Credit from Matt Duczeminski
You’ve heard of Netflix, right?
With 58 million subscribers in the US alone, there’s about a one-in-six chance that you have an account yourself (without even taking into consideration those who use their friend’s accounts).
The content streaming company is the champion of the streaming world: as of last year, 51% of US consumers use Netflix as their go-to streaming choice.
Netflix Disrupts the Video Rental Industry
Netflix evolution from mail-order service to online video-on-demand brand. For consumers, the transition was pretty smooth. For the company, the shift was a serious gamble; Netflix’s new streaming video venture would operate in direct competition with its tried-and-true DVD rental service, leading to a massive drop in mail-order subscribers. In Q3 2011, mail-order subscriber numbers were over 14 million; by Q3 2015, they were down to 5 million.
But over this same period, Netflix’s revenue shot up from $3.2 billion to $6.7 billion. As the company brought in fistfuls of cash from new subscribers, it reinvested the vast majority of this income back into the business as it shifted its focus to streaming. The brand’s profit margin has hit record numbers as of late – so the gamble obviously paid off big-time.
A Major Focus on Customer Data
Netflix uses its data – both broad, high-level numbers, and specific, granular information – to inform almost every business decision. Let’s start off where Netflix’s use of customer data is most evident: the system’s ability to provide personalized movie suggestions to its users.
Many users might assume that Netflix offers suggestions based on rudimentary data points, such as genres watched, viewer ratings, and so on.
Among many other pieces of data, Netflix collects info regarding:
When viewers pause, rewind, or fast-forward
Completion rates for all content viewed
Logisticals such as the device used, time of day, and current location
Ensuring Authenticity Throughout Customer Relations
In today’s media ecosystem, brand authenticity is key. Netflix’s marketing team understands its core demographic well enough to speak their language. Scrolling through Netflix’s social media posts feels like a conversation you’d have with a friend – light-hearted and relatable.
By approaching customers from a place of scientific insight yet in a down-to-earth manner, Netflix manages to stay true to its audience – and its brand voice.
Content Marketing – Marketing Content
Can you guess how the company originally marketed its new original content?
Netflix took a different route when promoting its original series Orange is the New Black. With the cooperation of the New York Times, Netflix created a native ad in the form of a paid post examining female incarceration in the United States.
An Omnichannel Omnipresence
While multichannel marketing can lead to major publicity and awareness, it’s not the end-all-be-all and Netflix knows this. The company focuses heavily on providing an omnichannel experience to its customers as well.
In addition to actively engaging with its audience on social media, Netflix also reaches out to its customers through email and push notifications – and fans love it.
Wrapping Up
Netflix’s rise to dominance wasn’t due to sheer luck. The brand approaches every business decision strategically – be it developing new content, a new marketing campaign, or otherwise – focusing on how customers will benefit.
Perhaps the most important lesson to take away from Netflix’s success story is that innovation and evolution are the keys to longevity in the business world. Had the company not evolved into a digital on-demand provider and continued focusing on its mail-order services, there’s little chance it would have transformed into the powerhouse it is today.
No matter your industry, your customers’ needs will evolve over time. Rather than letting them outgrow your company, grow your company with them. It’s the difference between becoming a Netflix… and staying a Blockbuster.
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