But the customers were happy, and a vast majority continued after the free trial period. Nevertheless, it was a completely untested model at the time and subject to much debate in the young start-up. Today, free trials are a completely common practise for thousands of subscription companies worldwide. If the subscriber does not unsubscribe during the trial period, the paid subscription will continue. In other words, subscribers must submit their debit card information already when they sign up for the free month. But how do you get them to pay after the free month? The answer for Netflix was ‘negative option’. It made good sense to let the customers try the service before they decide if they wanted to pay. One of the methods to get so many of the customers to try the subscription model was a completely new and exciting approach: Try the first month for free. An incredibly high conversion rate.Īs early as February 2000, Netflix decided to drop the old rental model altogether, only to offer subscriptions. In fact, 80% of the customers presented with the subscription model chose to purchase a subscription. The new model outperformed the old transaction-based rental model by a factor of five. All that was left was to wait for the customers’ verdict – and it was overwhelming. Therefore, the company decided to launch all three at once.
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