Masterful Marketing: my Netflix freebie and “Netflixed” by Gina Keating
Netflix have long been known as one of the smartest online marketers around. I’ve started reading “Netflixed: The Epic Battle for America’s Eyeballs” by Gina Keating, and am already loving it.
Back when I was an ecommerce analyst at Jupiter in 2001, I met with Netflix who came in to brief us in New York, Reed Hastings and Rick Sneed (CEO and Marketing/PR Director respectively). I was actually just visiting the Jupiter home office in NYC, already living and working out of San Francisco at the time. A few months later I had the chance to visit their first distribution center in San Jose which was quite impressive in terms of the workflow that allowed them to efficiently pick and ship thousands of discs a day to consumers. I again sat with Reed and he emphasized to me their future plans for video on demand, that DVDs were a means to an end and not to underestimate the “bandwidth of a 34c stamp” (yep, that dates that comment right there!).
In the first meeting, Netflix gave my colleague Jared Blank (if I recall correctly) and I free coupons to try the service out for free. Unlike the regular 1-month free coupon, these were good for up to 6-months of free service they told us. What I later found out from Rick Sneed (in 2004, I joined NexTag as Director of Marketing and worked together with Rick who had by then joined the company from Netflix) was that these coupons actually had no end date, but they weren’t going to tell that to us since we probably wouldn’t have accepted them. Up until then, the best “perk” I’d gotten as an analyst was getting onto the Sony Playstation marketing list since I’d been doing some online game projections (this was 1999/2000) for Jupiter. All I’d done was ask them for some projections/adoption figures, but then for some reason I would get Playstation games every couple of weeks sent to me (I didn’t have a Playstation so I sold them on eBay). I then also got invited to the Playstation2 launch party in LA, which was a fun trip but I then told them to take me off their list since I was covering something else by that time. Subsequently when I worked for NexTag, the company policy was to raffle off any gifts received by individuals at the company each quarter to all the employees, something I thought was a great idea and have since implemented at our company (sales/marketing folks get a lot of free stuff from vendors but engineers don’t – so for companies that have both it makes it a lot more fair since it’s a team effort!).
Back to Netflix – – not only did that promotion last more than 6 months, but it has continued now for over 10 years. I never really had much occasion to write about Netflix in my eCommerce research, and since I am not and never was a stock analyst I didn’t really have much ability to influence their stock price so it never really concerned me, and it’s been a great benefit I’ve always expected to go away at some point (and maybe now that I’m posting this it will- I hope not!!). I’ve certainly recommended Netflix to plenty of people over the years and have gotten a lot of value out of it. I wonder how much they got out of giving this benefit to others like me, over the years? Hard to know but even excluding their analyst-friendly tactic I’ve benefited from, Netflix are one of the smartest data-driven marketers we’ve ever seen over the past decade, online or offline. I have great respect for them and the Netflixed book as I’m 60+ pages in is certainly emphasizing that and adding color there.
When I was at Nielsen/NetRatings in 2003 as Director of Custom Analytics, I worked hard on a big pitch to Blockbuster about how they could counter Netflix supported by NetRatings’ analytics. Unfortunately they never hired us for that custom analytics job, though I got a chance to present it to them in Dallas, TX and had good conversations with Ben Cooper and Sam Bloom there who (from my interactions with them then, and subsequently) seemed smart and knowledgeable about internet marketing.
Certainly, you come to realize that it’s not just about how smart the people are that work in your organization but it’s also about the structures they are a part of and the internal incentives to align people in the same direction around shared goals. We sometimes discount this – but this is a big reason for the success of startups in Silicon Valley and elsewhere – that we all crave the excitement and uncertainty involved in doing something brand new, and the uncertainty also that extends to the payoff thereof. This can have big motivating effects as long as the belief is there. Running a startup (as I have since 2008) is both the most fun thing I’ve ever done, and also the most difficult – but when I see people on my team go beyond what even they thought they were capable of, it makes it all worthwhile.