Thursday, September 22, 2005

Fast Company Cover Story on Netflix

Hacking NetFlix got tipped off to the cover story on Netflix in FastCompany magazine, for winning the "Customers First Award." It's an educational article, which Mike calls a "must-read."

Here are the highlights that I found interesting:

"Warehouse workers--those closest to the customer--get free Netflix subscriptions and DVD players in order to understand what customers go through when Finding Nemo doesn't arrive in time for their kid's birthday party."

"Hastings brags that during Netflix's early days, it had 115,000 customers and 100 support reps. Today, the company has 3.2 million customers; their questions are handled by just 43 reps."

"That ratio is impressive, to be sure, but the fact that Netflix's customer-support number is deeply buried on the site certainly keeps those numbers down. (Can't find it? It's 888-NETFLIX.) That's one of a few glaring flaws in Netflix's experience--having to dig for a company's phone number on its Web site feels so 1997. Hastings doesn't agree. "It hits the right balance of customer satisfaction and cost," he says. "

"Another problem for Netflix is its relationship with high-volume renters. These highly vocal customers, who aren't profitable for Netflix, believe the company is intentionally slowing down the pace at which it sends them movies, a practice these users call "throttling." Hastings says these film buffs do get lower priority than low-volume members if Netflix is in short supply of a DVD or if one of the warehouses gets overwhelmed with demand. But he denies any other penalizing of these members. "We're not saying they're bad because they watch a lot of movies," says Hastings. "God bless them, that's fine. But if we run short, it makes more sense to give it to the people [who haven't watched as many]."

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