Good storytelling requires clarity

Netflix is one of the world’s most recognisable brands.

If you were asked “what does Netflix sell?”, chances are you’d say movies and TV shows. Some of you may say games.

If you were asked the same question “what does Netflix sell?” 20 years ago, you may have said DVDs.

Both answers are correct on the surface, but scratch the surface and you’ll see that both answers are fundamentally wrong.

This is because Netflix is not in the movies / TV business. Netflix is in the convenience business.

Consider Netflix’s start: offering a DVD-by-mail service. Before streaming was a thing, Netflix was known for mailing its customers movies on DVDs. It’s customers would watch the movie and mail them back once done.

This was in contrast to how people rented movies before Netflix emerged: driving to the local Blockbuster store, browsing the movies stocked in store and then driving home to watch. Blockbuster also imposed punitive late fees for customers who did not return videos/DVDs on time.

Blockbuster’s business was thriving and it was a household name. And yet Netflix upended this storied business by solving 3 unarticulated customer desires:

1. Avoiding the hassle of driving to a store to select a movie

2. Being limited to the titles available in store

3. High late fees

Netflix’s offering allowed customers to pick whatever movie they wanted rather than hope the movie they wanted was available in the store at the time of their visit.

It also allowed customers to hold on to the movies they rented for as long as they wanted to without any late fees. (The only caveat was that customers could not rent a second title until they had returned the first).

Taking the hassle out of renting movies allowed Netflix to drive customer value, disrupt Blockbuster to the point of bankruptcy and upend entire industries.

After all, once you’ve picked the movie and are watching it at home, there’s no difference between the watching a movie rented from Netflix versus watching the same movie rented from Blockbuster.

People were willing to pay Netflix for convenience, not for the film itself.

Understanding the customer problem allowed Netflix to clearly define its value proposition and position itself accordingly.

Netflix applied the same approach to usher in the streaming experience we all enjoy today. Unlike Blockbuster, a company that wasn’t willing to disrupt itself in order to survive, Netflix disrupted its core DVD-by-mail business.

This is because Netflix leaders realised that the consumers who are willing to pay for the convenience of DVDs-by-mail are also the consumers who would be willing to pay for the convenience even greater convenience in the form of on demand movies.

Before Netflix revolutionised content consumption through streaming, consumers were reliant on DVDs-by-mail or linear TV schedules.

Netflix’s key insight - consumer demand for convenience - drove its positioning and how it communicated value to consumers. In other words, Netflix’s storytelling understood the consumer problem it was solving and told its story accordingly.

Such storytelling and positioning is not limited to Netflix: any business of individual can apply Netflix’s approach to drive value.

To apply this to your own pursuits ask yourself what you’re selling. What is the fundamental difference in your customers’ life as a result of doing business with you? This should show up in your storytelling.

Fertility clinics are not selling IVF. They’re selling the joys of parenthood.

Hello Fresh is not selling food. It’s selling convenience.

Rightmove is not selling property. It’s selling a home to be filled with memories.

Driving results needs requires clarity on the value proposition and then strong storytelling to support that value proposition in a way that connects with your target audience.