How IBM is Weathering the Subscription Storm and Pivoting to Paid Success

How IBM is Weathering the Subscription Storm and Pivoting to Paid Success
Posted on June 10, 2021

The subscription economy is booming. More than four in five U.S. consumers* now pay for at least one streaming video service, helping support a broader subscription economy that has more than quintupled in size since 2012.*

In no sector has this held truer than in consumer-facing media. The pandemic—coupled with a rising appetite for privacy—has only accelerated a years-long shift away from the traditional ad-supported model and toward the lucrative world of paid content.*

 

But pivoting an all-encompassing business model and driving results in an increasingly crowded space is also a mammoth task. Marketers need a thorough understanding of their value proposition, access to cutting-edge technology that enables testing and optimization, and—most importantly—an excellent product that delivers a compelling experience to consumers.

It all raises an abundance of questions. On CleverTap Engage, our podcast and video interview series where we shine a light on leading CMOs achieving meaningful and memorable customer engagement, hosts Peggy Anne Salz and John Koetsier recently sat down with someone who has answers. 

Sheri Bachstein — the global head of IBM Watson Advertising and GM of the IBM-owned Weather Company — has overseen a wildly successful pivot from a free app to a paid app. This came as a result of their effort to diversify revenue at the legacy media property. 

Since launching The Weather Company’s app-based, premium subscription offering less than two years ago, Bachstein has led the initiative that’s garnered nearly one million paid subscribers. What’s more, she says it’s experiencing further double-digit growth every quarter.

Over the course of the 30-minute interview, Bachstein shares priceless insights on personalization, leveraging AI to solve marketing challenges, the future of advertising in the privacy age, retaining subscribers, managing churn, and so much more. 

Key Takeaways

Research, Research, Research

Bachstein’s team didn’t just launch a subscription service and second-guess what users might be willing to pay to use it. It conducted extensive research and went to the source with surveys and focus groups. Listening to what users need to understand what they expect from a paid product and empowering users to customize it based on their individual needs allowed The Weather Company to hit significant subscriber numbers in record time.

Since launching a premium subscription offering just 18 months ago, the company counts nearly one million paid subscribers

Leaning Into the Future With AI

Marketers shouldn’t fret over the loss of identifiers such as IDFA or third-party cookies. In reality, identifiers provide marketers with insights related to customers’ past actions and behavior. But even perfect data about the past doesn’t equip marketers to succeed in the future, Bachstein says. AI is predictive, providing marketers the building blocks for a future-oriented strategy that allows them to understand what customers will need tomorrow. In her view, AI is at the core of approaches that will enable marketers and brands to “connect with customers and anticipate what their actions may be, so they can better serve them.”

Retention Requires an Excellent Product, First and Foremost

The Weather Company has achieved a 75% retention rate, largely on the strength of its product. A successful paid product requires delivering something that consumers not only need, but that they can’t get for free somewhere else. 

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