Revamping Strategy Doubles Revenue and Boosts Subscribers
Situation
The company, owned by a religious organization, had a twofold mission, both to operate as a profitable business but also to further the Christian faith. It had launched the service at a relatively low price, $7.99/ month, thinking it would generate a high sales volume. However, neither the number of subscribers nor revenues met corporate objectives.
The challenge
To find ways to increase sales volume at higher subscription prices, enabling the company to reach its goals.
Findings
Willingness to buy (demand) among the company's target market is virtually unchanged in the price range from $5/month to $15/month. This means that at the original price ($7.99/ month), revenues will be approximately half of what it would be at $15/month.
The company's message of "family-oriented content" was not effective in generating demand. Neither was the marketing focus on movies. Instead, messages related to TV shows with "Content for kids that is appropriate, entertaining, and uplifting" drove much higher demand at prices up to $10/ month, and a message of "No Sex or Violence Surprises" drove a higher demand up to $15/month.
Results
A segmented content and subscription model were developed: a "Kids package" with content specifically aimed at young kids at $9.95/month and an "All content" package at $14.95/month.
Marketing altered the focus away from movies and towards TV shows with specific messages around the theme of "No Sex or Violence Surprises."
The price of the "All content" package was increased (in several stages, over 24 months) to the recommended price, leading to a doubling of revenue.
The new "Kids package" generated a surge of new subscribers, increasing the total subscriber base by about 40%
