Market Swings: What Can Be Done About Them?

Jason Kirk

We have all seen it. It’s everywhere you look. Retail sales go up. Retail sales go down. Oftentimes, this comes to the forefront of the news during holiday shopping season, or some other big event such as annual sales tied to back-to-school time or graduation season. What is interesting is not necessarily that these things happen. Or even why they do. But rather what can be done about it. And all consumers, be they in mainstream or adult markets, go through sales patterns.

The mainstream shopping trends we all see through the news. But consumer trends in adult markets can sometimes be trickier to notice. Through the years, we have seen a number of ups and downs in these markets and how they can impact the sales numbers of online merchants. Having the honor of providing services to so many over the years enables the opportunity to take a somewhat long-view look into the information and see some trends. The data is there, and it is worth examining.

While the drivers for consumer buying patterns are varied and in some cases seasonal, the market trends associated with them can be addressed.

The data. Historically, a noticeable dip in consumer traffic seems to occur every year as Spring and Summer arrive. Certain segments, such as live cams, seem to see a larger impact than others, but to some degree all segments seem to experience the phenomena. As is illustrated by the graphics, be it new sales, upsales, or upgrades, a dip seems to hit right around the fourth month for each segment. However, it is interesting that cross-sales and actions done via cross-sale APIs see the opposite trend.

Preparation is key. So what does this all mean? Are we just to do nothing and accept the fact that traffic will dip and therefore conversions and sales could be impacted? Hardly. With some thoughtful preparation and planning, you can navigate the spring/summer “slow down” or any other market swings. The best part is, the tools to help you do so are likely already being used, or are right at your fingertips. Just about any e-commerce provider will have a number of features you can leverage to help your business be ready for a market swing. Some of the more common ones to look for and use are outlined below.

Step 1: Keep their attention. We get it. Consumers tend to go on vacations, take breaks, or stay otherwise engaged in the spring and summer. While that perhaps cannot be changed, what can be is how those consumers are being reached during these periods.

Connecting and communicating with the member base is something every provider should have easily accessible via member databases, which can be accessed for additional communications. Promoting new content, specials, promotions, or even new features on your site can go a long way to keeping them interested and providing value to the their existing paid membership. However, be aware that too much contact can also backfire and alert someone to an unused membership. So choose the members you contact carefully, and select those that have had fairly recent logins before reaching out.

Step 2: Secure your existing base. Most processors offer loyalty and retention tools built in to their platforms. These are great options to keep in mind since they are specifically designed to retain and provide value to the buyer in the membership. Loyalty discounts offered initially can secure a long-term relationship, since it provides a similar feeling to a rewards program. The user has to stay for an extended period of time in order to get a lower price. By rewarding loyal consumers from the beginning, they may just end up staying with you regardless of any market condition.

And that brings us to another type of consumer, the one that is about to cancel or has just done so. Cancellations do happen and often, they are inevitable. But our data shows that many cancellations could be prevented with some simple steps. First of all, prevent the cancellation. Provide a solid support experience, fresh content and active communications with the members to help them see the value. Keep them engaged to your service or product offering. Secondly, if they are trying to cancel, understand that there IS a reason. Are they leaving because they are bored? Are they leaving because they are financially strapped? Or do they just not like your content? All are viable reasons and each has a course of action which could end up keeping them as consumers.

I’m bored: These consumers are looking for something new, so why not give it to them? Provide value through new content, offer free samples, push upcoming teasers out to highlight what is coming soon. All of these actions can all go a long way to keeping these consumers around. Many processors have automated cancellation and expiration emails which can be customized with offers, content, banners and teasers to keep them engaged. By setting these up ahead of time, you might be surprised at some of the results.

I’m too financially strapped: This can be a difficult one to overcome. If consumers are short on funds, it is hard to argue against that. However, you can provide a value option. Cancellation discounts can keep members that are on their way out the door with you, by offering a special price for a short period of time. These can also be combined with a loyalty discount to enhance the offer. Some billers also offer this kind of special cancellation offer via phone, if the member calls in, so be sure to check out how your provider may be able to help you with these situations.

I don’t like your site: OK. Consumers don’t like your site. How can you keep them around? What about providing them with an offer to a partner site with different content when they try to cancel? We have seen success when a merchant offers an alternate partner offer at cancellation. The direct revenue may not be on your own account, but you can receive a revenue share with the partner site.

Step 3: Attract returning sales – bring them back. One method to address market swings that can sometimes be overlooked is checking back with old members. We have seen success with site owners reaching out to expired or cancelled members and reengaging them with discounts, promotions, and new content to try to coax them back. This is a warm audience and many merchants have found success in reengaging them in their business. And on another side of this – many merchants have used that same expired user base to promote other partner offerings with a rev share. Some of those members left for a reason, and while it is hard to swallow – it might have been your content and your site. But another partner with different content may have more success in capturing these lost members with new and different experiences.

Step 4: Upsell the existing base with new offers and promotions. In Step 2 it was all about securing your existing base. While that is a valid tactic and one that can be fairly straightforward to implement, don’t forget about the potential to upsell your base for additional revenue opportunities! Use external partners or even your own additional sites to provide a member experience that promotes value and offers other service options. For instance, offering premium content and a higher quality (HD) viewing experience can entice users into additional purchases. And a practice which is tried and true for many years, is one in which merchants will manage multiple brands with complimentary content and offer package memberships.

More specifically, using cross-sells and one-clicks, we have seen many merchants wisely offer complementary toys, DVDs, downloads, clothing, and other related items in conjunction with their digital content – either at discounted prices or as a value-added upsell. And the most recent surge in sales has come from the practice of incorporating crosssales using one-clicks to new forms of content, such as interactive and dating sites. With little development and integration, a simple referral can turn into an additional no-cost revenue stream.

Staying on track. While the drivers for consumer buying patterns are varied and in some cases seasonal, the market trends associated with them can be addressed. Yes, it’s true that we at CCBill have seen a lot of data over the years that help identify when some market swings occur. However, that does not mean everyone should stand idly by during the next few months when the so-called “Spring slow-down” presents itself. By taking some action steps to help keep existing consumer bases engaged, your business can remain strong.

Jason Kirk, brand manager for CCBill, is an accomplished software and technology professional with 16 years of experience in highly critical development life-cycles who strives daily to improve the end-user experience through a variety of methods including constant reevaluation, established business processes, implementation of automated systems, and an innovation-inspiring open work environment.