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What we can learn from Netflix’s marketing strategy
An insight into the strategy of the streaming giant
Unless you have been living under a rock for the past few years you will have undoubtedly heard of Netflix. Founded in 1997 in California by 2 friends, the original model was a pay per rent service (later changed to subscription based) for movies which were delivered to your door.
There were no late fees you simply kept the movie for as long as you liked and when you returned it you were able to get another movie of your choice, an idea which came to the founder after receiving a $40 late fee for Apollo 13 which he had rented.
Netflix now offers an on demand streaming service available via the internet, internet TV, Video games consoles amongst other platforms. It has become one of the world’s most successful dot com businesses and as of the second quarter of 2014 there were more than 50 million subscribers globally (Source: Wikipedia) This success wasn’t by chance and there a few lessons which we can take away from the marketing strategy which Netflix has employed over the years.
Use data to make decisions
2007 was a big year for Netflix; they delivered their billionth DVD and then decided to begin to move away from this traditional model by introducing a video streaming service via the internet.
They were able to use the data which they had available to them which showed a drop in DVD sales in 2006 and quickly react with a new business model. This would have been a tough decision for the company which built its business on DVD’s but sometimes a risk is worth taking.
As marketers we should always aim to use the data we have available whether from Google Analytics or any other tool to make important decisions.
Make yourself available to your customers
Getting Netflix content has never been easier. They offer their streaming service across so many platforms and operating systems that the majority of households in their target market will be able to subscribe if they wish.
If we look at this from a marketing perspective, it’s important to find out where your audience is and connect with them. Social channels and having a responsive website which works on mobiles and tablet devices is a prime example of making yourself available to your audience.
Content marketing is key
In 2011 Netflix announced that they were funding the production of a political drama series entitled “House of Cards” With a production budget of $50 million and Hollywood actors starring including Kevin Spacey, Netflix realised the importance of having your own high quality content to gain a competitive advantage.
Netflix are providing a Unique Selling Point to their consumers, just as you should be aiming to create high quality, original content for your audience to engage with.
The main reason I use Netflix is to discover new movies and TV shows that I might like, Netflix makes this extremely easy and even personalises it for me. It remembers what I have watched and actually allows me to rate movies and shows which I have seen.
Based on these ratings Netflix can then recommended other titles which I may enjoy from its vast library. My user experience is improved greatly through this simple feature.
User Experience is crucial when designing and developing your website, the customer must always be at the forefront of your mind throughout the process. This has also been reflected in the new layout changes of Netflix which now boasts a much more visual and interactive experience which feels more engaging for the user.
Give your customers a taster
One of the most successful techniques that Netflix has employed when growing their user base is the use of the 1 month free trial. The 30 days free aims to showcase the high value of the product to people who may be unconvinced about the service. Netflix comes across as confident in the service which it offers which in turn will give users an increased confidence in the product.
The free trial also becomes a powerful marketing tool for Netflix through the use of targeted E-Mails to those who choose not to continue with their service after the trial finishes.
The video streaming service online remains an extremely competitive market place; one which I believe will become more populated in the next few years. Netflix has certainly upped its game with the creation of House of Cards and with a long list of release dates for more original content it’s fair to say that Netflix firmly believes that a content marketing strategy is the way forward for its business.
As marketers we would be advised to keep a keen eye on what they do and how Netflix continue to adapt their marketing plan as time goes on.