6 Things We Can Learn About Customer Engagement From Netflix

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6 Things We Can Learn About Customer Engagement From Netflix

Netflix is one of the most successful companies in the world, with over 94,000,000 subscribers. One of the reasons for Netflix’ success is the way they have engaged their customers at a level never-before-seen. The video streaming service has become a cultural touchstone. They have reached these heights because they do an excellent job of focusing on customer engagement. They can do this thanks to a nearly unprecedented amount of data available to analyze regarding their customers viewing habits. The interesting thing about Netflix is that none of their processes are impossible to emulate. If you commit to making customer engagement your highest priority, you can achieve similar results.

In this article, we will examine 6 areas that Netflix excels in and how those areas contribute to effective customer engagement. We will also relate those lessons back to the financial services industry.

1) Use Data To Learn Customer Preferences

Every person in the world has unique interests, wants and needs. Every action an individual takes is purposeful. Netflix clearly believes this and uses data to help inform every decision they make. Their commitment to data is a major contributor to their success. Netflix looks at factors such as:

  • When you pause, rewind, or fast forward
  • What day you watch content (Netflix has found people watch TV shows during the week and movies during the weekend.)
  • The date you watch
  • What time you watch content
  • Where you watch
  • What device you use to watch (Do you like to use your tablet for TV shows? Do people access the Just for Kids feature more on their iPads, etc.?)
  • When you pause and leave content (and if you ever come back)
  • The ratings that are given (~4 million per day)
  • Searches (~3 million per day)

With the data at their disposal, Netflix ensures that it knows as much as it can about their customers’ streaming preferences so they can offer a better service. Netflix has an algorithm that parses this data to recommend content. 70% of content watched on Netflix comes from these suggestions.

Takeaways for Financial Services: As a financial service provider, data can be harder to come by. The sensitivity of the required data means that people might not be willing to provide it for security reasons. This may be due to a lack of trust in the technology that will collect and store the data. It could also be for a number of personal reasons. Whatever data you have available can be used to match the client with content (and other information) that can engage them. You can use data to find your clients’ pain points and provide information that they will find useful and interesting. This has the opportunity to elevate the level of trust your client base has in your knowledge.

2) Communicate and Listen

If you want to use data to inform yourself about what your customers want and need, you should communicate with (and listen to) your customers. People generally know what they want, especially when given a set of options. Netflix has learned this lesson the hard way thanks to a 2011 communications gaffe. The company announced that it would increase prices while no longer supporting mail-order DVD services. They did not explain why the price was increasing and the explanation of splitting the mail-order service from streaming was underwhelming. Customers were outraged. The company suffered by losing hundreds of thousands of subscribers, leading to their stock price plummeting.

They heard the complaints and after seeing what happened, reversed the decision and made it a priority to listen and properly communicate with their customers. Now, every month Netflix announces new titles and original releases as well as other relevant information.

Takeaways for Financial Services: As a financial service provider, it should be even easier to listen and communicate with your customers. Most clients will come visit your practice on a semi-regular basis, giving you the opportunity to have conversations with them. You should use these conversations for communicating relevant information and taking suggestions. It will improve your business if you can provide clients with services they want and need. By providing targeted, relevant content, you can better engage your client base, having them become more active and interested in your services.

3) Give Your Audience What They Want

There is a song, written in 1975 and performed by The O’Jays, called “Give the People What They Want”. That song should be the anthem for all marketers and product development teams. Simply give your customers what they want. Netflix definitely follows this advice. Here is just one (of the many) examples where Netflix “gave the people what they want”.

In 2011, Netflix announced they were splitting their DVD-by-mail service and their streaming service into two separate businesses. This would have resulted in a 60% increase in price if a consumer wanted to keep both services. Splitting their two services lost them 800,000 subscribers over the summer of 2011. Their stock price tanked, and before it was too late, they canceled their plans. They never stopped supporting the DVD-by-mail service. In January 2017, the company announced that 4.1 million people still get DVDs by mail.

At the time, Netflix was set on splitting up the two services but decided against it because their customer base did not like the idea. They have clearly recovered from the fiasco, and this situation can serve as a reminder to any business: listen to your customers.

Takeaways for Financial Services: If your clients are vocal about wanting something, you should listen to them. Clients may really like a certain package of products that, due to lack of interest, you were considering giving up on. You won’t know if you don’t ask. You don’t have to lose 800,000 customers like Netflix did, but be willing to listen to your customers and communicate changes before they are made. Not listening to upset or angry customers will result in you losing clients, with even more becoming disengaged.

4) Test New Ideas

Netflix is constantly A/B testing new features, usually rolling them out to 10,000 customers at a time. They test what features improve engagement and motivate people to watch longer. The features that are popular are then rolled out to the rest of the user base. This was done recently with their new “thumbs up” button replacing a 5-star rating system. Netflix has also significantly tweaked its recommendation algorithm so the company can provide more accurate suggestions.

Another innovation that Netflix has spearheaded through a series of tests, is the streaming functionality of the website. At first, Netflix was built around the mail-order model. As new technologies were tested, they realized how easy it was becoming to stream video, shifting the company towards a streaming service business model. Netflix is constantly testing features and ideas. This idea can apply to all industries.

Takeaways for Financial Services: You can A/B test various marketing functions such as direct mail, email, social media and many other digital marketing functions. Try different copy, different imagery, and different buttons. See what tactics work best for motivating customers to engage with you. You can also test various personalization tactics. What methods work best for personalizing products and services to specific clients? Testing to see what methods, technologies, and communications methods are the most cost effective and easiest to implement while remaining compliant is yet another test you can carry out.

You might not be able to roll out your tests 10,000 people at a time, but any testing that leads to improvement is worth it. After all, any improvement is an improvement. Every little bit counts.

5) Be Available “On Demand”

Netflix is easily accessible 24 hours per day, 365 days per year. Whenever somebody wants to watch a movie, or whenever they have some free time, Netflix is there. The constant availability of Netflix is one of the main draws to the service. Can’t sleep, and want to watch old episodes of Buffy the Vampire Slayer at 4:45 in the morning? Netflix has you covered. There is a reason that nearly 100 million people worldwide subscribe to Netflix.

Takeaways for Financial Services: Every business should strive to be as available to their customers as Netflix is. Although you likely won’t be available around the clock, your digital properties (website, client portals, etc.) should be high quality and accessible, regardless of where the client is in the world at any given time.

You should also strive to have enough content available to satisfy people’s thirst for knowledge. 67% of the buyer’s journey now takes place digitally. By providing high-quality content, you can educate your buyers, hopefully showing them how to solve their financial challenges. This gives you an opportunity to prove your value to the reader. This will engage their interests and motivate them to do business with you.

6) Personalize

The main factor contributing to the success of Netflix might be the company’s ability to personalize every experience. Netflix has used data to segment its library into 76,897 different genres. These genres are only recommended to people who (based on data) might be interested. A few examples of super-specific genres created by Netflix are:

  • Oscar-winning, visually-striking movies from the 1970s
  • Critically acclaimed animal tales
  • Witty dysfunctional-family TV shows
  • Emotional Fight-the-System Documentaries

Netflix has used data to analyze and categorize more movies and TV shows than any other entity. They know which movies are similar and why, as well as which categories a specific group of people will enjoy.

Takeaways for Financial Services: While your business might not be able to customize your offerings to the extent Netflix has, you should try to offer personalized experiences for your client whenever possible. You should offer products and services that will appeal to your customers’ needs and interests.

How can you find out what content, products, and services will appeal to specific clients? Start gathering data about what your customers want, what their goals are, what life stage are they in and anything else you think will help match clients with a perfect combination of information and guidance.

In the financial service industry, you might need to meet with people in person or email them a (secure) survey due to the sensitivity of the data you need. Use your CMS to see who is visiting your website, what they are looking at, and any information they provide. With this data, you can cater content specifically to the customer.

Help students learn how to save for school, help young adults learn how to save for a home, help prepare older clients for retirement. Ensure that whatever solutions your clients adopt are right for them, meeting their specific wants and needs.  

By providing quality, relevant content you can better engage with your audience. This will allow you to build your relationships with them, which will motivate action.

What Can We Learn From Netflix About Customer Engagement

Netflix offers personalized, engaging experiences to a wide variety of people worldwide. They are constantly working on improving their service by testing everything and making assumptions using a vast amount of data. There is nothing they do that your business cannot do. By using data acquired by listening to customers you can give your audience what they want. Testing new ideas will help you discover what activities generate the best returns. We can all improve our processes by adopting the lessons we learn from Netflix.

Did you learn anything else about customer engagement from Netflix? Let us know on Twitter @VeridayHQ or on LinkedIn here.