Netflix price increase announcements are not something that I’m looking forward year after year. As a customer, I want to be mad because of the price surge, but for some reason I’m not mad at them. I’m mad at me for not reacting enough to the price changes. If there was such a thing as a consumer psychiatric condition, I will probably be diagnosed with something like “borderline inelastic brand equity syndrome”. I wait for the announcements and start negotiating with myself, not with Netflix. It could be because I have invested so much time creating that powerful list of content to watch later. I sometimes spend more time adding stuff to the list than watching the movies and series. They may increase the price, but I do not want to cancel the subscription and lose all the work I have put into creating my entertainment plans . Then I make the case that is not about being loyal to Netflix, it is all about being loyal to the investment of time I have made when curating content for future occasions. Any excuse will work.
But something strange happened back in mid January 2019, Netflix had decided to once again increase their prices and this time I was not going to take it anymore. I reached for my television remote control to access the application, research how to cancel the subscription, and there it was. I had just purchase a new Sony Bravia television, and the marketing team at Netflix had found a way to license their logo and created a shortcut in my brand new remote control. The co-branding relationship between Sony and Netflix and the direct association to their brand equity is something I had not stop to think when I was convinced that Netflix was going to be part of my life forever. But that historic price increase was something I did not foresee.
It may be me, but I had just purchase the television, and the big white button in the remote control is something that I don’t want to have if it is going to be non-operational. I was getting ready to give Netflix another chance. The button in my new television remote control, the ability to create a customized content list for future entertainment were some of the reasons. And did I mention that my entire family have profiles inside my account, so cancelling Netflix is not something I can decide on my own, it is a family decision.
When it comes to understanding how everything is connected in the Brand Value Chain this is the perfect example, and it happens to all of us with one product or another. An apparent seamless marketing decision (seamless to the customer) that aims to create resonance to a brand, either by personalizing the experience, and reinforcing the value while creating great brand associations, influences the customer mind-set, delivers brand performance in the form of Price Premiums, Low Elasticity, and as a consequence creates Shareholder Value.
The day after the price increase announcement, Netflix’s stock value rose 6.5%, as can be seen in this chart from Recode.
So next time someone wants to question how branding and marketing decisions are contributing to the bottom line of your organization, I give you permission to print this blog post and even download the picture to proof your point. If it sounds that I was trying to create some Personal Brand Equity there, it is because I was. Wink.
STATUS: It is not enough to give me a good product. Give me a product that makes me feel that I am in control.