Netflix is building the most powerful company in the world – and it’s all based on understanding customer preferences.

Netflix now has the viewing preferences of 104 million people worldwide. Not only do they know name and location, thanks to mobile apps and multi-device subscriptions they also know where you like to watch certain content – oh, and at what time of the day.

Tue Jul 18 11:16:00 EDT 2017
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The news this week that Netflix has hit 104 million subscribers is not only incredible, but also very exciting. This is a company that has built its business on data, and the power of understanding customer preferences.

Last week another news article “Why women of 40 and 50 are the new ‘ageless generation’” illustrated how preconceived ideas of market segments are being swept away by a rapidly evolving world that means targeting customers based on demographics alone is almost certain to fail.

As I rapidly approach 40 with two children and a house “in the burbs”, it would be reasonable to expect a marketer to target me with offers around DIY tools, or all-inclusive holidays in Spain. Both of these would be way off the mark. Not surprising when you consider I appear to be in a new sub segments recently identified as a “Xennial”. If you’d not heard, Xennials are those of use born between 1977 and 1983. We’re old enough to have enjoyed a childhood free of the internet, but spent our working lives online. Apparently we possesses the cynicism of Generation X, but this is balanced with a healthy dose of Millennial optimism.

I am part of a rapidly changing consumer marketplace that is continually developing complexity, bringing both challenge and opportunity for commercial organizations – but what does this have to do with Netflix?

Consider for a moment the headline. Netflix now has the viewing preferences of 104 million people worldwide. Not only do they know name and location, thanks to mobile apps and multi-device subscriptions they also know where you like to watch certain content – oh, and at what time of the day. Take this on a step. Netflix also understands the subject of the content you are interested in and how long you are typically able to watch it for.

The longer you are a subscriber, the more insight Netflix develops. For example, four years ago my viewing preferences would have been action films on a Saturday night through the television (yes, people still use those). Since my children arrived, my preference has moved to 30 minute hits of TV box sets every weekday night around 10:30pm while doing the washing up. Netflix organises all of this using the future of customer information management – graph databases. It’s the same approach that Google uses to index the web, or LinkedIn uses to understand the relationships between people. It’s the very best way to build and understand the context of a customer such as preferences, time and locations and how they all relate.

So now Netflix understands me better than virtually any other commercial organization I know, and it’s not just me. They “get this” for 104 million other people. All this knowledge has helped Netflix develop better and better content accelerating the growth of subscribers.

The power lies in acquiring more and more customer data and using it constructively to extend the customer relationship. Eventually, when new subscribers run out, we’ll see the biggest data driven organizations exploring collaborative relationships to work with our data. It’s already started to happen, with Microsoft buying LinkedIn, Facebook buying WhatsApp. Who do you think might be next? Is your data doing enough for you?

The contents of this blog post are not intended to imply a relationship with, or an endorsement or sponsorship of, Pitney Bowes by Netflix. Netflix and the Netflix logo are the protected trademarks of Netflix, Inc. All rights reserved.