Netflix Willing to Lessen Revenue in Best Interest of Customers

Netflix to begin canceling inactive user accounts - glbnews.com

Netflix announced that it would begin reaching out to inactive users, who haven’t streamed anything on the platform in a year or more, this month. The pandemic’s impact on the economy inspired the company to ask these customers if they would still like to subscribe. If the users don’t respond, Netflix will automatically stop billing them for the subscription; as Netflix explained, “The last thing we want is people paying for something they’re not using… we hope this new approach saves people some hard-earned cash.”

Let’s be clear: With its latest ‘sacrifice’, Netflix isn’t exactly chopping off a limb here. In fact, these so-called zombie accounts make up less than half of 1% of Netflix’s total user base (which, by the way, has grown by over 15 million as a result of COVID).

Still, this proactive approach deserves applause. Especially when it seems like every industry (not just entertainment!) is trying to get in on the recurring revenue game; even brands like Panera (unlimited coffee for USD 9/month!) and Litterbox (that’s right, cat litter!) are launching subscription services. But consumers are fully aware, of course, that most brands will purposely make these services a hassle for customers to cancel. Netflix’s gesture stands out as a rare play in this sector, as the brand shows consumers — even those who choose not to pay them! — that it has their best interests at heart, and that they’ll make cancelling a zero-effort process. And as a result, the subscription services that don’t demonstrate equivalent levels of empathy will stand out.

Why it’s hot: While most companies want us to know what they’re doing so we feel good about continuing to subscribe to them/buy from them/consume content, Netflix seems to be stepping it up a bit by leveraging a re-engagement campaign in a new way. Instead of actively pursuing lapsed customers to continue their subscriptions, in these trying times, Netflix is making it easy to opt out of its service and if you’re so out of touch from them, they just won’t charge you. This could go a long way for good will in the future as people start to reestablish their fiscal comfort. But also, being honest, if you’ve been lapsed for over a year, they’ve already reaped enough extra cash from you. Hopefully this gesture will encourage other companies to do something similar.

Sources: Trend Watching, TechCrunch

Seamless launches Seamless+

Seamless launches a paid offering, aligning to DTC trends of paid membership combined with rewards offerings.

For $9.99/month you get unlimited free delivery and 10% cash back.They also integrate donation match and “Elite Care,” an exclusive customer service offering.

https://www.seamless.com/plus

 

Why It’s Hot:

In looking at what drives loyalty vs. what rewards existing loyalty, it’s interesting to see how paid models are making their way into reward programs.

Panera coffee subscription is the new free-wifi, but it costs $9+/month

Panera has launched a coffee subscription as a part of its loyalty program. For $8.99/month, you get unlimited drip coffee — 1 cup every two hours for as long as you can handle it. They may be burning through beans, but what this really means is they’ll be selling a lot more sandwiches.

From Fast Company: “Though Panera is pitching the subscription as a way for you to save money on coffee, Panera’s 150 test locations over the last three months saw subscribers visit three times more frequently and purchase 70% more in add-on items than the average customer. In other words, watch your wallet. These metrics, in addition to a surge of new customers, are inspiring Panera’s quick nationwide rollout.”

Because most Panera locations are suburban, customers tend to drive to the location. When they’ve made the commitment to drive, people are more likely to “bundle” their shopping by also eating at Panera once they’ve picked up their subscriber coffee.

Bonus points: being mostly suburban, Panera also avoids the on-foot, in-and-out commuter coffee buyers who are not likely to purchase any additional goods.

For consumers, it’s a novel way to think about coffee purchase.

For Panera, it seems like a smart way to lure people into their stores, in order to sell them higher-margin products like sandwiches and soups.

Why it’s hot:

1. Data: Registered subscribers will give Panera a huge amount of consumer data that they could use to understand menu preferences by a variety of demographics, as well as better identify core customers and understand their habits.

2. Earn brand loyalty by exploiting commitment bias: If you get someone to buy into the subscription, they are far more likely to continue to go to you for their coffee fix even if they ultimately cancel their subscription as brains subconsciously associate their body’s physiological coffee high with your store, and those neural pathways are difficult (and cognitively costly) to change.

3. It’s a smart lure: A big challenge for suburban food and beverage shops is getting people in the door. This encourages that, and a lot of people who go into a shop to buy coffee end up buying a muffin, or a sandwich, which is where these companies really make their money. If you stay (or return) to Panera to take advantage of the every-two-hour refill, you’re likely to buy even more.

Source: Fast Company

Sustainable Baby Clothes

UpChoose, a year-old startup, aims ‘to reimagine and redesign consumption in a way that’s less wasteful and more sustainable and efficient’ with its organic babywear rental service.

Body image for Always in fashion

New parents are confronted with endless choices of baby clothes, toys and accessories. Whether they feel pressure to buy the latest products or are given them by well-meaning family and friends, what we think of as an exciting time in our lives, entrepreneur and sustainability advocate Ali El Idrissi, the founder of UpChoose, views the occasion as a source of enormous waste, with many of the products outgrown in a matter of weeks.

But instead of lecturing people to buy less, he’s providing a sustainable and somewhat affordable alternative.

Body image for Always in fashion

Why it’s hot: With UpChoose, El Idrissi is democratizing sustainability. While sustainable subscription services aren’t new, one targeted to new parents seems to be. UpChoose is a way for individuals to help tackle over-consumption in their lives, while governments and companies attempt to tackle it on the larger world stage. Also, depending on where your live, the option to have temporary baby clothes, and eventually even furniture (his plan to expand at some point in the future), could be a real time and space saver for urban families in cities with itty-bitty living spaces (NYC).

Source: Contagious.io

Puppo Brings Personalization to the Dogs

In an effort to launch in one of the biggest and most saturated markets in the world, Mars’ Puppo, a subscription-based and personalized service for dogs, took personalization to a new level, creating 100,729 bespoke ads for each dog licensed in Manhattan.

Puppo created an algorithm that extracted data from the NYC Dog Licensing Dataset to find out the name, age, breed, borough and zip code of each dog. A modular copy and art direction system then generated an individual print ad for each dog that linked to a health benefit from using Puppo’s services.

Owners were targeted by zip code and print posters were placed within dog-walking distance from their homes. The Every Dog Has its Ad campaign was also promoted by digital OOH and display ads.

The campaign saw a 68% increase in new site users within one week, 28% of which came directly from the posters. There was also a 144% increase in organic searches for Puppo.

Why it’s hot: Clients are always looking for ways to personalize their communications in unique and attention grabbing ways — here, Puppo used a variety of data (licensing information, zip code, dog breed, etc.) to create personalized geo-targeted ads to dogs and their owners. succeeding in grabbing attention and driving awareness of their product in a personalized and relevant way.

Source: Contagious.io

Nike’s New Subscription “Club” for Kids

The latest entrant to the world of subscription boxes is Nike Adventure Club – a sneaker service for kids. Parents of kids aged two to ten years old know the struggle — kids’ feet are continually growing so new shoes are seemingly always needed, but fitting in sneaker shopping in busy schedules and getting kids to make a selection is not a fun process. The subscription service aims to solve this pain point with over 100 sneaker styles that will come straight to customers’ doors.

Nike Adventure Club 2

The service will come in three tiers–ranging from four pairs of sneakers a year to twelve pairs a year. If customers like the shoes, they keep them. When they’re ready for new shoes, they can send back the old pair and Nike will donate or recycle the returned shoes.

Nike Adventure Club 2

True to the lifestyle brand, Nike Adventure Club is about more than shoes. It’s also an exclusive experience parents and kids can share through curated outdoor games and activities each month. KaBoom, a nonprofit focused on encouraging a healthy, active lifestyle for kids, has partnered with Nike on crafting these activities.

Why It’s Hot

The Nike Adventure Club isn’t just another novelty subscription box — it solves a real need for parents and their growing children.

Source

Le Tote: Borrow, not Buy

Le Tote is a new clothing service that identifies itself as Netflix for fashion. For $50 a month, a subscriber can select 3 garments and two accessories online at a time, and return them anytime in exchange for another box. The subscriber effectively borrows these garments from Le Tote and can wear the clothing items without any obligation to buy. If the subscriber really loves the item, she can choose to purchase it at a discount on the site.

Why It’s Hot: While it takes a very similar approach to many subscription services out there, it tunes into the insight that women want to refresh their closets and provides a service at a relatively low cost. Subscribers can also hire a stylist at an additional cost, which demonstrates there is a potential to grow the business as well.