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September 23, 2005

A perspective on consumer loyalty

Filed under: General — Dr Bill @ 9:27 am

In today’s market the largest component of our paying consumer base is transient. They believe there is more bang for the buck by moving around. Why? Because, they know even good sites deliver small weekly updates. It’s not practical to hang out month after month for a trickle of new content. Better is to return every few months and enjoy all the updates that have accumulated. This consumer typically maintains a list of favorite sites, and makes the rounds while occasionally trying something new. So what does it take to get on this consumer’s favorite list?

Think about your experience with mainstream movie theaters. Sure, what’s playing is an important consideration, but so is the experience. The newer theaters offer nicer seats, a better view, and stunning audio. Theater owners know this makes a difference in attracting REPEAT business. If you are deciding between two different movies, one showing in an older theater, the other in a modern venue, its entirely likely the newer theater will get your business.

When you know the consumer has a choice, and he/she will exercise that choice, it’s in your best interest to make sure each and every experience is a good one. Using the movie theater as an analogy, I don’t care how good the movie was, the popcorn better be fresh, the theater better be clean and comfortable, and the staff better be friendly and attentive. Otherwise it will be a cold day in hell before I plunk down my $7.50 at your movie house!

Then there are those customers that hang on month after month. Contrary to what many site owners believe, it’s not for the weekly updates. This consumer’s loyalty is most often driven by convenience and safety. It’s a place to hang out at. It offers a lot of content that meets that individual’s interests. There are no games being played, the customer service is good, and loyalty discounts are obtainable. The site is dependable, trouble free, and easy to navigate. Basically it’s the prepaid destination for a twenty-minute jack off.

Model fixation also drives long-term memberships. Single model sites, and sites that offer live, interactive, shows are good examples. You would be amazed at how sticky VS Media is! But these are not your typical pay sites. Granted, many sites offer plug-ins that deliver the live shows. Problem is, many sites offer the same plug-in, so it has less stickiness value.

What does all this tell you? Well, if you step back and look at the big picture, frequency and volume of updates has little to do with consumer loyalty. It’s the membership experience that garners repeat business, be it from long-term members or transient consumers.

From a cost-benefit perspective, spending a lot on updates really doesn’t deliver the returns you might expect. Also, and this is very important, your cost of acquisition can be way off if you don’t factor out the transient consumer. Thus, if you are paying for traffic, you need to subtract the repeat business of the transient consumer. Otherwise your cost of acquisition may look very low.

In my experience, a lot of pay sites do not place enough value on the transient consumer. In fact, they tend to be a bit annoyed by them. There is nothing more frustrating than watching someone sign up and then immediately cancel. And this often translates into poor customer service. BIG mistake!


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