Netflix: Using KPI’s to Create Clear Outcomes for Success
Netflix is the king of subscription streaming services in America and around the world. It started in 1997 as a DVD sales and rental company, but they dropped the sales aspect of the business to focus on DVD rental by mail fairly quickly. The streaming service began in 2007, and today the bulk of their customer base uses the streaming subscription. Netflix is a business Titan, and is at the forefront of the change in how people now watch shows. In the past, television was the format people used to watch any content. Now, people watch their shows on their phones, iPads, televisions, computers, etc. Netflix started that trend. As of 2021, Netflix boasts almost 222 million subscribers.
Sample % of US Viewing Habits in 2018 (Fata, 2020)
As a company, Netflix’s corporate strategy is shown in their mission statement- “we promise our customers stellar service, our suppliers a valuable partner, our investors the prospects of sustained profitable growth and our employees the allure of huge impact” (Fata, 2020, p.1).
As of 2022, Netflix still has the objective of growing their streaming service around the world, but today they are facing a lot of competition from companies like YouTube, Hulu and Amazon Prime, Disney +and HBO Max to name a few. Netflix also has the objective of continuing to create the best customer experience for its users into the future. In order to do so, Netflix must set SMART goals.
In recent years, Netflix has created a lot of its own content by way of movies and streaming series. Customers now look to Netflix for its own content just as much as they do for movies and former tv series if not more. Netflix needs to continue creating its own content and if at all possible, reduce the amount of time it takes between one season to the next. With covid, that was impossible as production and filming was halted or extremely limited, but now that can change. With the help of its social media platforms, Netflix can measure what types of creative content are the most popular while also promoting its shows and services. Furthermore, Netflix already has different tiers of membership, they can still tweak their subscription scale to be more cost effective for some and offer more perks for others. Amazon Prime’s streaming service being combined with its sales and shipping platform is an example. Lastly, continuing to make each customer’s personal viewing experience customizable will create long lasting relationships with members. Netflix currently makes recommendations based on prior shows watched, but that can be improved upon by becoming more interactive with the help of social media.
This is simple. Checking membership growth and analyzing not only how many new customers Netflix gains over time but also how many current customers they keep is quantifiable. Checking the effectiveness of social media posts promoting Netflix through numbers of likes and comments is measurable as well.
Attainable and Realistic/Relevant
The specific goals set here are ones that Netflix already work with. Honing them is well within their ability. The goals align with Netflix’s objectives and they are relevant to the times. With the pandemic, Netflix became even more popular than it was before, as people were stuck at home and it was one of the few past times still available. Customers who could not visit family and friends connected through watching shows and it was a time to capture more viewers. It is a very relevant goal to want to keep the customers they have already accumulated while continuing to gain new members.
Reducing the amount of time that content is released between seasons is one time based effort Netflix should make. Also, tracking new membership and retention numbers monthly or even weekly helps Netflix meet its main objective.
Tracking certain key performance indicators (KPI’s) is a necessary part of meeting any company’s main objectives, in addition to setting SMART goals. Two social media KPI’s that are extremely important to Netflix are customer support and engagement. Netflix should look at Customer satisfaction (CSat) scores. It is “easy to calculate. It’s the sum of all positive responses, divided by the total responses collected, then multiplied by 100. The outcome leaves you with the overall percentage of satisfied customers at your business” (Burkett, 2021, p.1). These calculations are easy and straightforward-as simple as having a poll or survey on their platform of choice asking about the customers personal satisfaction with the streaming service. Monitoring social media platforms for reviews and customer testimonials is another great way to gauge customer satisfaction. Taking this one step further, by creating a poll on all their social channels, Netflix can gauge if their customers would recommend them to other potential customers. This gives them the Net Promoter Score (NPS) which is the “metric that measures your followers’ brand loyalty” (19 Social, 2021, p.2). Taking this a step further, Netflix can measure its customer support efforts against that of its competitors to see how they fare overall.
Engagement is the most important way to keep customers excited about what Netflix has to offer currently and in the future. Using content on all of their social media channels, Netflix can post about upcoming features and simply by monitoring the number of likes, comments and shares can gauge the interest almost in real time. Showing trailers and giving release dates on Facebook can garner Netflix a lot of information. Sometimes, the lack of interest can be noted. For example, a show called Cursed Netflix had great hopes for was cancelled after only one season based on analysis of viewership and interest. It just did not measure up to the expectations Netflix had while other shows were waiting in the wings to take its place. There is a lot of competition even within its own business and Netflix has to be able to know which shows to keep and which ones to let go. (Fongers, 2021). Average engagement rate is “all the engagement a post receives-including likes, comments, saves and favorites-by the total number of followers” (19 Social, 2021, p.2) and amplification rate is basically how much Netflix’s followers share Netflix content with their own followers (19 Social, 2021). Amplification rate is especially valid because user generated content is the most trustworthy and in turn when a current Netflix customer shares Netflix content it tells the potential customers the content is shared with that Netflix is a worthwhile purchase.
How can Netflix pull this all together? Each social media platform offers its own tools for tracking the performance of posts on the channel. Examples are Facebook Insights and Twitter Analytics, and they are free. For smaller companies that are only tracking one or a few accounts, these tools are great. However, a company the size of Netflix is more than likely going to need to implement a strategy that uses a social media management platform. Companies like Hootsuite can track performance analytics to give Netflix the data they need to make sure they are meeting their objectives. Plus, social media management companies can offer other services like social monitoring and listening, social media content calender creation and more. (19 Social, 2021).
The expected outcome Netflix wants from its social media efforts and SMART goals is an accomplishment of its primary objectives. Netflix “wants to entertain the world” (Netflix, 2022). In so doing, their main goal is to increase the number of customers it has while creating a supreme and customizable viewing experience for everyone of its members. Using quantifiable data that social media platforms provide is an important aspect of meeting these goals and achieving the success Netflix is striving to get. Engaging with customers on social media channels is a surefire way to garner interest in their streaming service and have these same customers promote their services to friends, family and followers. Taking customer satisfaction to new levels creates more loyalty among customers and leads to more organic promotion which in turn helps Netflix gain more customers. Without the use of social media platforms, this is difficult to do.
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