the notion of “reach” stage and helps to make the customers “act” and “convert” later (Fitzgerald, 2019). Due to Gen Z’s behavioural trait of researching the reviews of anything before buying, they proceed to buying subscriptions only if they know about the shows or movies showcased in Voot or the shows are critically acclaimed or worth watching (Parihar and Kant, 2021). Once they buy subscriptions, the engagement is easy for the OTT applications due to the endowment effect. It is a psychological theory, which suggests that it is the inherent nature of people to continue to buy things, which they already have, which happens in OTT applications a lot. It helps to move a customer from ‘reach’ to ‘convert’ stage but unfortunately the endowment effect is not that easy to implement for gen Z customers due to their picky nature (Fitzgerald, 2019). The mode of communication here is through in-app service agents.
Bundling with telecom companies and other applications
Voot bundles with telecom companies like Airtel, Vodafone and third party applications like Amazon pay to catalyse the sales or growth of paid subscriptions of the customers. Vodafone Idea (VI) offers access to Voot Select (subscription based exclusive) content like Asur, The Gone Game, and more with Rs. 2,595 prepaid plan (Akolawala, 2023). Viacom has also partnered with Paytm for providing access to Voot Select for 6 months with Paytm first subscription, 12 months of subscription to Voot is provided in exchange for 299 super coins in Flipkart. Jio Fiber optics provides access to 14 paid OTT applications including Voot (KSOU, 2023).
TV and social media
Viacom 18 network channels like Colours TV, MTV and more advertise about Voot in between shows so that customers can switch to subscription based Voot select. The customers are advertised by stating their gain by having access to all the local TV shows, live sports match ahead of time or before being aired to TV, exclusive shows, and ad free services. As Gen Z customers like to binge watch content, this strategy works for them mainly (Sundaravel and Elangovan, 2020). Customization plays a major role in these applications, which helps to enhance the CX. For instance, OTT applications like Voot provides recommendations on shows as per most searched content on the application, social media and more, which is an example of customisation. Customisation helps in improving CX as they feel heard (Habib et al. 2022).
CX performance metrics
Today’s competitive market and its customers require their individual preferences to be met instead of being considered as the masses, which is met by customisation. Forecasting Customer Lifetime Value (LTV) can be beneficial here. LTV can be defined as the metric used for predicting the amount a customer is likely to spend on a service/product/business over an entire period of time with respect to the relationship with a business, which is denoted as lifetime (Wang et al. 2019). This is important for making transaction based strategies usually and developing CX if the LTV values degrade with time. However, one of the cons of considering LTV is that LTV can only be predictive and not an ultimate measure to assess CX and customer touchpoints (Xing et al. 2021). For Voot, LTV assessment with the help of survey responses, annual rise or fall of subscription, the intent of people to refer the company to their friends and families, might help in determining the standpoint of the company in the market and its ability to continue in the future (Wang et al. 2019).
LTV calculation can be done with the help of consideration of Average Revenue Per User (APRU) divided by user churn rate (CR) or number of customers, who stopped their subscription on Voot. The formula is shown below
LTV = ARPU / CR (Bare Metrics, 2023)
For Voot, as mentioned earlier, it lost 12 million or 12,000,000 followers recently in 2021. The CR would be 120,000 (in %). The revenue in 2021 was $2.1 Billion or $2,100,000,000 and the number of paid subscribers is 1 million or 1,000,000 (S.N, 2021; Basuroy, 2022). The ARPU would be $2,100,000,000/1,000,000 is $2100 during the lifetime. The LTV would be = 2100/120,000 or 0.0175. Voot’s LTV is in decimal form, which is not a positive value and signifies that the company lacks enough potential to retain its customers. This is mainly due to the lack of quality of the contents as compared to Amazon Prime originals, Hotstar originals, Sony Liv and Zee 5 (Sull and Turconi, 2021).
Net promoter score
The Net promoter score (NPS) is a metric used to assess the average customer loyalty with respect to CX. It is calculated by subtracting the % of promoters (Ardent followers of the company likely to refer and promote the app) and % of detractors (users likely to leave using the service or negative influencers) (Baquero, 2022). Due to lack of data on Voot, promoters and detractors cannot be calculated. However, the promoters and detractors of the company can be identified through surveys, social media response assessment. For example, rating scales can be used in surveys to know the intent of customers in continuing or discontinuing their subscription (Baquero, 2022).
Customer effort Score (CES)
Businesses use the Customer effort Score (CES) statistic to assess how easy or challenging it is for customers to connect with their goods or services. Like other streaming services, Voot competes fiercely for customers in a market where providing a great user experience is essential (Sashi et al. 2019). Customers are more likely to remain interested and committed if content is accessible and enjoyable on the platform. By putting CES into practice, Voot is able to recognise the effort users dedicate when interacting with the application and take proactive steps to lessen that effort. CES can be calculated on a scale of 1-5 where the score can be collected from customers through surveys.
Customer equity
Customer equity is a concept that describes how much a customer base has been worth to a firm overall throughout the duration of their partnership. Voot competes in a fiercely competitive sector where finding new clients may be expensive and difficult. Voot can recognise the worth of its current customers and endeavour to unlock their potential by putting a strong emphasis on customer equity (Ho and Chung, 2020). Additionally, customer equity offers an in-depth overview of Voot’s customer base and its potential for income. Voot discovers high-value consumers that make a big contribution to sales by segmenting clients based on their worth and examining their purchase patterns.
CX processes in different industries
Critical Success Factors (CSFs) can be defined as the factors or elements necessary for a company to achieve its business mission, vision, and goals (Moktadir et al. 2020). CSFs like structure, people, and measurement would be considered in this study. People play the key roles in determining the success of a company, especially in terms of CX. People here can be the people of the company, customers of the company. The interaction between the two determines the success of a company and its CX (ACCA Global, 2022).
For instance, Voot is a customer centric business and its service structure is made in a way that it is open to communication with the customers, customisation, and various plan formats for various kinds of customers. This in turn helps Voot to meet its mission of being a future ready entertainment company suited for all. One of the main things to consider in the case of CSFs is time to time assessment of the factors against the achieved targets. Measurement plays a key role here, which helps to measure and benchmark the success factors with the actual achievements. This applies for all kinds of industries with differences in the benchmarks and assessment criteria mainly. For instance, Voot being an OTT company measures its success by analysing the rise or fall of subscribers, revenue, and popularity of the shows. Other industries like food, manufacturing determine their success with the rise or fall of sales, revenue, increase of assets and more (Jain, 2021).
- Measurement can be applied by setting Performance management systems and benchmarking systems in Voot
- People as a CSF can be applied by dividing responsibilities for current and future projects, setting monthly targets and assessment criteria.
- Structure as a CSF can be applied by creating a detailed plan of Voot, its services and plans (ACCA Global, 2022)
Giving customers a fully immersive video streaming experience stands at the centre of Voot’s customer experience strategy. With features like customized suggestions, handpicked playlists, and user ratings, it focuses on providing a variety of content, including regional programmes and movies (Dhiman, 2023). While, on the other hand, social interactions and content sharing are at the core of Facebook’s customer experience strategy. Users may connect with friends, post updates, images, and videos, participate in events, have conversations through comments and replies, and join groups (Vahoniya et al. 2022). Although Voot and Facebook both place a high priority on user experience, their procedures vary as a result of their different platforms, objectives, and revenue strategies (Manuoğlu and Uysal, 2020). While Facebook is focused on social connections, content sharing, and targeted advertising, Voot focuses on providing a superior streaming experience. Understanding these distinctions enables customers to experience strategies tailored to the particular needs and desires of each platform and their target user group (Photiadis and Papa, 2022).
Conclusion
It can be concluded from the report that Voot’s omnichannel marketing and pricing strategies are effective for CX as various channels and plans are provided for the customers. However, Voot lacks engaging content like its counterparts in the market. Gen Z is picky and seeks critically acclaimed shows, which can be lifted with better content. Tie ups with valuable production houses and big banners might help in this case.
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