Getting fired up about SEO (Search Engine Optimization) or social media is sometimes challenging as a SaaS business. The fundamentals of delivering an excellent product and keeping customers happy give any company staying power. Even Netflix, the world’s most popular subscription-based video streaming service, would tell you that it is not their investment in SEO that keeps them thriving — but their massive library of videos and original programming.
Netflix is one of the most successful businesses in the world
Founded in 1997, Netflix has grown from a DVD rental company to an international streaming video service with 125 million members in more than 190 countries.
Netflix’s success is not just due to its incredible growth and popularity. The company is also known for its unique culture and management style. Netflix is one of those rare companies claiming to have built a successful business by following its rules instead of the conventional wisdom offered by other companies and industry experts.
Netflix is a fantastic example of how a business can be exceptional at operations and continuously improve while growing incredibly fast. Here are 14 key lessons that SaaS businesses can learn from Netflix, which we have detailed below
1. Have an unclouded vision and mission statement
Netflix has a simple mission statement: “to improve people’s lives by giving them the power to decide what they watch.” Anyone can relate to and understand this, making Netflix an accessible brand for customers to identify with.
2. Keep it simple.
Netflix has built its success on providing a simple service: watch popular movies and TV shows whenever and wherever you want. By keeping things simple, Netflix makes it easy for its customers to find what they are looking for quickly and easily. SaaS companies can also apply this same principle to SaaS businesses: by focusing on solving just one problem, your product becomes easier for customers to understand.
3. Invest in technology that provides value
Netflix has invested heavily in technology to provide its customers with the best possible experience. They have developed their recommendation engine, which powers the famous “You might also like” feature and helps them streamline their user experience across multiple devices. They have also invested heavily in creating high-quality original content such as House of Cards and Orange is the New Black — all of which are available for streaming instantly through their platform.
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4. Use data to drive your free trial process
Netflix knows that the first 30 days are critical for getting users hooked on their product and signing up for paid subscriptions after the trial ends. That is why they built in several features that help users get the most out of their free trial experience: personalized recommendations based on viewing history and interests, easy subscription management with auto-renewal turned on by default, and email reminders for when trials are about to expire, so users do not forget about them (and lose access).
5. Design with your target personas in mind
Netflix knows its customers’ needs better than anyone else because it designed its product based on those needs. When planning your product, do not just think about what is cool for you as an engineer or designer; think about how it will impact your customers’ lives and make their lives easier and better.
6. Personalize your product
Since the early days, Netflix has been personalizing its users’ experience by recommending movies based on their viewing history and other factors such as their location or tastes in music and books. It makes them much more effective at driving engagement and retention by making people feel like they are getting something special from Netflix that they cannot get anywhere else like they are part of an exclusive club where everyone likes what they like (or at least something similar).
7. Automate support processes wherever possible
Netflix has built a great customer support experience for its customers. They have automated the process of answering frequent questions so that when you contact them, it is with a real person ready to help you solve your problem.
The key lesson here is that automation can increase efficiency and reduce costs while improving the customer experience. In this case, Netflix has automated its support processes to focus on providing better service and faster resolution to their customers’ issues.
8. Create a great marketing strategy
Netflix does not rely on salespeople to sell its products. Instead, it invests heavily in content marketing and advertising campaigns that target specific audiences based on their interests and preferences. This strategy allows Netflix to reach more prospects who will likely become customers than if it relied solely on salespeople to do the job for them.
9. Focus on what makes you unique
This is one of the most important things to do as a SaaS company. The world is full of generic software companies that offer related products. Instead of competing with these companies on features, focus on what makes your product unique and determine how to use this aspect as part of your marketing strategy.
10. Be customer-centric
Netflix has always been focused on providing an exceptional experience for its customers — even at the expense of short-term profits and revenue growth. The company took great pains to ensure that its website was easy to use and offered high-quality streaming videos from day one. It also invested heavily in customer service and support, even when doing so meant sacrificing profits. This commitment to customer satisfaction paid off over time as more people signed up for services like streaming video or DVD rentals via credit card or PayPal payments.
11. Don’t be afraid to take risks
Netflix began as a DVD rental company, but they quickly realized that streaming video was where they needed to focus their efforts. They have changed their entire business model, transitioning from a physical product to digital goods, which paid off in spades.
12. Keep an eye on costs
Over time, Netflix has changed its pricing structure to keep costs down while keeping its customers happy. The company also keeps an eye on other services’ pricing models to stay competitive while continuing to offer value to its customers.
13. Think global, not local
It is tempting to focus on your home market when first starting, but if you are looking to scale fast; you need to think globally right from the start. Netflix has operations in 190 countries, so it is no surprise that they were able to adapt quickly when they decided to get into video streaming back in 2007. They already had a presence around the world, which made it easy for them.
14. Hire people who are passionate about your product or service
Netflix hires people who love movies and TV shows — and it shows in their work. The company offers employees unlimited vacation time and unlimited maternity leave, so they can take time off when they need it most. And because employees are so passionate about what they do, they tend to stay with the company for a long time, which ensures continuity when new executives come onboard (and helps them avoid burnout).22
The best takeaway here is, again, the focus on the customer. Netflix’s entire business model is driven by this imperative, which is why other businesses have found success following its lead. From Netflix’s example, SaaS businesses can learn a lot, not just about running a great business but also about becoming a leader in the field. If you are feeling inspired and ready to apply some of these lessons in your own company, take the first step by taking a close look at what you can glean from Netflix’s example and putting some of their tactics into practice.
Rakhin has over 10 years of experience driving business development and client services. In his prior roles, he stayed close to customers to understand their requirements and help them achieve their business goals. He is passionate about customer success.
Published August 29, 2022, Updated August 29, 2022