Spotify Q3 results set to show strong subscriber growth amidst back drop of fierce competition
Online music streaming service Spotify will post their Q3 results tomorrow, with subscriber numbers expected to increase from 85 million to 88 million. These projections follow on from strong user growth figures and lower customer churn in the last quarter. Premium subscribers soared 40 percent and the company also reduced the rate of customer cancellations in the U.S.
Spotify is on a mission to attract and retain customers in a race against rivals such as Apple Music, Youtube Music and Google Play Music. Research conducted by relationship marketing hub, Optimove has found that up to 80 percent of customers who sign up for subscription-based services will unsubscribe within the first three months. This is putting pressure on subscription-based companies to ensure they are delivering a personalised offering to every customer, catering to their unique affinities and creating exclusive value to each one. Being able to deliver such experience will result in high satisfaction rates, and reduced churn.
Pini Yakuel, CEO of relationship marketing hub Optimove, says: “Given that a larger proportion of users unsubscribe in the first three months, brands need to be more aligned with their users to understand what they want as well as what motivates their decision to unsubscribe. Although acquisition is a priority for brands, reducing customer churn by creating short- and long-term subscriber value is vitally important.”
Spotify has turned to using big data, artificial intelligence, and machine learning techniques to deliver a unique and personalized music listening experience for subscribers. Through data algorithms, Spotify extrapolates insights based on subscriber streaming behaviour and preferences which personalise listeners’ experiences.
Pini concludes: “With competition heating up, streaming services need to adapt and improve their customer engagement based on behavioural data insight. Tracking this data will enable subscription businesses to trigger recommendations based on subscriber taste, or offer personalised playlists, for example – tailoring offerings to enable companies like Spotify to deepen engagement with their users.”