Aim: Can I come up with a referral strategy to grow Netflix’s user base?
Everybody not living in a cave and with internet access knows about the magnificent over-the-top content platform Netflix.
Know Thy Neighbour or Background Research
I remember earlier there was an offer that on referring a friend to Netflix, you got 1 month free. However, for the purpose of this exercise, I clicked on the “Gift” icon on the Netflix dashboard to find out more and there was no information about the advantages to me if I refer somebody (and they sign up).
Here is a screenshot from the current (Dated: 16/12/2020) referral page-
So I contacted customer support asking the very kind and patient executive why should I even refer anybody?
A screenshot of her response:
Summary: basically Netflix tests out referral schemes regularly for regions. Currently for us in India, they have none.
Why does Netflix India not have a referral bonus anymore?
I was thinking about why Netflix has stopped the referral system in India.
A referral system is required for an untapped market or when entering a new market (think expansion into a new geography). The aim of offering a referral bonus here is to attract users with freebies, engage more users and gain popularity in an uneducated (about your product) crowd.
Once a user is onboarded, the company has to count on offering an unparalleled user experience that helps in user retention. Netflix offers an unparalleled user experience in OTT platforms. Especially, in a country like India Netflix has already seen a phenomenal (10.1 million paid memberships) rise. It no longer needs to invest in offering freebies to attract new consumers. Their money is better invested in new content to retain users and count on the network effect of that.
Another theory based on some brainstorming with a friend is-
The recent 2 days Free Netflix for All offering was a double edged sword- (I love double-edged swords and this GIF)
[Okay- maybe hidden agenda or two fold agenda and not double edged. ]
a) For obvious reasons - to offer the users a preview of the abundant quality on the platform
b) For Netflix to gather data about how much untapped potential exists in the Indian market.
Post the StreamFest, Netflix would have real user data about the numbers. They can run massive analytics on this and choose to invest in either building new marketing strategies, or a new referral strategy, or expanding to another geography with the solid moat they have built in India.
What Netflix seems to be focussing on now (and as it should) is user retention, and not acquisition.
Nonetheless, let’s imagine for a moment they hire me as their PM (!!!) and ask me to design a referral strategy for them-
Strategy A
Based on BJ Fogg’s Behaviour Model:
TL;DR Prompt the user with a “Tell your friend about this show” at the end of a movie or a show.
Long Version:
Imagine a user flow where a user has just finished watching a particularly engaging movie. Imagine it was mind blowing and now what does she wish to do? Tell her friends about it and discuss it. (Internal trigger)
Note: If the movie was bad, even better because according to Nir Eyal, negative emotions are more powerful internal triggers.
Prompt: Add a “Tell your Friend” button on the finish of a show (season*) or a movie.
This aims to tap into existing motivation.
We increase ability-
By pre-formatting the content to be shared
Making it highly accessible for the users to send it out.
Added Perks-
This can be customised to add the relevant social media tags of the show- and act as a Marketing gimmick for the shows as well.
Maybe Netflix can add this “Marketing-as-a-Feature” to their offering while onboarding new TV shows/movies during their content onboarding.
Wait a minute…
A problem with this solution is:
In case, the user is watching on a TV or Fire TV Stick with no easy share button, connect to social media, then what?
This is motivated from Apple’s Continuity (seamless switching between devices).
Netflix can trigger the user’s mobile device (nearby preferably), if the user clicks on the share button. The user can then proceed to continue sharing seamlessly to social media from here. The watch experience continues on, without interruption.
The user should also be offered a feature in settings where she can completely disable this button.
Additional Care-
Care should be taken to not dampen the Netflix user experience while watching the show. Users might find “share button” prompts at the end of every episode annoying. Hence keeping the Binge-watch user in mind, while watching a TV show, the button should only be present at the end of every season.
Strategy B
This is inspired from the Hooked Model by Nir Eyal, with modifications.
The Variable Reward Strategy
TL;DR- Introduce a Variable Reward for the user every time someone clicks on the referral they share (and a bigger volume once they achieve conversion).
The Long Version-
Trigger: Prompt the user to share a referral link on any social media platform (after watching something or via a minor nudge)
Action: Just clicking on the Share Button in anticipation of a reward. (Enable sharing with WhatsApp chats, IG/Twitter, Social Media)
Variable Reward: Incorporate variable rewards like -a Cost Per Click metric which adds points to a user’s account. Accumulation of X number of points can add to free days of Netflix membership or translate to other metrics.
Investment: The indirect investment is the points the user has collected- which motivates the user to increase points on one platform and reap benefits rather than on multiple platforms.
Problem with the above:
Allotting a value metric to the points
Misuse of CPC to earn more points
Conclusion
When a company is successful in building the kind of impenetrable product quality moat that Netflix has around it, the network effect of existing user base is far more beneficial than any referral program can bring.
That’s All Folks! Please reach out to me for feedback and/or comments.
Disclaimer: Thoughts/opinions are my own, images are from Google and I tried making the article as link intensive as I could to get my citations right.
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