How Comcast is Using Gated Offers to Beat the Subscriber Game

August 14, 2018

Tony Coray

College students use SheerID's Digital Verification Platform to redeem a gated student offer for 25% off Xfinity TV bundled with an internet package.

Our nation is becoming a subscription-based economy. Americans spend an average of $857 a month on subscriptions – from cell phone plans and gym memberships, to streaming media and box subscriptions.

While there are many types of subscription services, all of them are trying to solve the same problem: How do I acquire and retain more subscribers?

Acquiring Subscribers is an Uphill Battle that Everyone’s Fighting

Whether you’re as big as Comcast or as niche as curlBOX, every subscription-based business faces the same challenges.

How do I differentiate? As the market quickly becomes saturated, competition is fierce and differentiation is difficult. There are plenty of options to choose from – media, clothing, dating, gyms – but who needs more than one of each?
How do I get people to try it out? Conversion is difficult for subscription businesses. According to a McKinsey report, only 53% of consumers are aware of top subscription services, such as Blue Apron and Stitch Fix, and only 13% actually sign-up. Buyers are reluctant to commit for a number of reasons. They’re concerned that once they sign up, they won’t use the service enough, or that they’ll forget about it over time, or that cancelling will be hard. Or they’re simply afraid they’ll lose interest when they tire of the programming, the menu, the clothing, or the available singles on the dating site.
How do I keep the customers who do sign up? Creating stickiness is tricky business. A free trial or steep initial discount may entice people, but unless they’re convinced of the long-term value, they’ll cancel.

The path to addressing these challenges is simple — just follow the lead of Comcast.

Use Gated Offers to Acquire Students

Earlier this month, Comcast launched an exclusive gated offer for college students – a whopping 25% off Xfinity TV bundled with an Internet package.

College students have become an ideal segment for Comcast to target, especially as television habits shift. Sixty-one percent of young adults ages 18 to 29 report that the primary way they watch television is with streaming services on the Internet.

A young woman watches a streaming media service she subscribed to with a gated student offer for college students.

Comcast made redeeming the offer very user-friendly. College students enter minimal information into a verification form and their status is instantly verified. And Comcast’s timing is perfect. Deloitte estimates a summer total of $46 billion in back-to-college spending, and according to Bazaarvoice, only 45% of back-to-school shopping has been completed by early August.

Also, knowing the discount will remain in effect for as long as they maintain their status (e.g. college student) serves as a highly motivating reason for buyers to push through their fear of signing up.

And enduring discounts reassure subscribers that the value will remain high, which means they’ll be less likely to churn.

Gated Offers for Students Seed Lifetime Subscribers

By making services available to college students at a deep discount, Comcast is not only gaining new customers today, but nurturing brand loyalty that will cultivate the next generation of subscribers. A leading music streaming service converts 98% of their student discount customers to full-price customers after graduation.

98% of student discount customers of a leading music streaming service convert to full price after graduation.

Gated Offers Attract High Value Customers

Gated offers give subscription-based companies the opportunity to target rich customer segments.

There are 180 million college students worldwide with $523B in spending power. They’re a prime audience for streaming media and online dating services.
There are six million teachers in the U.S. And according to our recent teacher survey, 88% say they actively search for exclusive teacher discounts for both classroom supplies and personal items. Boxed subscriptions like Stitch Fix, FabFitFun, Birchbox and Teacher’s Crate align well with this group.
95% of members of the military say they are more likely to shop at a company that offers a military discount. For this customer group – totaling 34 million people with $1 trillion in buying power – gym memberships, box subscriptions that support active service members, and services like T-Mobile that offer value to the whole family are good fits.
There are 109 million seniors in the U.S. with $3.2 trillion in purchasing power. For a demographic that’s more digitally savvy than most people think, subscription services like Ancestry.com and the New York Times will continue to be popular.

Verify Eligible Customers with Digital Verification

SheerID’s Digital Verification Platform gives Comcast the freedom to widely promote their gated offer because it verifies every buyer’s eligibility to receive it. Verification occurs as a seamless part of an in-brand experience, and ensures only college students can redeem the offer. The process is 100% secure, using authoritative data sources that are backed up by document review if necessary.

Not only does digital verification protect margins (in some cases, companies find discount abuse reaching as high as 35%), but it increases conversions as much as 3x. And SheerID enables a global reach. The platform can verify 180+ million U.S. and international college students in 106 countries.