Previously, we delved into the business model of Netflix. This time, we will take a deep dive into the Marketing Strategy of Netflix.
For the Netflix marketing strategy (CRO) case study, the students at IIDE explored the company’s present digital marketing strategy and identified the problem areas in which the company can benefit from implementing certain changes and coming up with practical solutions.
Netflix is the renowned streaming giant that everyone today is aware of. Netflix has carved its mark in the history of OTT streaming platforms and is continuing to grow every day. Let’s dive into a brief history of Netflix to know how they achieved this success.
About Netflix
Netflix is one of the world’s leading entertainment services with 214 million paid memberships in over 190 countries enjoying TV series, documentaries, feature films and mobile games across a wide variety of genres and languages. Members can watch as much as they want, anytime, anywhere, on any internet-connected screen. Members can play, pause and resume watching, all without commercials or commitments.
The company announced on January 2, 2016, that they added 130 more countries to a list that already had 60 in which they offered their services, including India. India was fairly new to this type of service and the country also had low broadband penetration and infrastructure problems, meaning lower quality videos depending on what device the consumer was using.
Netflix took all of this into consideration and moved forward to penetrate the Indian market.
The main problem Netflix initially had in India was the Internet penetration and speed. Netflix’s main goal was to have its consumers easily stream the content available. They also did not have a great selection of Indian content compared to the content of other companies. But along with time, the brand learnt to work with what the demand was implementing several changes one of which is the smart AI feature which helped the brand outgrow its competitors.
Now that we have a brief idea about Netflix, let’s dive into the actual case study, Research and Analysis.
Competitor Analysis of Netflix- War of the Brands
According, the competitor analysis we see that Netflix is in a cut-throat competition with Prime Video, followed by Hotstar. The “other category” in the infographic includes other third-party platforms like Youtube. Many studies show that Youtube is one of the major competitors to Netflix.
When compared with Prime Video, we see that Amazon has more footfalls on its landing page – with better domain authority and backlinks. Hence, Netflix can benefit from improving its Search Engine Optimisation tactics.
Another thing that we noticed while analysing was the bounce rate, the bounce rate of Prime Video was higher than that of Netflix. This is an indicator of the better AI and UI/UX of Netflix.
History of Netflix
The company has been in the market since 1989 – when it used to sell rentable DVDs and was called Blockbuster. Now, it is the biggest OTT platform, with an average yearly user base of 209 crores, which is almost the entire population of Vietnam.
Netflix has an amazing retention rate due to their amazing product strategy. Churn rate is the percentage rate at which customers start unsubscribing to the service. So, the lesser the better.
Its free trial was loved by everyone – 93% of the total number of people who subscribed to their free service trial ended up subscribing to the service. Currently, Netflix has stopped the free trial feature. In such a hyper-competitive market, Netflix should start the feature again since it had such a great conversion rate.
Target Audience of Netflix – Buyer Persona
Netflix’s initial target market was young tech-savvy users and has now expanded to nearly any with a digital connection. To understand the target audience of the company more intimately, the student team has used the Buyer Persona tool to get a clearer picture.
The first persona is Nidhi Sharma. She is 23 and is a cinephile. She watches everything new and trending. She has recently started working and is always juggling to find time between her commute to work to watch her favourite shows.
Her biggest pain point is that she forgets the shows her friends recommend and ultimately misses on those shows.
The next buyer persona is Anusha Tyagi, She’s a 19-year-old college-going student, and is an Instagram addict, she loves to watch reels and use Snapchat.
The biggest pain point for Anusha is that she loves to watch shows in foreign languages and loves Anime and Kdrama. She wants an accessible platform where she can find such shows.
Marketing Strategy of Netflix
Netflix is already well established for its marketing game, from hosting and promotions of top blockbuster shows to collaborations with the biggest influences the brand knows to play its card right. Here’s a rundown of what the current marketing strategies of the brand are.
Homepage/Landing Page Analysis of Netflix
The homepage/ landing page of the brand where new or recurring users come to purchase or renew their packs. The things that make Netflix stand out from other brands are as follows:-
- Simple to the point landing page with only a single option for users to fill in their emails, and a clear CTA button in red to entice the user’s eyes and get them to sign up.
- A glimpse of all the top trending shows as a background image to attract attention to the trending shows and movies that Netflix has to offer.
- Crisp and clear communication of the company’s purchase and cancellation policies.
- The only objective that this page looks to achieve is to get the visitors email id – which helps in achieving better conversion rates.
- The bottom of the page does the same. It attracts users with the features available to a Netflix subscriber. Our suggestion here is to add a CTA button here as well, which would help the brand convert more visitors to paid subscribers.
Netflix Pricing Strategy
As the premier OTT platform, Netflix follows a monthly subscription model, providing differentiation in accordance with the quality of streaming and number of screens. They have perfected their subscription model by taking the following measures.
- A great thing that the brand implements is to keep the entire process as simple as possible, In just 3 simple steps
- Post step one of inputting their mails the brand takes the user to the pricing package page
- We observed that the brand puts its USP at every stage of the signup process to entice the user to sign up
- After the plan selection, Netflix takes the user to the secured payments page wherein the USPs are mentioned, once the details are filled the user subscription/renewal purchase process ends.
Netflix Email Strategy
Email marketing is one of the most effective and cost-saving methods of communicating with your customers. Netflix understands that well and currently uses automated emails to follow up on incomplete payments as follows:
- If a user has left the signup process incomplete Netflix instantly sends them a reminder email after a few hours to a day to complete the purchase process.
- The brand makes it easier for the user to click on the button with the CTA of finish signup and be taken straight to the completion process.
- The brand pushes its USPs in the mail.
- The brand makes it easier for the user by adding a payments gateway button CTAs, wherein the user is directly taken to the payments gateway to complete the process.
- The tone of communication changes a bit here and the copy is a bit quirky.
- A glimpse of trending shows is shown in the background.
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