There are a very few businesses in the world that have grown like Netflix. From an old-fashioned DVD rental service to the world’s largest content streaming service, Netflix marketing strategies sure have some great lessons for every business striving to make it big out there.
Reportedly, Netflix’s revenue has grown 183% between 2016 and 2020, coming close to $25 billion by the end of 2020.
Same goes for its subscribers. By 2020, Netflix had crossed 200 million paid subscribers which is more than any other streaming service provider.
That’s some tremendous growth right there and it’s no secret that each entrepreneur envisions the same for their business.
Coincidentally, I am the assistant marketing manager at ProofHub, a project management tool used by teams at Netflix itself. I have been observing Netflix marketing strategies for a long time and wanted to share how every growing business can take inspiration from them.
We have been incorporating the following principles in enabling ProofHub to scale from less than 300 teams in 2012 to over 85,000 teams, individuals and companies by the end of 2020. Follow along!
1. Original Content
Netflix owes a fair share of its success to Netflix Originals.
Netflix understood pretty early that just showcasing movies in HD quality won’t sustain their business. They needed an undeniable edge in the OTT industry, which lead them to release their first original Lilyhammer in 2012.
Although Lilyhammer was canceled, the very next year House of Cards came out, which was a breakout hit. Apparently, the show proved to be instrumental in growing Netflix from a mere On-demand video service to a full-blown production house.
How Original Shows Help Netflix?
Quick question – What is Netflix’s core product – the shows or the streaming platform?
The answer is both.
People tune to Netflix for a great entertainment experience, yes, but if Netflix didn’t have an equally great content collection, the platform would simply have gone obsolete. Something that happened with another OTT platform, Xbox Entertainment Studios.
Therefore, Netflix now produces its own content which helps them
- Create engagement on the platform – Netflix’s most-watched shows and movies are all Netflix Originals
- Create exclusive content that incentivizes users to sign up for a subscription
- Retain active users with a constant supply of new content to watch (13 new shows are lined up for April 2021)
- Build content credibility (35 Netflix titles have been nominated for Oscars 2021)
Netflix’s business pivot is a severe content marketing lesson.
We already know that custom content that is developed with an aim to drive user engagement influences up to 61% of customers.
Moreover, Content Marketing costs 62% less than traditional marketing and generates about 3 times as many leads, reports Demand Metrics.
It raises the question, how can you fit Netflix marketing strategies into your user acquisition plan?
The answer lies in exploration. Today, there are several forms of content that a B2B or B2C business can delve into, each with its own set of goals.
Netflix’s idea of generating original content can be replicated by your business in so many ways. It’s all about understanding your niche, the kind of problems you can solve for your audience, and create guides, articles, blogs, videos, etc on the same.
The motive is to make content the reason why your users give attention to your product or service.
At ProofHub, we were able to acquire some 40,000+ users with the help of content marketing alone.
2. Data-driven Marketing
You might have heard that Netflix collects user data to make shows that are more likely to be watched. But the real story runs several seasons deep.
Netflix is a largely data-driven organization. In this blog post, Neil Patel explains how Netflix gathers several statistics on each video on its platform.
As an example, Netflix knows the location of the users, the moments in the show that users fast forward, and the interface scroll behavior. This data guides them to discern one show’s engagement and success over the others.
How Data-driven Marketing helps Netflix?
You’ll agree that most kinds of marketing efforts are data-driven. It’s not like Netflix is the first one to do so but what they’re doing is one step ahead.
They’re not only looking for which show gets more views. They employ Artificial Intelligence to uncover new dimensions of user behavior, to take strategic marketing decisions.
Neil, in his blog post, refers to an example. Let’s say Netflix finds out a correlation between individual user watch-time and the probability of canceling the subscription.
People who watch less than 15 hours of content in a month are highly likely to cancel their accounts. (hypothetical numbers)
Therefore, Netflix can figure out what shows the users with low watch-time will gravitate to, and start retargeting them. This could be done either by marketing emails, in-app notifications or favorite show prompts. All of which are designed to increase the re-engagement of the user on the platform.
This way, Netflix is reducing the probability of losing paid users. The complex data crunching required to make this happen is carried out by AI and ML algorithms.
Netflix is increasing profitability by taking its data seriously. Your business can also do the same by setting up a strong data culture. When you sit down to draft the marketing plan for the month, ensure that your POA is backed by statistics.
Figure out user problems, and design campaigns that solve them. It might also mean that you’d need to train your employees with data science skills. Because till the time you’d not understand your audiences and their interaction with your product, you’ll not be able to market it well.
3. Multi-platform Integration
Netflix show Patriot Act streams not only on the Netflix website but also on YouTube and Instagram. On YouTube, you’ll even find full-length shows of Patriot Act.
This means that Netflix shows, at least some of them, can be watched without signing up for the service. You’ll get a good taste of the actual content and you’ll know what you’ll get if you sign up.
On Instagram, the content is uploaded in bite-sized IGTV videos that act as teasers.
How multi-platform integration helps Netflix?
At first, it seems antithetical to revenue generation, but it’s a smart thing to do. Netflix has about 5,000 titles available to the US audience. Letting one stream for free won’t harm their business.
Netflix’s YouTube channel has 2+ million subscribers, while their IGTV videos garner up to 100k views.
Therefore, they don’t have to invest a fortune in promoting a new show. Their social presence does it for them.
In addition, Patriot Act is a social awareness show. It not only brings potential paid sign-ups for Netflix but also builds social goodwill with the viewership.
The important lesson to learn here is – strategic content sharing. There’s no point in keeping your content exclusive to your web properties. Publish it on platforms that have a larger user base, and piggyback on the engagement hence generated.
Your business can even start generating content that specifically targets a social media platform. You can delve into video content for YouTube, create informational content for IGTV or simply distribute guest posts. The business value associated with shared content will find its way back to you, in one way or the other.
4. Don’t be afraid to Pivot
By the end of 2020, Netflix had about 4.6 million paid subscribers in India. Clearly, it’s a growing market for the OTT giant but something interesting recently happened for the Indian Netflix-ers.
Netflix launched a mobile-only plan for India which is 60% cheaper than the cheapest plan available in the country. The plan costs 199 INR or $2.72 per month. This was done owing to the large-scale consumption of content on mobile devices in the country.
In fact, the market share of mobile devices in India is around 76% whereas it’s only 22% for desktops. Therefore, the takers for a mobile-only plan, at least in theory, were quite a lot.
How pivoting their pricing model helped Netflix?
Netflix’s idea of pivoting the pricing plan was a huge success. The Chief Product Officer at Netflix, Gregory K Peters told India Today that the plan outperformed their expectations.
Netflix has increased their user base in India and have been able to ramp up revenue. It’s believed that similar Netflix Marketing Strategies will be tried in other global markets as well.
Netflix could have gone with its standard 499/- plan but it saw an opportunity in India’s massive smartphone domination.
They decided to make a strategic pivot in order to make use of the opportunity which turned out well for them. The key is to stay on top of the user data and market data, to derive strategies that could push your marketing efforts towards success.
Similarly, you can look for opportunities in your target audiences and try to pivot your ideas to better suit them. Making such radical shifts in your pricing model requires testing and validation but the important point is to have the courage to pivot.
It’s not the only pivot that Netflix marketing strategies have executed, their initial idea of letting go of the DVD rental service was the first in many.
5. Email Marketing
Netflix is easily one of the smartest email marketers out there. If you’ve been a subscriber, you’d know what I am talking about. Below, I have dissected Netflix’s marketing emails for greater clarity.
Join Back Emails
You’ll notice that in most of these emails, there’s no pomp and show. The emails are clear, concise and have a bold red CTA, that is easy to notice.
But despite that, the key ingredients of a converting email are still there. Each email has;
- A quirky subject line to boost Email Open Rate
- Content personalization to improve Relevance
- Clean HTML design to improve Readability
- A bold CTA button with Click Through Rate
- Segmented campaigns for detailed Targeting
How Email Marketing helps Netflix?
Unlike generic marketing emails that try to sell a singular offer to the subscribers, Netflix marketing strategies use email for multiple things.
On a whole, they’re using emails for;
- Engaging current users with show recommendations
- Bringing back lost users with new offers and shows
- Increasing watch time for users with low activity on the platform
- Making new release announcements
Most of these emails are hyperpersonalized, which means they will carry content based on your watch history. You will be suggested shows that you’re probable to watch, both in marketing and transactional emails.
The three biggest takeaways from Netflix’s emails are;
- Deep segmentation
- Clean email design
Segmentation helps you cater to user journeys and make it easier for the users to convert.
Hyperpersonalization makes the email highly relevant to the user. If they liked watching “Iron Man 3”, they might want to check out “Infinity War: End Game”
Clean email design makes it easier for the user to skim through the email, and not deviate away due to cluttered information. It’s the single most important thing that email marketers forget to work on.
By incorporating these email lessons in your campaign, you stand a chance to make better sales, and bring in more revenue at unmatchable ROI.
We have talked about everything from content marketing to email retargeting that has helped Netflix build a business empire. You can take inspiration from these Netflix marketing strategies and start implementing in your business, to scale it with the same vigour and energy.
Being an internet company, Netflix has the data advantage over traditional entertainment platforms. The marketing teams have used the same with brilliance, and now that you know what they did, you can too!