Netflix CRM – The Art & Craft of Embracing New Technologies to Offer your Best

Netflix has been one of the fastest-growing businesses since its inception in 1997. The company has been a perfect example of a business that embraces new technologies along the way and shows immense flexibility in terms of changing its business model with changing times and the changing needs & demands of consumers worldwide. Let us take a look at how Netflix has achieved exceptional growth with the help of Customer Relationship Management, or Netflix CRM, which has enabled it to use customer data to determine the way forward.

Background: The name “Netflix” was derived from the words “net,” short for the Internet, and “flix” a short form of “flicks,” which is American slang for films. Netflix is the brainchild of two entrepreneurs Reed Hastings and Marc Randolph, who launched it way back in August 1997 in Scotts Valley, California as an online movie rental service. In April 1998, the company became the first online DVD rental service in the world following the launch of its website netflix.com, which enabled people to rent DVDs online. Through the company’s website, people would browse the list of films, pick one of their choices, and place orders for the DVDs they wanted to rent, which the company would send by post. Once they finished watching, they would simply have to send them back to Netflix via the post. Initially, the company followed a pay-per-rental model. However, after attaining exponential growth and practically taking over the DVD rental market, the company started a subscription-based model, which enabled users to keep their rental DVDs for as long as they wanted to, but could rent a new one only after they returned their existing one. As early as the year 2000, Netflix introduced a personalized recommendation system for movies based on ratings provided by members to accurately predict which movies they are likely to enjoy.

This was their first Customer Relationship Management (CRM) milestone. With this move, in 2005, the company’s subscriber base reached 4.2 million!However, the company’s quest to offer its customers unique and innovative experiences kept growing everyday! In 2007, Netflix introduced video streaming, which enabled its subscribers to watch movies and television shows of their choice on their laptops and personal computers. A year later, the company partnered with consumer electronics companies to enable users to stream on Blu-ray disc players, set-top boxes of TVs, the Xbox 360, PS3, and other Internet-connected devices.Eventually in 2010, Netflix switched to the video streaming model that we all know today, which is available on the Apple iPad, iPhone, and a host of other handheld devices across the world. In the same year, it launched its service in Canada. By 2016, Netflix made its service available in most countries across the world, some of which include the UK, Latin America, the Caribbean, Spain, Italy, New Zealand, and Japan. As of 2020, the company has a subscriber base of 167 million spread across more than 190 countries worldwide. The platform offers a wide range of movies, series, and documentaries in a variety of languages and a wide range of genres from around the world!

CRM – An Agile & Highly Scalable ApproachWhat sets Netflix apart and is responsible for its exponential growth over the past decade is its ability to adopt modern marketing, such as Customer Relationship Management (CRM), which is an agile, innovative, creative, and data-driven marketing strategy. As opposed to traditional marketing principles, CRM enables marketing to various demographics based on the customer data gathered by the company. This data includes the age, location, watch history, preferences, favorites, etc. of users, based on which the Netflix app suggests movies/shows that they are likely to enjoy. Netflix develops programs, such as complicated dramas (House of Cards), action series (Money Heist), horror series, and exclusive films that star popular actors & actresses. This is possible only because the company’s Internet distribution model enables it to simultaneously serve different audiences separately.

Most Netflix subscribers are not likely to even realize the vastness in the number of programs available on the platform, as Netflix doesn’t expose subscribers to programs that they are likely to not be interested in.  Internet distribution has enabled Netflix to gather extensive subscriber data, which the company uses to cultivate its library. This ability has not only enabled it to provide users the content they are likely to desire, but also recognize micro-genres and patterns followed by viewers.Think of Netflix as an extensive library with numerous small rooms and nooks. However, most of its subscribers never wander on different floors, and instead, they are guided to corners that match their tastes.

This is possible because Netflix produces series and films for various countries & regions around the world. Examples of some of these series are Jamtara, Sacred Games, Delhi Crime, and Little Things in India, Hibana in Japan, and Marseille in France. Similarly, it has produced Netflix original films too, such as Rajma Chawal, Chopsticks, Bypass Road, etc. for Indian audiences. Similarly, an increase in the number of subscribers in other countries has encouraged Netflix to add original content to its library for audiences from those countries.

In all, Netflix has taught the world how thinking out of the box when it comes to adopting new technologies that emerge in the market as well as making optimum use of customer data can fuel growth that knows no bounds! For more such updates on technology & business, do visit the blog section of our website.

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Jamie Larson
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