It isn’t often that a major, glob­al brand becomes a house­hold name. Net­flix have made such a mas­sive dis­rup­tion to the way peo­ple are buy­ing and watch­ing film and tele­vi­sion, that in a way the brand is no longer just a con­tent stream­ing provider, but a syn­onym of the home media dig­i­tal rev­o­lu­tion. It’s been achieved through an arse­nal of inno­v­a­tive prac­tices and clever mar­ket­ing. What is their secret? What are the ingre­di­ents every brand mar­keter should be aware of to cook up suc­cess of their own?

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It’s Fri­day night and my wife and I sit down after the kids have gone to bed. We just need one look and then my wife says, “Shall we?” I reply “yes” and with­in sec­onds we’re com­plete­ly into it.

A lot of “oohs” and “aahs” fol­low for the next 50 min­utes: we’re watch­ing our favorite show “House of Cards”. Fifty min­utes lat­er, my wife looks at me again and asks: “one more?” The answer is the same and off we are again.

It’s a scene you will be able to see in many house­holds on Fri­day nights or any oth­er night of the week.

It’s the dream of any mar­keter: cre­at­ing the addic­tion.

The suc­cess of the ser­vice is immense, with more than 50 mil­lion sub­scribers and rev­enue of $1.34 bil­lion in the sec­ond quar­ter of this year.

What’s Net­flix’s recipe for suc­cess? What makes con­sumers go back to Net­flix so often? Let’s look at three of the main ingre­di­ents: under­stand­ing of the audi­ence, cre­at­ing the addic­tion, and mak­ing a con­ta­gious prod­uct.

Lesson 1: Understand Your Audience

Net­flix under­stands its users and makes them feel spe­cial. This is a major rea­son the ser­vice has suc­ceed­ed.

I’m one of 50 mil­lion Net­flix sub­scribers, yet it feels as if they craft­ed Net­flix just for me. That’s all because of the way Net­flix orga­nizes their prod­uct.

Net­flix under­stands the needs of mod­ern-day peo­ple watch­ing TV or movies: see­ing what you want when­ev­er and wher­ev­er you want. The $7.99 per month cost is afford­able for many and is much cheap­er than the prices of cable com­pa­nies.

Com­bined this is very pow­er­ful. Even though I won’t watch most of what Net­flix has to offer, I also would­n’t watch most of what a cable com­pa­ny offers. But because Net­flix is fit to my needs and tastes, and it’s cheap­er, it feels like a much bet­ter deal.

How can Net­flix under­stand con­sumers so well and what can we learn from this?

Use Of Big Data

Net­flix is prob­a­bly the best exam­ple of a com­pa­ny using big data.

Mar­keters have been talk­ing about per­son­al­iz­ing con­tent for years. We’ve been tak­ing small steps toward a “per­son­al­ized web” since Google start­ed per­son­al­iz­ing results for every­one in 2009 (though this has pri­va­cy impli­ca­tions, as Eli Paris­er describes in his book, “The Fil­ter Bub­ble”).

Per­son­al­iza­tion also has its advan­tages – name­ly, the abil­i­ty to give peo­ple what they want or need. Net­flix is a great exam­ple of how this can work. They seem to even out­play Ama­zon when it comes to per­son­al­iz­ing con­tent and get­ting peo­ple to stick with them and watch more and more.

Joris Evers, direc­tor of glob­al cor­po­rate com­mu­ni­ca­tions for Net­flix told The New York Times that there are 33 mil­lion dif­fer­ent ver­sions of Net­flix. That’s how per­son­al­ized it gets. Net­flix under­stands that nobody is the same, so every­one needs their own per­son­al atten­tion.

To deliv­er per­son­al­ized con­tent, Net­flix must under­stand their audi­ence on a one-to-one lev­el. This isn’t your “aver­age” gender/age/income type of user under­stand­ing, but under­stand­ing on a per­son­al lev­el, which is lot more dif­fi­cult to find out. To get that under­stand­ing they rely on big data.

Net­flix gath­ers data in many dif­fer­ent ways.

User Data

It all starts with the data that Net­flix users pro­vide. Net­flix tries to tell the dif­fer­ence between users in one house­hold (though this doesn’t work on every app) and even asks the users to rate shows them­selves so they have a start. And users get the option of cre­at­ing a list of series and movies they want to see.

This is just the data Net­flix has asked for and been giv­en by users. What’s more inter­est­ing is the behav­ioral data.

Net­flix tracks our every move. Which movies and series we watch are the obvi­ous ones, but the detail data is much more inter­est­ing for Net­flix. For exam­ple the exact tim­ing we stop or pause a show or maybe even scroll back a lit­tle will tell Net­flix a lit­tle bit more about our likes and dis­likes.

Movies And Series Data

Track­ing our behav­ior is one thing, but you then have to con­nect that behav­ior to the data you already have. And to make an almost per­fect con­nec­tion, you need a lot of data.

Net­flix did their research. Even before their launch, they researched every side – not just the user side, but also the prod­uct side: in their case, the movies and series.

Net­flix gath­ered as much infor­ma­tion as they pos­si­bly could on every show and movie they have. All the basics (i.e., gen­res and cat­e­gories) were cov­ered, but Net­flix went much deep­er, actu­al­ly pay­ing peo­ple to watch series and films and tag them with all dif­fer­ent sorts of meta­da­ta.

Ear­li­er this year The Atlantic described how Net­flix pos­sess­es “a stock­pile of data about Hol­ly­wood enter­tain­ment that is absolute­ly unprece­dent­ed”. The Atlantic tried to do the same and real­ized how much work it must have been.

This data is extreme­ly valu­able because it con­nects the user data to the prod­uct.

Social Media Data

Net­flix doesn’t just look at user behav­ior when watch­ing one of their pro­grams; it also looks at social media behav­ior.

Search for [Net­flix] on Twit­ter and you’ll see how many peo­ple are shar­ing infor­ma­tion on what they are watch­ing. But they don’t just share.

Peo­ple share their sen­ti­ment as well – what they like or dis­like about shows, which char­ac­ters have the most impact on how peo­ple react. All huge­ly valu­able data for Net­flix. Why? Because it tells them a lot about users.

Just look at this tweet and the amount of infor­ma­tion it car­ries:

It has infor­ma­tion on the show, char­ac­ters, time of watch­ing, and lev­el of addic­tion in it. Extreme­ly valu­able for a com­pa­ny like Net­flix.

What Can Marketers Learn From This?

Here’s what Net­flix teach­es us about under­stand­ing an audi­ence:

• Nobody is the same.
• Research your audi­ence on every lev­el.
• Con­nect the research to your prod­uct data and find the over­lap.
• Research social media and real­ly lis­ten to what they have to say (sen­ti­ment).

Lesson 2: Make Your Product Addictive

There’s some­thing fun­ny about Net­flix series and movies: they are incred­i­bly addic­tive. My wife and I have watched sev­er­al series on Net­flix and we just couldn’t stop. We even watched mul­ti­ple episodes of the same series (think “House of Cards” and “Down­ton Abbey”, for exam­ple) on the same night. And we aren’t alone: Why is that?

Net­flix seems to have found the Holy Grail on mak­ing your prod­uct addic­tive. Is that pure luck? No – at least not entire­ly. There are a few ele­ments of suc­cess we can pin­point:

Use The Right People

Kevin Spacey is hot these days. One rea­sons for this is his star­ring in the lead role of Fran­cis Under­wood on the Net­flix show “House of Cards”. But Spacey had done a lot of things before and he brought that name to the show. And it was the right name.

Net­flix researched the show before­hand and found a lot of inter­est­ing infor­ma­tion. Most impor­tant­ly: they found an inter­est­ing and suc­cess­ful com­bi­na­tion.

As The New York Times described very nice­ly last year, Net­flix found that the com­bi­na­tion of a pop­u­lar British TV Show (“House of Cards” is orig­i­nal­ly British) with Spacey and direc­tor David Finch­er, who had direct­ed “The Social Net­work” and was respon­si­ble for oth­er suc­cess­ful shows on Net­flix, would be very suc­cess­ful. They crunched all the data avail­able and found that this was the ide­al com­bi­na­tion.

So even before the show aired, Net­flix had a pret­ty good idea of the poten­tial suc­cess. But one could argue that this was just pure luck.

It wasn’t.

It was data.

In the New York Times arti­cle, Net­flix’s Jonathan Fried­land said, “Because we have a direct rela­tion­ship with con­sumers, we know what peo­ple like to watch and that helps us under­stand how big the inter­est is going to be for a giv­en show.”

It isn’t just the series, it’s the peo­ple who come with shows as well. Get­ting Ricky Ger­vais and Chelsea Han­dler onboard was a gold­en move for exam­ple: it attract­ed atten­tion and their fans.

Net­flix knows which peo­ple their audi­ence likes and they bring those on board.

Exclusiveness

Series like “House of Cards”, “Orange is the New Black” and the revival of “Arrest­ed Devel­op­ment” all had some­thing in com­mon: being exclu­sive to Net­flix. Peo­ple could­n’t see these shows any­where but on Net­flix.

Sim­ply the fact that you can’t see it any­where but on Net­flix makes it part­ly irre­sistible. It makes you feel exclu­sive, as if the series was made just for you. The strat­e­gy isn’t unique to Net­flix (HBO does the same, for exam­ple), but it works.

Watch A Whole Season At Once

Next to that it feels good to watch some­thing exclu­sive (even though you are exclu­sive with 50 mil­lion oth­er peo­ple), there is some­thing real­ly addic­tive about Net­flix: on demand. In the “old days” you had to wait a week for the next episode; with Net­flix you have entire sea­sons (and some­times more) avail­able when­ev­er you want, with­out hav­ing to buy the DVD.

Net­flix helped make “binge watch­ing” a house­hold word. This avail­abil­i­ty is so addic­tive to some that they can’t stop watch­ing.

It’s Available Everywhere

As long as you’re in the right coun­try you can watch what­ev­er you want on Net­flix on any device. It’s every­where! You don’t have to wait any­more until you get home. Start watch­ing on the train!

Image source: Net­flix PR

What Can Marketers Learn From This?

Here’s what Net­flix teach­es us about turn­ing users into addic­tive users:

• Get the right peo­ple involved, both the “influ­en­tials” endors­ing your prod­uct as those work­ing on it.
• Make (part of) your prod­uct exclu­sive.
• Offer some­thing oth­ers don’t have.
• Make your prod­uct avail­able in as many places as pos­si­ble.

Lesson 3: Make Your Service Contagious

We’ve seen how Net­flix uses big data and social media to under­stand their audi­ence and with that cre­at­ing the right prod­ucts. We’ve also seen that the way Net­flix struc­tures their prod­ucts (apps, series, and movies) makes peo­ple repeat­ed­ly come back to the ser­vice.

Now let’s look at how Net­flix uses their, yours, and everyone’s social net­work to make their ser­vice as con­ta­gious as the flu.

Before we look into that how­ev­er you have to under­stand that “social net­work” is much more than social media. A social net­work is basi­cal­ly any­one you’re con­nect­ed to, direct­ly and indi­rect­ly, online or offline.

Quality Customer Service

A very impor­tant part of get­ting peo­ple to talk about you in a pos­i­tive way is doing your job right. But even more impor­tant is offer­ing the right ser­vice when things go wrong.

We’ve seen exam­ples in the past of brands being more pop­u­lar after a mis­take than before, sim­ply because they did a good job fix­ing the prob­lem. Net­flix real­ized this and set up a cus­tomer ser­vice pro­gram that puts a big empha­sis on social. In an arti­cle on Social­Me­di­a­Con­tracters you can read how four things are impor­tant in qual­i­ty cus­tomer ser­vice – cul­ture, chan­nel, met­rics, and fans – and how Net­flix “ticked all the box­es.”

Those Cool Kids Again

Again, get­ting the right peo­ple involved is impor­tant. Hav­ing peo­ple like Spacey, Finch­er, Ger­vais, and Han­dler onboard pro­vid­ed qual­i­ty, but it also pro­vid­ed “social proof.” If peo­ple of this stature are will­ing to work with Net­flix, it must be good!

The fact that Han­dler chose to do a show on Net­flix gen­er­at­ed a lot of free media cov­er­age. Peo­ple were talk­ing about it. Get­ting the “cool kids” involved def­i­nite­ly helped get the word out.

Connected to Facebook

Net­flix has a con­nec­tion with Face­book. You can login using Face­book, but you can also share what you watch on Face­book. But more impor­tant­ly, you can see what oth­ers are watch­ing.

Image source: splash­press

This gives Net­flix a lot of data on their users and their con­nec­tions, but it also helps the ser­vice gain some trac­tion. It shows what peo­ple are watch­ing, to oth­ers, which will make that their friends are at least trig­gered to the ser­vice and in some cas­es will be more tempt­ed to use Net­flix or if they already do, watch a series or movie, because their friends watched it.

Popular On Facebook Section

Net­flix also has a ‘pop­u­lar on Face­book’ sec­tion, which will show you as a user what oth­er peo­ple are watch­ing. This will with­out a doubt trig­ger you to watch some of it, espe­cial­ly since it is per­son­al­ized like described above.

The Social Pressure

What Net­flix does with Face­book is part of build­ing social pres­sure. The pres­sure to either start using the ser­vice or watch cer­tain shows, sim­ply because their friends are. Net­flix is very keen on this and tries to get you to put pres­sure on your peers, some­times even with­out know­ing it.

Tell Your Friends

Net­flix has just announced that it is now pos­si­ble to rec­om­mend your favorite shows and movies to your friends. Spe­cif­ic friends even. You can con­nect to Face­book and choose which friend should watch the series you are watch­ing as well. No stronger rec­om­men­da­tion is pos­si­ble.

It’s the old “tell-a-friend” func­tion­al­i­ty, but just a bit smoother.

(Email is in Dutch, but hope­ful­ly you get the idea.)

Playing With Spoilers

In the “old days” we would have spoil­ers that would trig­ger you to mark your agen­da for the next episode of the series you’re watch­ing. At the end of the episode you would get a lit­tle sneak pre­view of what’s com­ing next. These days, spoil­ers are every­where, espe­cial­ly on the web. Whether it’s a new show or a new episode, spoil­ers are teas­ing peo­ple to head over to Net­flix.

Net­flix makes use of this trend in a clever way by get­ting many spoil­ers out there, on TV, but also on the web. And they push these spoil­ers quite a bit, hop­ing peo­ple will share them with their own net­works. Just look at the Net­flix Twit­ter account in the U.S. and you will see lots of tweets like this:

But they even take it one step fur­ther: Net­flix recent­ly launched spoilers.netflix.com, com­plete­ly ded­i­cat­ed to spoil­ers. Here they show spoil­ers, but they are main­ly try­ing to trig­ger the audi­ence to par­tic­i­pate with fea­tures like “What kind of spoil­er are you” and “Spoil your­self”.

A lit­tle psy­cho­log­i­cal trick here is to add the warn­ing sign, which will make peo­ple more curi­ous.

What Can Marketers Learn From This?

Here’s what Net­flix teach­es us about mak­ing a ser­vice con­ta­gious:

• Offer the right ser­vice when things go wrong.
• Get the right endorse­ments from those who mat­ter.
• Con­nect to the social chan­nels.
• Cre­ate social pres­sure amongst your fans.
• Help your audi­ence to share.

The Final Ingredients: Trust, Quality Content & A Pinch Of Luck

There are a few oth­er impor­tant ingre­di­ents to use on every prod­uct or ser­vice we’re try­ing to mar­ket to con­sumers – trust, qual­i­ty con­tent, and a pinch of luck.

Spacey spoke at Con­tent Mar­ket­ing World a few weeks ago. What he said there was sim­i­lar to what he said at the Mac­tag­gert lec­ture last year: the trust that Net­flix gave the cre­atives of the “House of Cards” show was extreme­ly impor­tant in the suc­cess. The trust they gave result­ed in qual­i­ty con­tent. Watch how Spacey explains it from minute 3:23.

Qual­i­ty con­tent is one of the most impor­tant ingre­di­ents of suc­cess for Net­flix. With­out that, none of the 50 mil­lion sub­scribers would be watch­ing the shows and nobody would sub­scribe in the first place.

As a mar­keter it’s impor­tant to cre­ate qual­i­ty con­tent and trust those that you hire for that. If you hire the best, they will deliv­er.

But with all the stuff Net­flix does and all the things we as mar­keters do, there’s always one ingre­di­ent that you need: a pinch of luck. Things have to catch on and even though you can do every­thing in your pow­er to make that hap­pen, that lit­tle bit of luck can real­ly make a dif­fer­ence.

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Let’s talk about the Net­flix phe­nom­e­non.