Product Messaging: Retail vs. Subscription
I recently changed jobs. I went from working in, what one may consider, a traditional email messaging environment with Nest to working for Netflix’s product messaging team. In the last two months, I have learned that the messaging perspectives of these two companies differ greatly especially in regards to how they leverage email.
Nest has a product suite consisting of 9+ products in addition to a subscription model targeting security and camera focused customers. Email as a messaging channel is primarily used either to help enhance products (Nest Cam motion detection, home report) or as a marketing vessel. The primary function is to encourage additional purchases from the existing member and/or non-member base.
At Netflix, where only one core subscription-based product is sold, there is no need to drive additional purchases via retention marketing from the customer base. Instead, the goal is inherently simple, yet complex; to either encourage customers to watch more content or to drive sign-ups through the non-member audience.
The shift that had originally confounded me at Netflix was the complete lack of necessity for promotional campaigns with intent to drive purchases. They are simply deemed unnecessary in the Netflix ecosystem or are perceived with negative connotations (i.e. drive increased unsub rates, decrease member retention, degrade brand image). This change has not been easy to stomach. No more eleventh-hour discount campaigns to drive 4th quarter sales. No more $/open metrics filling me with the giddy high of inferring revenue being generated from my latest email blast.
Netflix, a subscription-based entertainment service, uses streaming hours as a core metric to measure member engagement. This is in addition to traditional industry standards such as revenue and retention. This, by extension, has created a unique messaging environment divergent from your traditional email marketing paradigm. In my perspective, this is neither good nor bad, but simply new and different when compared with retail-based environments. It highlights how companies have expanded their mindset in regards to messaging and have found ways to take advantage of this high ROI channel.
Of course, Netflix still uses dollar related metrics to measure revenue generated for non-member acquisition based messaging. Acquisition messaging at Netflix aims at winning back former customers and customers who dropped off the signup flow. Coincidentally, the team that I work on focuses on customer growth through messaging. I get to drive the implementation of thoughtful product messaging strategies that are continuously tested and measured against valid business core metrics.