From inflation to segmentation and from pricing to platforms, the Accidental Marketer podcast covered a lot of ground in 2022. Whether or not you tuned into every episode, we hope you enjoyed these conversations and gathered some marketing insights as well. Do you have a favorite story from this year? We certainly do.
On a special episode of the Accidental Marketer podcast, we recapped our three favorite stories of 2022: the good, the bad and the ever-evolving. Join us for a look back at the learnings of the last 12 months and the wisdom we can gain from these stories.
Netflix: A price hike gone wrong
Netflix has changed drastically through the years, adapting its business model from a mail-order DVD rental to the streaming behemoth it is today. But alongside its more pioneering updates came unwelcome shifts.
In January 2022, Netflix raised the price of its basic streaming plan from $8.99 to $9.99, and the standard plan, including HD streaming, jumped from $13.99 to $15.49. (As of November, prices jumped even further.) At a glance, these increases of $1 to $1.50 per month may not sound like much — in fact, they might seem downright reasonable.
But the customer response was swift. Netflix lost around 970,000 subscribers in 2022 as of its Q2 earnings report. The streaming giant also saw a more than $50 billion market capital loss to its stock price — all due to a price change of a dollar or so per month.
What went wrong? On the one hand, the price increase seems a somewhat natural response to inflation and the company’s lifecycle. But when we look deeper, we can see that Netflix misinterpreted pandemic-driven subscriber growth to mean that the company was in a different stage of growth than it actually was.
While stuck at home, consumers looking for entertainment options turned to their televisions and laptops, of course. But as it emerged from the conditions of the early pandemic, Netflix increased its prices with unearned confidence. The company failed to account for a lack of differentiation in its offerings and the steep competition posed by newer streaming services.
Netflix missed the mark by mistaking a mature market phase for a growth phase.
What can you learn from this misstep? Look closely at your metrics. Instead of taking them at face value or assuming the cause of business growth, go deeper to truly understand where you are in your lifecycle.
Amazon Prime: Adding value, keeping customers
Not all price increases are created equal.
Another high-profile brand also hiked fees early this year when the annual price of Amazon Prime went from $119 to $139 in February, the company’s first such increase in several years. But rather than leading to outcry, the $20 change was met with customer acceptance, and Amazon didn’t lose any major business.
Amazon followed a framework of create, communicate and capture. In conjunction with the price change, Amazon added new offerings, such as same-day delivery in metro areas and additional free shipping options. The company had invested heavily in new entertainment avenues, such as exclusive Thursday Night Football live TV events and shows like “Wheel of Time,” “Jack Reacher” and “The Lord of the Rings: Rings of Power.”
Next, Amazon clearly communicated the value of these new offerings to consumers, which allowed the company to capture (and keep) customers’ business.
The Amazon Prime membership program began as just a free shipping play. Based on how much customers ordered from Amazon, they could clearly calculate the purchase threshold at which Prime paid for itself.
But through the years, the value of Prime deepened through its various additional offerings as Amazon invested in bringing more value to customers. As a result, the proposition of a $20 annual price increase is far easier to defend and develop than a similar price increase for a streaming-only service that has remained somewhat stagnant in a highly competitive market.
Remote work: Merging two worlds
One of the biggest lifestyle changes of the past several years took place in our work lives, which make up half (or more) of our waking hours.
Starting in 2020, organizations rapidly adapted their business models to accommodate virtual meetings and on-camera conference calls. This move to the virtual world (the impact of which still remains) meant that workers lost much of the intimacy of face-to-face gatherings. But virtual meetings can still provide elements of personal interaction, along with other positive evolutions.
For instance, a virtual-friendly work environment revolutionized sales. Previously, much of the sales process required travel and time commitments that fell away when sales calls turned virtual. Remote work also allows sales conversations to involve multiple stakeholders whose input might otherwise be unwieldy or impossible. Now, someone from product, engineering or customer success can quickly jump on a sales call with minimal hassle, leading to more informed and productive conversations.
Virtual sales calls also simplify record-keeping: Attendees can simply record online meetings, which lets teams revisit meeting insights at a later date.
One of the most powerful changes in the sales world is the improved collaboration between sales and marketing. Both teams can tune into the customer experience and exchange more closely, making space for more effective collaboration and innovation.
Marketing should advocate for the customer’s perspective, representing their views on topics like pricing and product development. A remote environment lets marketing teams get more involved in customer interactions through reviewing sales calls or directly interfacing with customers without having to be in-person.
Marrying the sales and marketing worlds offers massive potential for businesses to improve the customer experience, and the remote world will continue to pave the way for this “new normal.”
The more things change, the more they stay the same
In 2022, we’ve seen businesses continue to adapt to the rapidly evolving conditions around them. Yet many of the principles of listening to and learning about the customer are evergreen.
We can’t predict what 2023 (and beyond) will bring. But innovation, optimism and structured plans for growth are some of the best tools to have in your belt — and companies that put them to good use will go far.