Sunday, August 19, 2007

Post from techdirt

NetFlix Hopes Good Customer Service Will Keep Mail Boxes Stuffed With Red Envelopes

from the nice-talking-with-you dept

Although Blockbuster sat on its heels for a long time while NetFlix gobbled up market share, the company has aggressively fought back this year, prompting a lot of pain at NetFlix. NetFlix stock has been pummeled lately as its been drawn into a price war in order to stem customer churn. The problem is that its business model is easily replicated, which partly explains the company's attempt to assert a patent on it. However, the company does appear willing to actually compete, which is refreshing. The New York Times reports on the company's unorthodox decision to offer customer support services from friendly sounding Oregonians (as the company puts it), rather than rely on offshoring or email support. Although this is an expensive move, the company feels it will prove to be a key differentiator as it battles back Blockbuster. Obviously, good customer support means happier customers, while bad customer support can turn customers away. But the lesson isn't that companies should immediately stop all offshoring of these services. Rather, it's important for companies to think of customer support strategically and weigh the various costs and benefits, rather than just going on the lowest-price option.


My thoughts; Back when I used to rely on Blockbuster for my video and then later DVD entertainment, it was a common pain to be called by their automated service claiming I had media to return.  Often the calls would come during my rental period and other times I would receive them after returning said videos.  Additionally, how many of us got bit hard by returning a few movies one day late and being charged 3 or 4 dollars per video.  Since moving to NetFlix shortly after they came online, I rarely have to go to the video store to pick up a movie.  NetFlix has been awesome to me as a customer.  I think it has only happened twice, but when a returned movie gets lost and they just forget about it and move on, you thank the good Lord that you are dealing with NetFlix and not Blockbuster.  I love that they are using Oregonians for customer care, I happen to think they are the nicest people as well especially since i am one.

I would pay more for Netflix to use them over Blockbuster any day.  I am looking forward to their streaming service working for the Mac, that will make me very happy. 

Death to Blockbuster, Long live NetFlix.

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