Customer Engagement: What Startups Can Learn From The Major Digital Players Like Netflix

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As an early-stage startup looking to grow as organically and smart as possible, what marketing strategies can be employed to onboard that crucial first wave of customers?

Recently I had a video conference call with an EMEA Client Services Manager at Linkedin. We discussed how their SSI (social selling index) was used to “rate” the quality of engagement on Linkedin’s Sales Navigator add-on. One point he made, that I agree with immensely, was about the importance of targeting warm leads – rather than the mass-produced, spammy outbound sales marketing tactics that most big corporations rely on; or, the free email utilities that are convenient but limited. Surely in today’s “smart” tech world, we can find a way to target our prospects intelligently?

The “Something For Nothing” Economy

Linkedin’s brilliant new prospects search engine allows filters and “insights as selling”: ice-breakers to create warm leads immediately. Offering meaningful content like this for free, I believe, is the way forward.

The example par excellence of this “something for nothing” economy is Netflix. You can currently sign up for instant access to the entire Netflix catalog of TV shows and movies for 1 month. The smart thinking behind this is obvious. The internet provides us with so many choices, the market is so extensive, that it is easy for consumers to jump ship or simply go for the cheapest possible option, regardless of any other soft incentives on offer or quality control.

One way, for businesses that rely on memberships, to tackle this is to offer high-quality content for free. Amazon also does this, with its premium Amazon Prime service: You get free premium membership services for one month. The logic is simple, albeit risky. If consumers like what they experience, they will be willing to pay for it, once they have gotten used to the convenience of it. That’s the hook.

What is risky about it is that traditional marketing spends/budgets and the ROI models that evaluate their success rate metrically (CPA = cost per acquisition), would discourage business owners in potentially decreasing their net profit margins due to the free content being given away. If you “give away” 1 month of access, then, so the thinking goes, you are losing one month’s worth of subscription fees. But the new models of sharing as selling and freemium access (another name for “giving away limited features” or “limited access”), allows service-users to get used to the convenience of a product, integrate it as a new internal workforce process (if it’s a commercial product) and then be willing to pay for its continuation/renewal at the end of the trial.

The only way high production cost/high-quality content providers can compete with cheaper alternatives (some of them permanently “free”, i.e. illegal like torrents) is to provide potential customers with their services/products for free.

Take-Away For Startups Looking To Growth Hack

I think over the next couple of years we are going to see more companies moving towards this model. Consumers of the 21st century are smart consumers – who are not just health conscious or care about green technology. It’s time for startups to get smart with their engagement, learn their lessons from the big players (LinkedIn, Amazon, Netflix) and offer something for nothing.

The net gain from this will be smart consumers returning the gesture by eventually opening their wallets and rewarding companies that care, with their loyalty. The lesson for startups is clear from this model: growth hacking and onboarding your first generation of customers is possible as long as you are willing to take the risk and give away something of yourself/your business for free.



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