As indicated by Statista, Netflix counts now more than 222 million paid subscribers and has turned into the largest streaming service on the planet.
Have a look at their numbers below, what an an astonishing achievement!
- Netflix free trial has a 93% conversion rate.
- Netflix revenue is still growing (see bellow)
With the success of Netflix, a lot of companies like Amazon and HBO have tried to develop similar streaming platforms but they didn't they reach the same level of success. How did Netflix managed to keep its first position against new competitors? The secret is personalisation. The whole Netflix strategy is defined on a large scale of personalised content with the help of AI technology.
In this article, I will give you some marketing technics employed by Netflix to personalise their content. You should be able to apply them to your online business wether you are a freelancer, start-up, agency or enterprise.
Personalisation is the art of tailoring a customer experience based on data a company has collected about an individual.
It make your engagement more relevant or unique at the individual customer level. Knowing that, Netflix send highly contextualised communications to specific customers at the right place and time, and through the right channel.
Netflix hyper personalisation strategy has been a pillar of customer retention - “80% of watched content is based on algorithmic recommendations”, Netflix.
According to a study from Deloitte, “Personalised marketing provides the opportunity for organisations to meaningfully engage customers, deepen existing relationships and build new ones, and improve the customer experience. Implementing this type of strategy not only increases customer satisfaction but also drives brand loyalty, willingness to spend, and overall marketing effectiveness.”
Everyone seems to say that personalisation is key to success and the stats seem to support this idea, but it’s not that simple!
To put it in a nutshell, start gathering information from your customers already during the sign up process. It will improve their shopping experience on your website especially by providing them the most relevant service or product as early on.
About 63% of digital marketing leaders said they still struggle with personalisation, consulting firm Gartner found in a survey of 350 executives.
It can be challenging to create a real personalised experience for every customer. Not only filtering through a huge amount of data to find relevant information is a complex process, but also outdated or incorrect data results in unsatisfactory experiences that drive users off.
It has become really difficult to track and make sense of the data coming from a all over the places such as Facebook, Twitter, Youtube, Instagram etc. And once this data is sorted, how can we make sure that this is the right moment to use it or the right channel?
There are some common personalisation challenges that can sometimes stand in your way. In this post, I will give you some examples on how Netflix deals with these obstacles and offers the best personalised experience to his customers.
The customer personalised experience starts really early when you create your Netflix account. A payment page will suggest you to select between 3 different plans with 3 levels of resolution.
Then, Netflix starts collecting data on your preferences by asking you to choose three titles that you like among a large selection of movies and series.
and boom! Netflix is now able to recommend relevant programs for you to enjoy.
Showing involvement in customers life is essential for Netfix. The company has found an easy way to do that by sending notifications about what really matter for the customer. As a friend would send a message, Netflix is able to alert about the new season of your favourite series.
Not only Netflix tracks which TV show you are looking at, but also how long and when you are actually watching at it.
They know exactly when you are willing to watch movies and when you prefer not to be disturb.
Sending personalised notifications or emails is a great tip to win loyalty from your customers. You need to make sure these alerts are not random and occur at the right moment for the right customer. It is also really important to have a multi-channel approach (tablet, mobile phone, laptop) in order to reach a large number of users.
A good example of personalised content would be Netflix personalised thumbnails.
Maybe you've noticed that the thumbnail artwork often changes on your homepage.
Netflix creates a multitude of thumbnails for every shows and proceeds to show you the one that has the highest chance of getting your attention.
A Netflix user will browse the app for 90 seconds and leave if they find nothing. Thumbnail artwork is actually Netflix's most effective lever to influence a viewer's choice. A user will look at one for only 1.8 seconds, so Netflix spends huge to optimize them.” (Trung Phan, Bloomberg Opinion)
The streaming giant puts a lot of effort into its algorithm to be able to guess what you probably want to see depending on mood they think you're in.
See bellow an example with the show Stranger things:
“In this example, the Netflix algorithm looks at your viewing habits. Do you watch a lot of romantic comedies? Great, Netflix will show you a Stranger Things thumbnail with Joyce (Winona Ryder) and Hopper (David Harbour). Do you watch a lot of comedies? Great, you’ll see a Stranger Things thumbnail with the kids dressed up as Ghostbusters. If, for example, you recently watched a movie starring Uma Thurman, you’ll see a Pulp Fiction thumbnail featuring Uma. Did you watch Grease or Urban Cowboy in the last weeks or months? Your Pulp Fiction thumbnail will center on John Travolta instead.”
If we take a closer look at an e-com business, the right thing to do would be displaying different features of your product depending on the characteristics of your audience. Based on your customer information (gender and location for example), you would be able to change the thumbnail in order to enhance the user experience significantly.
For an ebook online company, it would make more sense displaying “Naruto” for a young boy or an ebook in Spanish if you live in Spain.
I am sure you have already found yourself getting overwhelmed when choosing a movies and then ended up at making a really poor choice. You are not the only one!
Having the most personalised homepage has become one of the most important challenge for Netflix. The real challenge is finding the right balance between not overwhelming the user and proposing enough shows to be sure you find something you like.
On the Netflix homepage, the algorithm ranks the titles that you would probably enjoy depending on your viewing history, other members with similar tastes… but it is not only that!
Netflix has a whole structure on his homepage following horizontal and vertical patterns. The best recommended row category (Continue Watching, Trending Now, etc. ) go to the top. The most strongly recommended TV show starts on the left of each row and go right.
Using the same structure in row and column to create a selection of recommendations could be beneficial to your platform. By grouping your products in category (top/bottom rows) and then by relevance (left to right), you should be able to propose the best personalised user experience.
Netflix has a lot of nice series like Stranger Things, Ozark, Squid Game, Casa de Papel…
You may find these TV shows addictive, but do you know why?
The reason is because Netflix masters the concept of “open loop.” It gives you a mix of frustration and disappointment of not knowing what really happens at the end of the story.
Netflix got you! Your brain wants to close the loop asap and it will make you more alert and involved on the platform.
An open loop is a concept that, in the telling of stories, drives our brains to naturally want to seek out some sort of conclusion
Another way Netflix leverages this concept is by encouraging you to watch the TV shows that you have not finished yet. Your brain doesn't like the loop not to be completed so you will naturally tend to resume this movie.
Takeaways: A solid storytelling in your marketing strategy increase your audience and their engagement. Send push notification or emails if your customer doesn’t complete something like an order, or if he keeps visiting your website.
“AB testing is a method of comparing two versions of a webpage or app against each other to determine which one performs better.”
Netflix runs about 250 AB tests every year. Two different versions of user experiences are compared in order to see their reaction and actions to the suggested changes.
Netflix said that “the images associated with many titles are A/B tested, sometimes resulting in 20% to 30% more viewing for that title!”
AB test your website to be continuously aware of its best-performing displays that improve your conversion rate.