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Netflix and Zoom Among 3 Subscriptions to Introduce New Offerings to Grow Customer Loyalty

  • Nadine Ghica & Sabrina Mullens - SUBTA
  • Jun 29, 2022
  • 5 minute read

Netflix, Zoom, and Sweetgreen are all adjusting their offerings to cater to the needs of their respective target audiences.

After experiencing significant subscriber losses, Netflix has reportedly confirmed the release of an ad-supported tier, assisting the company in its efforts to tap into a new market. 

Meanwhile, Zoom announced the launch of its newest subscription offering, Zoom One, which provides six different tiered packages at varying price points. 

Lastly, Sweetgreen — a plant-forward food subscription service — is aiming to foster more meaningful relationships with customers through a new digital program.

Read on to learn how these three brands are looking to strengthen their customer loyalty through exclusive offerings, and how their initiatives support SUBTA Co-Founder Christopher George’s claim made at SubSummit 2022: “2023 is going to be the year of retention.”

Netflix Expands Its Offering to Boost Acquisition & Retention Rates

The rumors appear to be true: Netflix is officially going to release an ad-supported pricing tier, according to The Hollywood Reporter’s coverage of the Cannes Lions festival. 

Co-CEO Ted Sarandos confirmed reports of Netflix adding ads to its offering on June 23, saying, “We’ve left a big customer segment off the table, which is people who say: ‘Hey, Netflix is too expensive for me and I don’t mind advertising,’” as reported by The Hollywood Reporter.

This decision comes after a challenging start to 2022. The streaming giant lost 200,000 subscribers in Q1 — “the first time in a decade,” according to The New York Times — and recently laid off hundreds of employees for the second consecutive month to combat its “slower revenue growth,” a Netflix spokesperson told Variety.

Netflix’s transition to advertising on its platform may benefit the company in the long run. Consumer behaviors show that a majority of on-demand viewers — nearly 60% — would rather consume entertainment with ads and save $4-$5 than pay for the ad-free experience, according to data Hub Entertainment Research shared with SUBTA.

Disney+, one of Netflix’s biggest competitors, announced an ad-supported tier in March 2022 in an effort to achieve its 230-260-million-subscriber goal. While the new feature won’t be released until later this year, the streaming service finished Q1 2022 by gaining nearly 12 million subscribers while Netflix lost thousands.

Netflix’s transition to an ad-supported plan illustrates the importance of staying on top of consumer behavior trends to discover new opportunities and foster customer loyalty.

Zoom Launches Tiered Subscription Offering to Combat Slower Growth

Zoom introduced Zoom One on June 23, which brings together tools such as phone, chat, meetings, and more into six tiered packages (the Enterprise Plus package has yet to be listed on the site). 

The company also announced new multilingual caption features that are only available in select tiers. Translations are currently accessible between 10 languages, including Spanish, Italian, and Japanese. Add-on plans are also optional, and include audio conferencing, cloud storage, and more.

This latest offering comes after Zoom’s stock fell over the past year as more people adapted to the shifts in life after the height of the Covid-19 pandemic, leaving the company to seek new opportunities to strengthen its customer loyalty and acquisition rate.

While Zoom’s revenue increased by 191% year over year (YoY) as of Q1 FY2022, the company’s growth is slowing down, as Zoom reported a 12% YoY increase in revenue for Q1 FY2023.

Zoom President Greg Tomb touched on how implementing this annual subscription offering is “the next step in the company’s evolution,” according to the press release. He also mentioned how Zoom One benefits its users: 

“By bringing together chat, phone, meetings, whiteboard, and more in a single offering, we are able to offer our customers solutions that are simple to manage, so they can focus on business issues that matter most,” Tomb said.

With the introduction of its newest features, Zoom is responding to its target audience’s needs through different price tiers while expanding its global presence with multilingual perks.

Sweetgreen Looks to Personalize Digital Experience to Strengthen its Customer Loyalty

On June 27, Sweetgreen announced the launch of its newest digital feature, Rewards and Challenges, to enhance the company’s current customer experience. The program’s purpose is to encourage consumers live healthier lifestyles by interacting with the brand more often. The initial launch is followed by a marketing campaign called ‘Summer of Rewards’ designed to assess Sweetgreen’s customers needs for personalization, according to the press release.  

Exclusively offered on the Sweetgreen app and website, the program aims to create added value for customers. Sweetgreen’s focus on enhancing its digital experience is a calculated one, as its total digital revenue accounted for 66% of the company’s Q1 2022 earnings. The company stated that it plans to leverage the data gathered during the four-week ‘Summer of Rewards’ campaign to adjust (and improve) its loyalty program, a strategy other subscription businesses should consider, per SUBTA’s intel.

“Purchases from consumers who are part of a loyalty program increase by more than 100%,” according to SUBTA’s State of Subscription 2022 Annual Report. Sweetgreen has recognized this opportunity “as a way to double-down on owned digital relationships and create a more personalized experience for our customers,” said Co-Founder and CEO Jonathan Neman in the press release.

Sweetgreen is also leveraging a partnership with TikTok creator Emmanuel Duverneau to promote its marketing campaign. Relying on influencer marketing can help a business grow its brand awareness and, therefore, customer base, according to SubSummit 2022 Speaker Anais Cowley of The Agency Creative Group.

Customer Loyalty and the Subscription Business Model

Relationships are at the heart of subscriptions, and Netflix, Zoom, and Sweetgreen are conscious of it. Whether it’s expanding an offering to connect with an overlooked segment of the population or focusing on personalizing the customer’s journey with a brand, all three companies are showing their will to cater to modern customers’ needs by embracing change. 

Brands that fail to monitor consumer behavior trends and listen to their target audience will miss out on opportunities to grow and foster customer loyalty. Knowing where your customers’ priorities lie is essential to your success, especially as the 2022 holiday season is approaching.

For example, be mindful of your price point. The number one reason consumers are canceling their subscriptions is because the price is too high, according to SUBTA’s State of Subscription 2022 Annual Report

“The businesses that understand and anticipate the shifts in the marketplace and the new consumer habits will be able to separate themselves from the competition,” said George in SUBTA’s State of Subscription 2022 Annual Report.

Key Takeaways:

  • Netflix Co-CEO Ted Sarandos confirmed reports of the streaming service introducing an ad-supported tier to its existing offerings in an effort to foster customer loyalty and target a customer segment that has, in his words, long been overlooked.
  • Zoom launched Zoom One, an offering that brings together tools such as phone, chat, meetings, and more into six tiered packages. 
  • Sweetgreen announced the launch of its newest digital feature, Rewards and Challenges, to enhance the company’s loyalty program and strengthen its customer relationships.

Looking for more opportunities to market your subscription box business? Get professional advice on how to better your brand by attending SubSummit, the world’s largest DTC subscription conference.