The media industry is still in a phase of transformation. In the past, Swiss media companies tried out a great many new media business models, few of which succeeded. The core problem: the companies changed their use of technology, their structures and their agility, but did not increase their customer centricity. As a result, we often hear from the media industry: 'surveying customers doesn't achieve much' or 'the customer doesn't know what they want.' This is a dramatic misjudgement that is very widespread in the media industry. Our experience shows that the central problem in the media industry is the barely existing competencies in customer-data acquisition and customer-insight generation.
Our client's project goal was to launch new (digital) business models, since the existing model has a finite lifespan. Several ideas were on the table, and there was uncertainty about which to implement and with what priority. As it turned out, many of the intended business models lacked relevance and therefore customer willingness to pay. Based on the project results, CustomersX® recommended establishing one of the new business models.
Customer Value-based Decision Making
Customer-centric Transformation
Co-Creation
Customer Management
The media company is threatened by a declining customer-base value. Media use is becoming more individual. When establishing new business models, this can lead to high costs and small market potential, given the conditions in Switzerland. The goal was to develop new business models that appeal to younger target groups in particular. Based on our business-model consulting offering, we created a six-stage project approach to minimise risk and strengthen competencies in Customer Value-based Decision Making and Co-Creation.
In the first stage
the existing business-model ideas were critically evaluated. The respective value proposition was examined comprehensively from the perspectives of different target groups. The competencies and organisational prerequisites were then compared with the individual value propositions. As a result, there were seven ideas for new media business models.
In the second stage
the seven business-model ideas were tested from the customer's perspective using co-creation workshops. In practice, we often see people simply ask: 'do you find this or that idea good or bad?' Business models can't be tested that simply. You have to focus on the underlying needs: how great is the frustration with existing solutions, and which needs does the new idea satisfy and to what extent? Considering customer value and willingness to pay carries great importance here. In general, co-creation is still given far too little attention at the various stages, even though it's a fast and inexpensive method for significantly increasing decision certainty. As a result, an initial round of feedback on the seven media business-model ideas was available.
In the third stage
the business models that customers rated positively were subjected to a further, more detailed proof of concept. Service delivery, necessary partnerships and the cost structure were analysed in depth. The chosen project approach enabled fast and efficient implementation: instead of conducting lengthy internal analyses first, initial customer feedback was obtained as quickly as possible.
In the fourth stage
the remaining business-model ideas were tested using a quantitative study. While the previous stages filtered the selection of ideas, this stage was meant to quantify the potential. Here it's very important to take customer value into account. Many companies have a large number of C customers or customers with a very high price affinity. Failing to take customer value into account in quantitative customer surveys is one of the biggest mistakes, and in the media industry in particular it has led to customer surveys being dismissed as irrelevant altogether.
In the fifth stage
the remaining business model was developed further. An initial organisational setup, a sales model and a target system for customer-relationship management were established. It's also important to consider the values and the way of working together. In our projects, we always make a point of considering the sales of new business models — something most publications and approaches neglect shamefully. As a result, our client received an efficient, fast and value-oriented analysis of different business-model ideas. The selected media business model has a very strong chance of succeeding in the market, with comparatively low risk for the company.
In summary
Based on our DTC approach, in the sixth stage the company's employees were trained to conduct customer surveys and co-creation workshops independently. At its core, consulting always also means enablement. Acquiring valuable customer data and deriving customer insights is the central competency for improving a company's customer centricity. Precisely in industries marked by major transformation, such as the media industry, it's important to keep the company's responsiveness and adaptability high by increasing customer centricity. Without systematic learning and improvement, this isn't possible.
*We take confidentiality towards our clients seriously. The name has been changed; the results are real.
