Previously, we delved into the business model of Netflix. This time, we will take a deep dive into the Marketing Strategy of Netflix.
This case study is implemented from the research, analysis, and solutions of the student team from the Post-Graduation Programme in Digital Marketing, consisting of Nikhita Mendonca, Niyati Trivedi, Nandita Bhati.
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.
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.
- Once a previously subscribed user has cancelled their subscription the brand sends them an email reminding them to rejoin.
- The brand shows the popular shows that are trending on the app. The communication is personal with the first name mentioned and simple to the point.
- The brand occasionally sends out emails reminding users to watch the new launches with a brief description of the show and the genre. Once clicked the user is directed to the app.
- Netflix keeps its current subscribed users updated by sending out regular reminder emails of new movies and series launched
- The brand tends to use emojis to attract attention, the tone is simple
- Netflix gives its users an option of being redirected to the app directly from their email with just a click of a button
- A noteworthy concept to speak about is how the brand has innovatively come up with a rating feature in their mails, The users can directly vote if they liked or disliked a show they watched in the mail itself.
- Netflix also gives users suggestions to watch similar content based on their watch history.
Remarketing Strategy of Netflix
When it comes to remarketing to users Netflix tends to focus more on its competitor website Youtube as it is one of the largest streaming video platforms where people consume various genres of content for free.
Through our research we found out that Netflix does not run SEM ads on competitor keywords nor does it do much of social media ads. We came across two remarketing youtube ads promoting the Rs199/- pack and the other promoting a new movie that was just launched right after we bounced off from the signup page.
- This is the first skippable ad we came across on Netflix’s competitor website Youtube, The brand here is promoting its Rs199/- per month package
- As the 199 per month pack is a new launch of Netflix the brand is seen promoting it to a great extent as it would help them get more users to signup
- We were also shown another skippable ad from Netflix on Youtube. Here the brand is seen promoting their new movie which was soon to be launched
- We also came across a banner ad on Youtube for the same promotion where the user once clicked would be redirected to the signup page
- Netflix keeps its users updated on what’s new by sending regular app notifications from time to time
- Netflix also is seen giving suggestions to users who are confused about what to watch, This action is seen when the user bounces off the app regularly without watching anything or scrolling for a specific period
- The brand also updates its users by push notifications on new episodes, returning series, or coming soon shows/movies
- Another great feature seen is that the brand allows users to rate a show they watched through the medium of push notifications.
- The tone used in the communication of push notifications tends to be casual and sometimes quirky
Influencer Marketing Strategy of Netflix
Netflix has a strong grasp on the zeitgeist and it employs influencers, both local and international to its advantage flawlessly.
- A major part of Netflix’s promotions or publicity is its collaborations with top influencers or celebrities. Netflix does not spend much on running ads as their collaborations with influential personalities make up for a huge part of their marketing and promotion. As Netflix’s main TG is part of the following of such influential personalities on social media platforms such as Youtube, Instagram, Facebook, Twitter the brand successfully market its content to its desired audience by collaborations with such influential personalities
- Netflix also pays keen attention not just to its Hindi/English-speaking crowd but also to those who prefer watching content in other regional languages. The brand has its regional page where regional influencers and celebrities are seen promoting such content
Netflix App Analysis
The main product or front of Netflix is its application, through which all the users interact with the movies they provide. It is the most important part of their business model as well as a marketing strategy.
- Netflix doesn’t rank for the hottest keywords such as free, Amazon Prime Video, Hotstar, Hulu, movies app, Prime Video, We TV, Zee 5 etc.
- It should consider running ads for these keywords on Playstore & Appstore as well as try and rank for these keywords which will increase the install rate.
Student Solutions – Improving Netflix’s Digital Marketing Strategy
Currently, Netflix runs a great digital marketing strategy. Our student team has analysed every aspect of their strategy and concluded that Netflix can take their marketing to another level by focusing on CRO or Conversion Rate Optimization. CRO is a growing field as many companies have already adopted digital marketing are now looking to increase their efficiency online, if you are interested to learn more head on over to IIDE’s latest Conversion Rate Optimization Course.
To help the company convert more and increase its conversion rates, the student team has suggested the following actions to help achieve that goal.
Email Marketing Automated Journeys
Email Automation is one of the latest techniques that help companies make personalised yet automatic communication with their users to convert them or retain them with appropriate messaging. Email Marketing is all the rage right now, with big companies looking for experts in automated emailing. To learn more head on over to IIDE’s Email Marketing Course.
The student team has divided their email journeys into two:
1. Sign up Journey
- The users will receive the sign-up email when they engage with the story, ads, chatbot, or whenever there is a new sign-in from a new device.
- The user will get 3 sign-up emails & a total time block of the entire journey will be 7 days. As they complete signing-up they will receive a thank you email.
- Both the emails have clear & crisp CTA which will directly lead the user to the app
2. Retention Journey
After the user’s subscriptions end, Netflix sends them emails to resubscribe. They do not make use of enough push notifications for resubscribing.
The student team recommends they send more push notifications for resubscribing/updating payment, which will increase the retention rate subscription. They’ve made an automated journey through WebEngage, which sends emails as well as more push notifications aiming to increase the retention rate.
The copy involves the images of the shows that users get to access once they make the payment. The copy has crisp & clear CTA which says Rejoin @ 199. We have tried to create a ‘FOMO’ among the users.
Application Store Optimization
Netflix’s app can be further used to deepen its marketing impact by providing activity and behaviour specific changes to its various elements. ASO or App Store Optimization is a highly in-demand skill for marketers as the future of all products is going to be application-based. If you are interested in learning ASO, you should check out IIDE’s App Store Optimization Course for more details.
The student team has suggested the following changes:
Landing Page Optimization
Netflix has a static image on its website, instead of this, the team suggests usage of short videos/trailers to let users know which movies & shows they’ll get to watch once they sign in.
This will entice the users & improve the number of subscriptions.
Though Netflix has introduced a few great features like ‘Games’ & ‘Fast laughs’, we share some suggestions which will help Netflix improve its conversion rate.
- As we dug deeper into our research, we found these reviews from Playstore & Appstore, where users have demanded a feature of reviews to be added on Netflix, which will help users to decide which TV shows, movies, documentaries should they watch.
- Netflix should consider adding this feature as this is what people demand, besides it will also reduce the bounce rate of the app.
Taking a little inspiration from the competitors, Netflix should consider adding the feature of ‘review’, but to make it even more interesting we suggest making the feature more personalised. Maintaining the company’s presence digitally has become very important as everyone looks for reviews online. With the changing way of word of mouth, ORM has become increasingly relevant. If you wish to learn the topic, head on over the IIDE’s Online Reputation Management Course for more details.
Where users can comment on what they liked or disliked about the show or the movie.
Another recommendation for Netflix is to take personalisation to another level by making specific categories of shows and movies for different events such as ‘Date Night’, ‘Disney favs’ which would give users a list of content that they can watch from.
To make it more interesting and engaging, we suggest Netflix include a feature that allows the users to share their watchlists and share their suggestions with their friends.
There should be an option to ‘share’ directly on the app, where users can share a watchlist with friends by sending them via text message, email, or social media or simply copying the link.
This will seem more appealing and thus improve our conversion rate.
Adding to the point mentioned earlier, here people can be friends and can see what content their friends and watching and liking, it would help them discover new content and would be able to spend more time on the app.
Personalised Push – Notifications
After you have become friends, the person would get a personalised notification from Netflix, about what their friends are watching and liking. This would be intriguing, and they would be “pushed” more towards the app.
Snapchat Ads –
Netflix has done lenses on Snapchat, so why not an ad? Netflix is already majorly present on Instagram, hence we suggest them to be present on Snapchat as it will help Netflix to cater to a younger audience.
Conversational Chatbot –
The student team has made a conversational chatbot, named PHIL, which comes from the word cinephile. that will help Netflix gain more leads. This chatbot will later assist with remarketing campaigns and increase in-app functionality and intractability.
Netflix does not have any chatbot right now, and its current pop-up is only when someone is signing out. We suggest a chatbot on the landing page, which is crisp and clear.
Using multichannel marketing, Netflix can do remarketing via the following channels:
- Chatbot – we will get leads via chatbots and remarket the same people, according to their specific interests
- Youtube – Netflix already does a lot of youtube ads, and we suggest the same for remarketing
- Instagram/ Reel – We suggest remarketing via Instagram stories and reels since they don’t do such ads currently.
Instagram Stories and Reels
We also created a reel ad/story ad for Netflix, since they do not do any ads at the moment. This also adds to Netflix’s “cool and trendy” aura. We feel that reels and story ads on trendy music is a must for a brand like Netflix and fits exactly with the mood board of the brand.
Currently, when someone subscribes to Netflix, Netflix only requires one email, but there are a minimum of 3 other profiles that are created that is used by family, friends and friends of friends, what our students suggest Netflix do is keep the login process to be the same but when someone is setting up these other profiles for the first time except for the primary email, ask the users to enter email for the other profiles. This data will be helpful for marketers in many ways and can be used to market better in the future.
Netflix is a unique, well-established company in a country like India. It has so far understood its target audience well and positioned itself accordingly. Their current marketing strategy is clearly at par for a brand of its reputation and size.
After extensively researching and inspecting their digital marketing strategy- which already was very impressive- with our provided solutions and suggestions it would help take the brand further to the next level by improving Netflix’s conversion rates.
Using digital marketing as a medium to promote themselves is an excellent way to grow their customer base. With the advent of technology, the world today has seen growth in the field of digital marketing. If you are interested to know more about this field and wish to upskill yourself, check out the 3 Months Advanced Digital Marketing course to know more.
We hope this blog on the Marketing Strategy of Netflix has given you a good insight into how the company went from a once failing business to the world’s largest streaming platform for movies and shows.
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