Netflix: a surprising example of lazy marketing

Netflix LogoThere’s really nothing more irritating than lazy marketing. It’s when a marketer expects you to just hand over your money to them. The marketer is behaving lazily — they don’t invest their time researching and developing a compelling offer that drives consumers to purchase the product/service.

So imagine my frustration when a lazy marketing email arrived in my inbox from Netflix, a company that I’m a big fan of and I’ve written about in the past. It was a win-back offer asking me to renew my recently cancelled subscription. I had closed my account when Netflix announced that their 1-DVD rental/unlimited streaming service was increasing from about $10 to $16 per month earlier this year. Actually, I considered subscribing only to their streaming service but felt that the value wasn’t there at the $7.99 per month price point. While I am a believer that streaming media is the wave of the future, I felt that the Netflix library (or anyone else’s these days) is a bit anemic. So shortly after shutting it down, the win-back emails started rolling in and while I ignored the first one or two, I started to notice a surprising pattern.

The imagery and copy varied slightly between the emails but the offer was always the same — $7.99 for streaming service (see for your self below).

Email #1 (click to enlarge):

Netflix win-back email campaign offer #1

Email #2 (click to enlarge):

Netflix win-back email campaign offer #2

Basically, the Marketing team was using two win-back email templates, and these templates were being “personalized” by inserting my name, which is an emailing marketing 101 tactic. Now for a company that’s recognized for their data mining prowess, I am surprised at how little of my user data was introduced into the email, especially when considering that higher levels of personalization drive engagement and that most ESP’s (email service providers) have significant built-in email personalization capabilities, like showing your prior viewing behavior. If you’re looking for solid example of such marketing efforts then check out the 26% increase in open rate and 2.3% average sales conversion rate that Ice.com experienced when they started personalizing email offers earlier this year.

I do realize that win-back emails were probably a low priority for the Marketing team since Netflix saw robust subscriber growth up until October, which is when the price increase drove 800,000 subscribers to turn off their Netflix service. But I would have expected that by now someone in the Marketing department would have experimented, maybe just a little more, by adding a template that varies more than the messaging. How about changing the offer? Considering that Netflix spends approximately $0.05 to deliver a 2-hour movie, I would need to watch 5+ movies a day on a $7.99 per month account to break the business model and I doubt that most folks have that kind of time. At the very least, applying such a simple solution would buy time for the Netflix Marketing and the Data Science teams (aka, data mining team) to join forces to devise an alternate and probably more elegant, data-driven approach to bring subscribers back.

What’s the worse thing that could happen? You may even net me back! 🙂

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4 Comments

  1. Lol, that’s ridiculous.  I used to have Netflix, and
    must admit that Hastings’
    mismanagement of the company led me to part ways.  I have DISH network as
    a provider, and was ecstatic when I learned (from my boss at DISH) that the new
    Blockbuster Movie P{ass would be available to employees.  Now, for a price
    lower than Netflix, I get access to thousands and thousands of movies, TV shows
    and games!!  There are no late fees, and I can get titles either in the
    mail, in-store exchanges or streaming live!!  You’re correct when you
    describe the provider’s libraries as anemic, but DISH is taking big steps to
    expand its growing content base.  They even gave me an additional 20 HD
    Movie channels (Epix, HDNet etc.) to sweeten the deal!!  I have been very
    pleased with these services, and can always fall back on my regular lineup if
    I’m done with movies for a while!!

  2. The subject lines were the hook that made me click. It read: “Tomer, come back to Netflix and get unlimited movies & TV shows today!”

    I figured that they had some special to entice me back. No such luck!

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