Understanding your consumer is fundamental to choosing which partners to align with.
What represents added value for your consumers and your potential partners?
How do you know? Did you ask them?
The common mistake here is to substitute distribution capability for added and perceived consumer value. Or at the very least to present one as the other.
Let me talk you through a recent example:
Spotify has now bundled Hulu to its Premium members so for the same subscription fee I can have Hulu basic package too.
I am sure for the 87m reported premium subscribers on Spotify this makes great sense. And for the Hulu streaming service the appeal of an audience that is 3.5 x the reported number of current subscribers, it also makes sense. So the appeal for the mass audiences on both platforms seems like a no-brainer.
However there can be unintended consequences of such an activity if you mass apply this liberally against both subscriber bases.
- I am a premium subscriber of Spotify and I am also a subscriber to Hulu, but a lapsed user (can’t remember the last time i went on). And because this new partnership doesn’t appear to have been screened against existing users, it served as a reminder to me to cancel my subscription to Hulu as now I get it for free.
Was this the intended consequence of putting these two powerful platforms together or am I just collateral damage in the greater schema?
I suspect not. However if this was written another way:
- a paying subscriber on both platforms can be considered a fair casualty in both parties willingness to expand their audience base?'
I am pretty sure no-one ever presented it that way in either business.
For me, the savings only served to justify (in my head) the Netflix price hike!
The tension between partnering for acquisition and adding value to your key core customer base is a tough balance to strike. However it is one that needs to be thought through from every consumer viewpoint.
