Customer behavior is changing quickly, favoring convenience over physical networks or fees. Companies must change with customers to stay relevant. For example, Netflix transitioned to digital services, competing on convenience rather than physical inventory limits or fees. This allowed Netflix to become the preferred way for customers to access movies and TV shows, reaching customers through any device. Companies must maximize convenience, develop complementary services, and create switching costs through personalized experiences to adapt to shifting customer preferences.

1. What does changed customer
behavior mean for businesses
that don’t change as well?

2. • A physical network
• Fee and Value conscious consumers
• A wired customer base
Imagine this Company

4. • Digital overcame physical inventory limits
• Netflix competed on price and fees
• Digital services created new value
• Netflix was more convenient
What Happened?

5. Behavior Can Change Quickly

6. • Maximize convenience to minimize desire for new
services
• Continue developing complimentary services to support
the physical network
• Create Lock-in through reliance on saved profile
information, preferences and rewards that raise switching
costs
Implications

7. This was the great cross-channel
innovation that started it all
Clearly this is their priority
http://www.fastcompany.com/blog/kit-eaton/technomix/could-netflix-run-us-postal-service

8. “People like you”
intelligence + Gotta wait for a
explicit ratings x
High x couple of days v.
x x quick drive home x
Satisfaction and Value
x
x
Can pay with cash x
End on a bang, not
x x a forgettable
Med x Logging on to Web
x experience
site v. driving to store
x
x Return on your own
schedule v. steep
x x x x x late fees
x
x x
x x
Low
Go to the source
Decide & buy
Need a movie?
What to see?
Will we like it?
Explore options
Need a suggestion
Browse related
Find time to watch
Sit down & view
Return to source
Get it home
Tell someone
Web
Mobile
Social
In-Person

9. Partnership with
stream to living
boxee enables
Facebook widget
x
Tell someone
x
room
Return to source
x
x
Sit down & view
x
x
Streaming movies
Find time to watch
x
x
x
Get it home
on demand
x
x
x
Decide & buy
Browse related
x
x
Need a suggestion
x
x
Explore options
x
x
x
x
Will we like it?
Go to the source
x
x
x
What to see?
Need a movie?
x
In-Person
Social
Mobile
High
Med
Low
Web
Satisfaction and Value

10. How does Netflix make sure they
get to the living room TV before
anyone else?
An Important Question

11. Oct. 26: “10MM North American
Playstation owners get Netflix streams for
no extra cost
Clearly this is their priority

12. • Craig Konieczko
• Strategist, LBi IconNicholson
• 347-526-7943
• Craigkon1 on Twitter
• ckonieczko@iconnicholson.com
• www.lbiiconnicholson.com
LBi IconNicholson