Digital Transformation for the Gaming, Console Manufacturer, and Mobile Application Industry - Creating Sustainable Global Success through Digital ...

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Digital Transformation for the Gaming, Console Manufacturer, and Mobile Application Industry - Creating Sustainable Global Success through Digital ...
POINT OF VIEW
POINT OF VIEW                  Gaming, Console Manufacturers and Mobile Applications

Digital Transformation
for the Gaming, Console
Manufacturer, and Mobile
Application Industry
Creating Sustainable Global Success
through Digital Transformation
                                                                                   1
POINT OF VIEW                                                                                                                                     Gaming, Console Manufacturers and Mobile Applications

Introduction

                                                                                                                                                           85%
                                                                              ecosystem in terms of revenue–driven by
                                                                              winning strategies for monetization, retention
The gaming, console manufacturer, and                                         and engagement.2
mobile application industry has undergone
a phenomenal change in the past five years,                                   While the mobile gaming market is poised                                     of mobile app market
dominated by new technology advancements                                      for explosive success over the next few                                      revenue in 2015 was
and the continuous penetration of the internet                                years, console manufacturers and developers                                  generated by games
and smartphones in emerging economies.                                        continue to face challenges with increasing
By 2020, the app economy is forecasted to                                     production costs and the need to adapt to
double in size, reaching an incredible $101                                   new user behavior. Per Newzoo, 87 percent of
billion in revenue.1                                                          console gamers also play on a PC – but PC and
                                                                              mobile are essential devices that people simply
In 2016, the mobile app ecosystem was                                         need in today’s world while consoles are not.
marked by signs of maturity, with notable                                     Although it is the slowest growing segment,
Merger & Acquisition (M&A) and Initial Public                                 the TV console gaming segment remains the
Offering (IPO) activity, as well as significant                               largest with regular new product launches
market shifts. China became the largest                                       from top manufacturers.
country in terms of iOS App Store revenue,
while emerging countries such as India,                                       Another key factor when looking at the app
Indonesia, and Brazil accounted for impressive                                ecosystem is revenue. Usage doesn’t seem
gains. Games generated approximately 85                                       to be affected by regional recessions; strong
percent of mobile applications (apps) market                                  growth seen in Argentina and Brazil in 2015
revenue in 2015, representing a total of $34.8                                supports this theory and is comparable to the
billion across the globe.                                                     stability of the app industry from the 2008-
                                                                              2010 period in mature markets, such as the
As the industry matures, gaming applications                                  U.S. during the economic crisis.
(apps) continue to dominate the app
                                                                              2
                                                                               Venturebeat – Mobile Games, http://venturebeat.com/2016/02/10/mobile-
1
    AppAnnie https://www.appannie.com/                                        games-hit-34-8b-in-2015-taking-85-of-all-app-revenues

Key trends and challenges in the app economy
Trends:
         •     Mobile will enable brand innovation via artificial intelligence, virtual reality, and the
               Internet of Things (IoT)3
         •     IOT apps integrations to continue unchallenged4
         •     Retail banking risk: innovate or get left behind5
         •     Apps security to be more important than ever6
         •     Mobile web and app experience gaps will shrink7
         •     Connected health market poised for growth (from $46 billion in 2017 to $117 billion by 2020)8
Challenges:
         •     Daily Active Users (DAU) and downloads increase, while mature markets including U.S.,
               Japan, Germany see stagnation
         •     Growth in emerging markets, such as India
         •     Monetization and conversion
         •     Usage increase through engagement
         •     User retention
         •     Rapid changes in technology via Augmented Reality (AR) and Virtual Reality (VR)
         •     Regional infrastructure and internet speed

3
  Forbes - https://www.forbes.com/forbes/welcome/?toURL=https://www.forbes.com/sites/forrester/2016/02/03/forrester-mobile-trends/&refURL=&referrer=%20
-%207a45de464fee
4
  BiznessAPPS - https://www.biznessapps.com/blog/mobile-technology-trends/
5
  AppAnnie - https://www.appannie.com/
6
  Global Industry Analysts, Inc. - http://www.strategyr.com/MarketResearch/Mobile_Messaging_Apps_Market_Trends.asp
7
  Forbes - https://www.forbes.com/forbes/welcome/?toURL=https://www.forbes.com/sites/forrester/2016/02/03/forrester-mobile-trends/&refURL=&referrer=%20
-%203115bff44fee
8
  AppAnnie - https://www.appannie.com/

                                                                                                                                                                                                     2
POINT OF VIEW                                                                                     Gaming, Console Manufacturers and Mobile Applications

How can apps and gaming companies leverage        differentiate themselves in an increasingly
the opportunities available globally and cash     competitive marketplace.
in at a faster rate, both in mature markets and
emerging economies?                               1. Customer Experience should
                                                  use all available levers to optimize
This Point of View paper looks at how gaming,
console, and apps companies can harness
                                                  engagement and meet expectations
the power of digital transformation to enable     The optimal customer experience is customer
holistic transformation of their business         centric, focused on the overall journey, and
processes, service delivery models, and           is channel agnostic. Optimized solutions
relationships with business partners to realize   that allow a CRM system to provide a
superior outcomes.                                360-degree view of the customer across their
                                                  entire digital journey, regardless of channel,
Drive transformation across three                 device or interaction type. Enabling process
key areas                                         transformation with the use of Artificial
There are three key areas in which                Intelligence (AI) and automation facilitates
                                                                                                           Sutherland’s solutions
gaming, console manufacturers, and apps           better knowledge management, increasing                  reimagine Customer
companies can harness the power of digital        self-service usage, and adoption.                        Experience
transformation and enable solutions to                                                                     Sutherland’s services help
                                                                                                           dramatically improve the
                                                                                                           customer experience,
                                                                                                           increase retention, reduce
                                                                                                           cost of service, and enhance
SUCCESS STORY
                                                                                                           profitability. Customer
A leading global gaming console                                                                            Experience Transformation
provider enhanced the user experience                                                                      solutions include:
by leveraging Sutherland’s Customer
Experience Transformation Services                                                                         • Omni-Channel customer
                                                                                                             support: email, in-app, chat,
Challenges:                                                                                                  voice, social media, messaging,
                                                                                                             apps, and SMS
    •     Slow adoption, higher costs for
          customer experience                                                                              • Community support: owned
                                                                                                             and 3rd party
    •     Lack of scalable solutions for
                                                                                                           • Tech support, Voice of the
          global expansion
                                                                                                             Customer (VOC), survey
                                                                                                             management, fraud, and
Results with Sutherland:
                                                                                                             payments management
    •     Integration with client systems                                                                  • Game/app translation and
          to provide video chatbots for                                                                      localization
          assisted-service
                                                                                                           • Knowledgebase management
    •     Improved user experience, and
          convenience with introduction of                                                                 • Sales and retention in over
          a mobile interface for self-service                                                                40 languages

                                                                                                           • Customer journey mapping
                                                                                                             and optimization

                                                                                                           • Digital self-service solutions:
Customer experience solutions should be           maximizing the agent experience to increase                avatars, chat bots, dynamic
technology agnostic, using a suite of tools,      productivity. Information collected from every             IVRs
systems and integrations to create a seamless     touch point should be available to agents to
360-degree customer view. Omni-Channel            drive faster resolution times, resulting in higher       • Customer 360-degree
routing of customer interactions should be        customer satisfaction.                                     view solutions with system
facilitated using best-in-class technology,                                                                  integration, analytics,
                                                                                                             platforms, and next best
                                                                                                             actions for end customers

                                                                                                                                                     3
POINT OF VIEW                                                                                                               Gaming, Console Manufacturers and Mobile Applications

Big Data Analytics solutions uncover valuable                                apps/games, while the constant factor that
customer insights regarding purchase                                         eventually leads to lower in-app engagement
behavior, history, preferences, intent, trends,                              and churn is the customer experience.
and patterns; while innovative customer
                                                                             23 percent of all apps installed today are
journey mapping solutions help identify
                                                                             deleted after being used once.10 Given the
where friction happens, the pain points
                                                                             pace at which technology changes, innovation
of each touch point, and how to optimize
                                                                             in customer experience becomes a critical
the customer experience. With such rich
                                                                             business success factor–a core strength to
data and innovative solutions available,
                                                                             generate revenue in the app ecosystem.
it becomes easy to personalize customer
                                                                             User engagement success has become even
experiences across all digital touch points
                                                                             harder and the user journey is no longer
and an enhanced customer experience equals
                                                                             linear–but rather an infinite loop.
greater customer loyalty.9
                                                                             When customer experience is well-
One of Sutherland’s clients–a music streaming
                                                                             designed, engagement becomes a strategy
app company–transformed their contact
                                                                             game, employing best practices, using
centers into digital knowledge hubs where
                                                                             personalization, and segmentation to
Customer Experience (CX) agents deliver
                                                                             constantly show users the value of the
outstanding experiences across email, chat,
                                                                             app/game.
and social media to millions of customers
across the globe in 10+ languages. Powered                                   Proactive engagement connects with users
by business process transformation, this                                     from the beginning of their journey across
engagement-led customer support allowed                                      their lifecycle. Using app reviews and in-app
our client to significantly improve their                                    surveying ensures always-on support and
customer satisfaction, while providing a                                     feedback availability to improve the user
scalable multi-language solution that keeps                                  experience. Integrating VOC—a vital part of
pace with their expansion and growth strategy.                               the engagement and customer experience
                                                                             strategy—collecting user feedback on all
2. Engagement as a Service is a                                              touch points, using analytics to help with user
key driver for building competitive                                          segmentation, and incorporating insights into
advantage                                                                    the development process, will help improve the
Each day, thousands of new apps are                                          current and long-term user experience.
published amongst fierce competition, which                                  Community engagement and moderation
requires considering complex factors for                                     is another challenge for today’s console
choosing a revenue model. One of the biggest                                 manufacturer, gaming, and apps companies:
challenges gaming, console manufacturers,                                    scaling for global markets puts pressure
and mobile application companies face                                        on the engagement strategy and users are
today is decreased engagement for their                                      most engaged when they can communicate
                                                                             with other users in their language, and more

                                                                                                                                     23%
                                                                             specifically within their preferred communities.

                                                                             3. Scale the community reach from
                                                                             owned community to 3rd party
                                                                             communities in global languages to                      of all apps
                                                                             sustain growth and increase revenue                     installed today
                                                                             Building long-lasting relationships through             are deleted after
                                                                             best practices for influencing behavior and             being used once10
                                                                             generating increased brand awareness will
                                                                             result in increasing conversions and longer
                                                                             Customer Lifetime Value (LTV). Adopting
                                                                             practices that worked in one country to
9
 Sutherland Labs - http://www.sutherlandlabs.com/work/designing-a-           all countries will have the opposite effect.
roadmap-to-customer-loyalty/
                                                                             Engagement is an art of localized insights
 Localaytics - http://info.localytics.com/blog/23-of-users-abandon-an-app-
10

after-one-use                                                                and strategy that observe user behavior and

                                                                                                                                                                               4
POINT OF VIEW                                                                                                              Gaming, Console Manufacturers and Mobile Applications

focus on building relationships, which work to          if the customer experience was designed
influence purchases and conversions.                    to align with the targeted users’ behavior
                                                        and expectations, coupled with a top-notch
User engagement is a sustained and localized            customer support program to truly set an
effort to incorporate best practices to create          organization apart from its competitors.
true brand advocates via push/two-way push              The always-on millennial generation, which
notifications, in-app messages, and creating            represents most app users, demands always-on
mini-groups or mini-communities. Adopting               support, always-on engagement, and always-
these best practices will generate results              on personalization.

SUCCESS STORY                                                                                                                       Sutherland increases User
One of the largest mobile game publishers in the world increased engagement by incorporating                                        Engagement, and efficiently
gamer feedback into new game releases with Sutherland Design Thinking and Journey Mapping                                           and effectively scales Global
                                                                                                                                    Communities
Challenges:                                                                                                                         Sutherland’s User Engagement
                                                                                                                                    solutions provide cost-
     •    Extract, analyze, and understand existing users’ feedback for the current version of the game                             efficient scalability to
                                                                                                                                    multi-lingual communities,
     •    Uncover the highest drivers for frustration and dis-engagement                                                            and focus on improving
                                                                                                                                    user engagement. Impact
Results with Sutherland:                                                                                                            retention and conversion
                                                                                                                                    by integrating community
                                                                                                                                    engagement, moderation,
     •    Collected feedback was transformed into actionable insights and recommendations
                                                                                                                                    and VOC management into
                                                                                                                                    the 360-degree view of
     •    Average daily usage and engagement rate was increased, which positively impacted revenue                                  the user journey, and plan
                                                                                                                                    outcomes against strategically
                                                                                                                                    designed user segmentation
                                                                                                                                    engagement strategies.

4. Redefine Monetization and                            equivalents throughout the 90 days following
Retention strategies to increase                        first use and have the highest retention rate of
                                                        any vertical after three months.
engagement and generate revenue
                                                        Analyzing user behavior per operating
Until a few years ago, product marketers
                                                        system (OS) is important. Gaming, console
would focus on new user acquisition and
                                                        manufacturer, and mobile application
securing massive amounts of downloads. As
                                                        companies should dedicate time to understand
the industry matured and competition became
                                                        the differences in user behavior, including how
fiercer than ever in countries like the U.S., UK
                                                        users respond to notifications, messages, and
and Japan–user behavior has changed and
                                                        interact with the app and brand.11
shows a constant demand for engagement
and personalized customer experiences.                  Retention is closely linked to engagement
                                                        and customer experience. The challenge is to
In 2015 the New User Acquisition (NUA) cost
                                                        increase retention, while reducing the cost for
rose by 117 percent, which led companies
                                                        NUA and quickly moving users through the
operating in the app ecosystem to find new
                                                        funnel (adoption rate) from free to purchase/
ways to retain a larger share of existing
                                                        premium is critical. We use design-thinking
customers. In 2016, overall user retention for
                                                        strategies to design, deploy, and manage
the apps industry improved by 36 percent.
                                                        digital customer experiences that result in
But mobile operating systems and devices
                                                        higher engagement and shorter sign-up free-
matter when analyzing retention and new
                                                        purchase/premium funnel conversion times,
user acquisition, with Android apps seeing
                                                        while increasing competitive advantages
higher retention through day 90 compared
to iOS apps. For social and messaging, apps
                                                         Appboy - https://www.appboy.com/blog/app-customer-retention-spring-
                                                        11

on iOS consistently outperform their Android            2016-report/

                                                                                                                                                                              5
POINT OF VIEW                                                                                                                           Gaming, Console Manufacturers and Mobile Applications

through business process optimization and                             a loyalty and rewards program, engagement
digital innovation. Access to competitive                             program, and retention program.
intelligence and market trends is crucial when
                                                                      When it comes to best practices for
creating a market strategy, as key factors that
                                                                      monetization, a great example comes from
are significantly impacting revenue are related
                                                                      Zynga, whose data-driven VIP program
to customer segmentation and behavior
                                                                      focuses on developing, retaining, and
trends intelligence. For example, data shows
                                                                      reactivating VIP customers. VIP agents
that 10 percent of purchases that occur
                                                                      identify specific needs and behaviors to
while a user is in a mobile game account for
                                                                      offer special treatment to their VIP gamers,
90 percent of mobile gaming revenue. This
                                                                      who are identified as the highest revenue
information becomes critical when designing
                                                                      contributor players.

SUCCESS STORY                                                                                                                                    Sutherland’s solutions rethink
                                                                                                                                                 marketing strategies for
A leading technology company needed to understand drivers of customer churn and target “churn                                                    Superior Outcomes
at risk” customers with relevant marketing campaigns
                                                                                                                                                 Sutherland’s Analytics-as-
Challenges:                                                                                                                                      a-Service solutions drive
                                                                                                                                                 smart customer lifecycle
     •     Identify the valuable “churn at risk” customers in each segment and market                                                            management to transform
                                                                                                                                                 marketing campaigns.
                                                                                                                                                 Leverage acquire-retain-
     •     Optimize retention marketing campaign spend
                                                                                                                                                 engage models such as
                                                                                                                                                 lost customer scoring,
     •     Identify the right engagement strategy to retain the highest risk customers                                                           churn-tactic optimization,
                                                                                                                                                 win-back model, customer
Results with Sutherland:                                                                                                                         lifetime value model, lead-
                                                                                                                                                 funnel analytics, acquisition
     •     96 random forecast models developed, which identified key variables influencing customer                                              modeling, campaign
           churn behavior                                                                                                                        optimization, marketing
                                                                                                                                                 mix modeling, customer
     •     Geographic segmentation of 19 global markets uncovered specific target revenue groups                                                 affinity model analytics, and
                                                                                                                                                 customer services powered
     •     Significant decrease in churn was realized using the new model                                                                        by the retention platform.
                                                                                                                                                 Consulting services assist with
                                                                                                                                                 market research and revenue
                                                                                                                                                 model innovation.
What’s Next?                                                          U.S. are shifting from a download growth
                                                                      phase to one of strong growth in app usage
Global mobile app store downloads will reach                          and revenue expansion. Time spent in social,
284 billion in 2020. Much of the growth will be                       shopping, and transportation apps strongly
driven by smartphone adoption in emerging                             suggests that advertising and commerce will                                For more information on how we
markets. Mexico, Brazil, Turkey, Indonesia,                                                                                                      can help you transform your
                                                                      form a significant proportion of economic
China and especially India are poised for                                                                                                        processes, visit us at
                                                                      activity in the app ecosystem beyond the $101                              www.sutherlandglobal.com, email
some of the strongest growth over the next                            billion projected for in store sales.12                                    us at sales@sutherlandglobal.com
five years. This opens a huge opportunity for
                                                                                                                                                 or call 1-800-388-4557 ext. 6123.
developers to target unmet needs and create
                                                                       Mobuzz - http://www.mobuzz.org/wp-content/uploads/2016/11/app-annie-
                                                                      12

whole new markets. Mature markets like the                            02-2016-forecast-en.pdf
                                                                                                                                                 Connect with us

As a process transformation company, Sutherland rethinks and rebuilds processes for the digital age by combining the speed and
insight of design thinking with the scale and accuracy of data analytics. We have been helping customers across industries from
financial services to healthcare, achieve greater agility through transformed and automated customer experiences for over 30 years.
Headquartered in Rochester, N.Y., Sutherland employs thousands of professionals spanning 19 countries around the world.

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