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Why Does Netflix Hate Their Best Customers?

Lately I’ve been feeling a little like a jilted lover in my relationship with Netflix.  I’ve adored this company since joining during their infancy over seven years ago.  I love efficient websites that really make my life easier and more fun – and Netflix has always been at the top of my list. Before they became a household name I was constantly singing their praises – especially to other frequent flyers that were very curious about the DVDs in the little red envelopes I carried.  I suspect over the years I have talked dozens of people into joining, and it was no surprise to me to see the company become so successful.

But apparently Netflix does not share the same affection towards me.   A couple months ago I began to fear I had been placed on the dreaded “slow ship” list.  I heard the rumor that customers that rented too frequently were sometimes forced “down the queue” on new releases so new members could receive movies more quickly, but I had not personally experienced the phenomenon.  Suddenly several new films on my list showed “VERY LONG WAIT”, and instead of sending me “Sicko” that I really want to see – Netflix dug deeply into my list to instead mail an old Adam Sandler comedy I had stuck at the bottom of my queue during some serious lapse in entertainment judgment. (My advice, don’t drink and pick movies at the same time!) 

None of this made any sense to me.  While I could appreciate the fact that Netflix wanted new customers to be happy so they remain customers, why wouldn’t they especially love the client that had stayed with them for over seven years, spending between $180 and $300 per year while singing their praises?  Netflix is essentially a direct response company – something I know quite a bit about – and their business model is really rather simple: Cost Per Acquisition – Average Sale – Lifetime Valuation.  They had already acquired me, I helped them acquire many others at no cost to them, and I was a high average sale with a terrific lifetime valuation.  So why did Netflix hate me?

To find out I first sent an e mail to their customer service address.  A day later I received a polite reply thanking me for my e mail, but also informing me that due to the large volume of customer service e mails they receive, I would most likely not hear from them.  I had to wonder why they even offered the option of emailing customer service if they had no intention of answering me.  It seems more like an anti-customer policy.

Next I called their customer service line, and was able to speak to a representative who seemed quite familiar with my complaint.  I anticipated they would look at our long-standing relationship, offer an apology, and put my account back on the “fast ship”.  Instead, the somewhat irritable operator informed me that “we have no obligation to send you any particular movie – we just have to send you movies”.  When I inquired what “VERY LONG WAIT” actually meant, he said I could probably expect the movie to ship in around fifty days. “Fifty days”, I exclaimed, “by then I will have Tivo’d this off HBO!”

“Read your terms and conditions, and if you don’t like it I can cancel your account”, he flatly replied.  Wow Netflix, it hurts to be dumped so rudely by someone you loved so much.

Just to make sure I was not misreading the situation (perhaps there was a strange worldwide run on Michael Moore’s latest film and Netflix legitimately could not send me one), I opened a new account for my wife and put my three most desired but “VERY LONG WAIT” films on her list.  Much to my surprise they were all immediately available to ship, and 24 hours later “Sicko” was waiting in my mailbox.

Since then I did a little additional research, and discovered that the blogosphere is filled with other spurned Netflix lovers.  In fact, there are websites devoted to complaining about Netflix’s practices, which the critics call “throttling”.  I am certain that the number crunchers at Netflix have some financial justification for their actions, but a successful brand is much more than optimizing numbers.  And in this Web 2.0 time, companies have to be particularly sensitive towards their customer service policies.  I also know that it is always bad business to blatantly discard your most devoted customers – even if they do rent a few more movies a month than the average member.

And while I am sad that Netflix doesn’t love me anymore, I’m not going to let it haunt me. I might just have to exchange those red envelopes for yellow ones.  Hey Blockbuster, interested in a long-term relationship with a very faithful movie lover?

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