Funnel Friday’s was a segment adopted by DeepBridge as a way for us to retroactively examine sophisticated marketing activities in a relatable away with companies you’re familiar with so that we can hopefully facilitate the activation of innovative tactics and strategies in your business. We’re a company with heavy blue-chip Fortune 50 brand experience which is relevant to our mission with Funnel Fridays – Give you an inside look at how some of the most untouchable companies think and operate. Your business deserves to be able to deploy the same types of tactics. And we want to make these concepts more digestible and actionable for each of your unique situations. That said, some of these examples will be of failed funnels, some will be glimpses of wildly successful funnels. But all of it will be engaging. Let’s dive deep. If you look up what a “funnel” is, you’ll get plenty of different answers with mentions of marketing conspicuously absent. Merriam-Webster identifies a funnel in the following way: “to pass through a funnel or a narrow opening. : to send (something, such as money) to someone or something in usually an indirect or secret way”. From this perspective, a marketing funnel can come into focus a bit. Let’s walk through together. But first, let’s stop and look at the objective of this post. If you walked away with one message, please let it be the following: Trying to talk to everyone, you convert no one. Your brand or business’s clarity regarding your ideal client and the consumer segment you are targeting for conversion on any campaign is vital to the survival of said campaign. A focused message with a clear consumer in mind has implications that touch many components of performance from early adoption, opt-in rate, lifetime value, virality, and many more. So What Is A Marketing Funnel? The reason funnels are such an integral part of powerful marketing is because they are the adhesive that holds together the customer experience – keyword there being powerful. Without a funnel, you can survive. But a marketing funnel is one of those things where if you have it done properly, your business begins to works for itself. Buried somewhere within your business is the potential to implement a seamless conversion journey that delivers the right message at the right time. But the marketing funnel is only as strong as your ability to deliver the right message to the right prospect at the right stage in their buyer’s journey. If you don’t understand the buyer’s journey or the crucial touchpoints along the way, you lack the proper tools to make a powerful, high-converting funnel. Today we’re going to look at a company who went from belle of the ball to black sheep of the cinematic family. That company is MoviePass. At its peak, MoviePass was a force to be reckoned with. The problem is they are misunderstanding their customers and have a broken funnel. But what is MoviePass you might be wondering. Well, it’s a fairly simple concept with a convoluted execution. With that in mind, this content was interesting enough to us to give you the option to watch or read. Below is a video where you can access the player directly or follow this link and hop over insight the Funnel Friday section for additional information on this deep dive.

What Is MoviePass? I am going to recreate what MoviePass could be likened to by Frankenstein’ing some platforms and services you’re likely more familiar with. Just play along, trust me. Imagine there was a service that took a variety of movies, shows, and documentaries from a mix of the top streaming services like Netflix, Amazon Prime, and Hulu. They claimed to collect the best content of all three to make one big pool of all your favorite, most engaging shows, movies and documentaries. This service would take a healthy mix from all three of the streaming giants. The caveat being instead of you having a full membership to each of these streaming services, you’d only have to pay a smaller percentage of all three e.g., $3 from Netflix, $4 Hulu, and $3 from Amazon Prime. So for $10, you could have the very best content available today. The catch is they only let you stream one full movie or episode every day. How this service makes money is by paying the three streaming companies small pieces of your monthly contract to keep them happy. This service would be MoviePass. (For those familiar with MoviePass who are silently picking the analogy apart, give us some rope it’s simply for conceptually anchoring the concept.) The streaming giants in this analogy would be national cinema chains and local movie theatres. With MoviePass, you pay a flat monthly fee to see movies at most participating local and national cinema chains. You are granted access to 3 movies a month, and never the same movie twice or on premium screens (e.g., 3D). An additional note here, the turbulence MoviePass has endured in the past 12 months has left them shifting their business model and pricing strategy more than a few times so the terms stated above might even be currently in flux. If it sounds too good to be true, in a sense, it is. The giant streaming services would eventually have a response for this tactic and figure a way to squeeze you out. As soon as chains like AMC realized that they were leaving money on the table, they saw MoviePass as a competitor to their business model – more a leech. But certainly not an ally. And it was this realization that exposed the broken funnel that was tucked away neatly at the heart of MoviePass. Funnel Meltdown Let’s get into why their funnel was broken. MoviePass tried to give everything… to everyone… all at once. Here’s what I mean by that. Although in the above description I mentioned you get 3 movies a month, it began as unlimited movies with the only limitation being one movie per day. Back in 2016, I would have called myself a power-user of MoviePass’s services. I was averaging about 3 movies per week. Working at the investvent firm J.P.Morgan in Manhattan, I had to find solace somewhere. And that came in the form of MoviePass which became almost therapeutic in a way. It helped me find an escape in one of my all time favorite passions, cinema. And it did it affordably. I was in one of MoviePass’s most expensive markets but still only spent $40/month… at first. The average movie in NYC in 2016 would run me about $15. Thus, I was seeing approximately $180 worth of movies for $40 per month with MoviePass. It was phenomenal! For movie lovers, we silently looked around at each other grinning thinking, “are these guys serious?” glad to take MoviePass up on their outrageously good offer. Therein lies the issue. Their pricing suited heavy movie goers, but where they made their money were folks who overestimated their movie-going instances and they took the risk that only a small percent of people signing up would breach the break-even MoviePass has plotted out. When Helios and Matheson bought a majority stake in 2017, MoviePass began to tinker with the pricing model even further by reducing the price to an astonishingly low $7.95 per month. This was the nail in the coffin. The offer was now officially too good. MoviePass memberships skyrocketed from 400,000 in September 2017 to 600,000 October 2017. By February 2018, they had jumped to 2 million subscribers. With a 500% growth in subscribers in less than half a year, MoviePass caught the eye of major movie chains like AMC who began to develop their own membership program as a response. KEY INSIGHT: MoviePass became their own worst enemy. They focused more on acquiring customers rather than acquiring the RIGHT kind of customer that leads to a sustainable business. This focus on a key consumer segment would have enhanced their ability to deliver predictably positive returns to shareholders while maximizing value for the consumer. It’s a great example in business of how having an enormous of customers is NOT the goal. Your aim should be to maximize happiness for your ideal client and consumer to create advocates of your brand. MoviePass’s Crack In The Ice Once movie pass realized their model wasn’t sustainable, they did the worst thing possible: backtrack on their main value proposition while users remained locked into their plans. I want to further clarity the magnitude of this error – this would be (a slightly dramatized) equivalent to joining a cycling gym that boasted it had an arsenal of more than 50 Peloton bikes. You’re interested in this gym because you actively sought out gym’s who has a focus on Peloton stationary workouts so you’re thrilled. You show up to your first cycling workout to see the gym has exchanged 48 Peloton bikes for an olympic lap pool overnight. Imagine how you’d feel in that situation. On July 31, MoviePass announced to its shareholders their strategy surrounding “accelerating the plan for profitability”. When I read the transcript of the meeting notes, there were two bullets that stuck out to me that I knew were red flags in days to come: “First Run Movies opening on 1,000+ Screens to be limited in their availability during the first two weeks, unless made available on a promotional basis.” “Implementation of additional tactics to prevent abuse of the MoviePass service.” It was the first time any of the investors or subscribers saw the subscription service truly bleed – leaving people to wonder maybe it is too good to be true. As MoviePass continued to scale, they couldn’t sustain to pay for viewings of headlining titles due to bigger cinemas and studios following basic supply and demand principles – MoviePass’s growth must be indicative of an opportunity. If they wished to continue capitalizing on their business model which the market clearly responded favorably to, they would have to pay for it. It was becoming more and more clear they could not in fact pay for it. But rather than reposition their value proposition and pivot to be able to successfully satisfy customers, they doubled down and continued to sign more people up. In the process, some reported them engaging in… less than transparent we’ll call it, tactics. One example of this that I personally endured was the full scale blocking out of movies on a day to day basis to the point where it became difficult to even use the service once a month anymore. I didn’t accept their failure as a model until August 4th, 2018.

It was becoming apparent to everyone that this ride may not last. But the offer remained too enticing for late adopters who had to get a piece of the pie. For more about the foreshadowing of MoviePass performance, check this out. Let’s get back to the execution of the MoviePass’s funnel now that the stage has been set. The Funnel Hacked Personalized marketing to the individual level is the key to creating loyal tribes within your consumer segments. That’s not always feasible for every brand. But getting as close as possible to that should be the goal. The proof is all in their value proposition. Here below is a screen shot of MoviePass’s value proposition. Let’s break this down as this is truly the key ingredient to their recipe for disaster.

When it comes to value propositions, the power is in the offer. This is the first impression component of your messaging. Imagine going to a networking event where the key contact of a firm you really want to work at will be mingling. If your goal to convince this person that you are the right woman or man for the job, don’t you think it would be wise to do your homework on this person? What’s the first thing you’d do in this situation? If your answer is hop onto LinkedIn and read any articles this person has written, then you are spot on. Alternatively, imagine walking up to that person with no research and just taking a gamble on a topic. Or worse still, having no plan at all and just being as generic as possible. Do you think you have any chance at convincing this person you are the right person for the job if you are vague and can’t relate to them? Your first impression needs to prove that you understand the pains and also make sure the potential customer knows this is for them. Looking at MoviePass’s value proposition, it’s obvious that there is not a key consumer in mind and there is no offer. This is more of a tagline. The main questions running circles in my head are: Who is “us” here? Who is this for? When this is being read, who is head nodding and saying “yes yes yes… MoviePass gets my pain and struggles.” To give MoviePass credit though, I want to list out something I could find anywhere in their publications, assets, subpages, or social media. But I did actually find this in the meta data for the google listing. It’s much better, but still leaves question marks. MoviePass gives you access to new movies in theaters nationwide for a low monthly fee. Again, I am left wondering who is the “you” in this situation? Also, if the unique value they are delivering, or the quick win, is the “low monthly fee”, it actually leaves me more confused considering I am not sure what low means. The consumer who goes to the movies isn’t worried about the price of a ticket. For two hours of entertainment, $12 seems pretty fair. MoviePass’s business model is geared more towards the hassle free ticketing and efficiency with heavier volume movie goers. Their key message structure should be the following: Make it clear how convenient it is to get tickets as this will be an immediate objection and perceived barrier. Make it clear that the price is fixed. Appeal to the perception and draw it has on those who think they will go more than they will. Make it clear it’s about THEIR experience and they own their plan. Words to include to elicit this response would be “on-demand” and “control your experience. At DeepBridge when we help our clients, we target these three key pillars of the messaging model. Develop value propositions and messaging that first identifies who the proper customer segmentation is that delivers the highest opportunity. Then our next major priority is to make that ideal customer segmentation feel confident we understand their pains and problems. Lastly, present an irresistible offer that delivers a quick win for the client while simultaneously providing a path to transformation on their key problems. PRO TIP If you can explain your ideal customer’s problems better than they can, they will be immediately and totally bought into the fact that you can solve their problem. This is a guaranteed approach to shortening your sales cycle. Because they didn’t focus on any customer segments and chose to pursue getting as many types of customers as they possible could without understanding purchase tendencies, they were left slashing prices having a price war with theatre chains like AMC. MoviePass waited until it was too late to model out and calculate they are not able to make up the loss from memberships at the concessions, which is where the real profit maximizers are. Where MoviePass would do well is with indie films where both sides win – indie films, or less known films for that matter, could use the extra bump in MoviePass member support. And to true cinema lovers, had they targeted them for their service, are actually very comfortable in taking a risk on a movie they haven’t heard if they feel it’s been baked into their flat monthly fee. The unlimited nature of the subscription reduces the risk associated with wasting time on a poor film. The Insidious Underbelly Of Omni-Channel MoviePass did have a chance to redeem themselves. Most patrons took their complaints to Twitter. It’s here that MoviePass could have shined and committed to solving their loyal customer’s very reasonable issues. Instead, MoviePass chose to pursue an automation bot. The important thing to note about this bot is how incredibly unsophisticated it was. There were zero instances of it deviating from the same couple lines regardless of the customer comment. In the very least try to go occasionally go out of your way to give someone a person experience and give a human response that is intelligently interacting. The choice to use so heavily a single track auto-responding bot only makes your funnel even weaker and deepen your pains on trust and loyalty. It was critical at that stage of the customer journey that MoviePass earned the trust of their audience back. Instead they made the customer feel like their very legitimate problems didn’t matter to them by using the bot that responded the exact same regardless of content. This became so bad that people created parody accounts that were so indistinguishable in their message back that Twitter was forced to verify the customer service account. I myself fell victim to a fake account trolling me with a ridiculously unhelpful response to a complaint but had no way to know because they it seemed similar to things they’ve said before. Plagued by app outages, poor customer service with months of back and forth struggling to get responses, and shady things happening like the “cancel my account” option being frozen, this was the last thing a frustrated customer wanted to see.

There’s Value In Listening Now that we’ve established where the MoviePass funnel went wrong, let’s look at how the competitor who has been affectionately dubbed “The MoviePass Killer” created a funnel that went wildly right and focused on their ideal customer segment. To set the full picture, it helps to set the stage by mentioning AMC added 100,000 members in 2019 alone bringing their total subscriber count to to 700,000, and rising. The major point of differentiation that a company like AMC benefits from is they can afford to eat any loss they take on their membership plans because they can make it up on the concession sales; which has tremendously better margins. Looking at their value proposition, it’s much more clear than MoviePass’s: Collect memories. Get rewards. It’s very clear that this value proposition is speaking to the moviegoer who goes to the movies for the experience. This also does a good job at signaling to those who frequently see movies that this is the place for you as we reward those who come to see films often. Might as well collect benefits while you do it. What has made AMC so wildly successful is they listened. They heard the complaints of MoviePass members loud and clear and developed messaging strategies woven into the framework of their sales copy. I’ll list out the AMC sales copy below and highlight in yellow the spots where they solved their ideal customer’s problems directly from listening to their consumer insights. MoviePass woes and weaponized them to significantly grow their service. “Step up to star status and see a movie with us up to 3 times every week. There are no blackout dates. You could have a triple feature in one day or watch movies throughout the week. If you really, really like a movie, watch it again and again.” “Choose from the latest lineup of movies playing now or coming soon to an AMC near you. Benefits reset every Friday morning, so you can check out the latest movies every week.Our biggest and best experiences are included. A-List lets you choose Dolby Cinema, IMAX, RealD 3D, PRIME, BigD® or digital because A-Listers never compromise. “Reserve a ticket online or at the box office for FREE as soon as it becomes available, even for the biggest blockbuster on opening night. Hold up to 3 reservations at any time.” “AMC Stubs Premiere™ benefits are complimentary for A-Listers. Enjoy 10% back on food and drink purchases, FREE size upgrades on popcorn and fountain drinks and priority lanes at the box office and concessions.” This is such a powerful example of a business weaponizing a bold pivot on the back of improved solutions that were guided from consumer insights. GOES TO SHOW YOU THE VALUE OF CONSUMER INSIGHTS AND UNDERSTANDING NOT ONLY WHY THINGS WORK, BUT MORE IMPORTANTLY WHY YOUR BUSINESS IS LACKING Hopefully this proves the value of consumer insights and understanding not only the “why” things work in a campaign, but why something didn’t convert or sell so you can micro target a problem to optimize the customer experience. P.S. Bonus Funnel Section In an effort to showcase the flexibility of a sales funnel, I wanted to include this note about using funnels for offense and more direct customer acquisition. To really perpetuate the MoviePass subscriber leak, AMC should target MoviePass members for a limited time in which they’ll buyout anyone who has an annual plan and deduct it from Stubs annualized. That sure would speed up the switching activity! Executionally, it would look pretty simple – all you would need to do to start is target MoviePass hashtags and public complaints. It would go viral if you pursued this enough and the value would be apparent to any existing MoviePass members.

Conclusion If you got this far, thanks for sticking around and we hope you had as much fun working through this as we did creating the content for you. Funnel Friday will have elements that are highly technical, but at the same time very relatable. Next week we transition to a funnel that in my opinion, is one of the most effective and sophisticated funnels I’ve ever come across in my career – The Amazon Funnel. You’re not going to want to miss this one. Be sure to subscribe to be notified when we drop a new content series video – I personally guarantee you will not get any emails for anything other than that. Like, comment, or please share this content if you found any of it useful to your business or business of someone you know. It helps us understand what information you find useful and helps deliver value to you. See you next Friday!