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Extensive consumer research is just one facet of Net ix’s competitive edge.
Extensive consumer research is just one facet of Net ix’s competitive edge.

Six lessons business owners can learn from Netflix

Steven Van Belleghem explores how streaming service Netflix has found enduring success through its rigorous focus on customer experience and satisfaction.

Founded in 1997, Netflix is considered quite old by technology-firm standards, but it has been able to reinvent itself several times since then – evolving from a DVD mailing service to a streaming service and then a production studio.

Today, it is the ‘king’ of frictionless, tailored and joyful customer experience, which businesses across many different industries can emulate.

Take your product very seriously

Netflix has identified entertainment as a human need, which feels extra relevant in these lockdown-filled times.

It describes its mission thusly, “Entertainment, like friendship, is a fundamental human need; it changes how we feel and gives us common ground. We want to entertain the world. If we succeed, there is more laughter, more empathy, and more joy.

“We want to entertain the world.”

How’s that for an ambitious mission?

Know what you sell
“Netflix must constantly battle for attention, and therefore has no other choice but to offer the absolute highest-quality experiences and products.

At the same time, Netflix management realises that on a deeper level, they actually sell attention rather than entertainment. The company does not only compete with other streaming services, but also with anything that takes consumers away from its service, such as video games.

This has tremendous repercussions; Netflix must constantly battle for attention, and therefore has no other choice but to offer the absolute highest- quality experiences and products.

Measure, test and repeat

The Netflix model means being obsessed with customers.

Gibson Biddle, former vice-president of product at Netflix, has said, “At Netflix, the customer is constantly under scrutiny – not just through analysing personal profile data to better recommend the right movies and series, but just as much through focus groups, usability sessions, one-on-ones and demographic or cancel surveys and then A/B testing the assumptions that flow out of these inputs.”

Netflix refers to this process as ‘consumer science’, which is the driver behind their ultra-tailored experience and it’s also the reason why in-house content – such as Black Mirror and The Queen’s Gambit – is so popular.

As CEO Reed Hastings says, “If the Starbucks secret is a smile when you get your latte, [Netflix’s secret] is that the website adapts to the individual’s taste.”

Focus on joy

Alongside consumer science, Netflix also places emphasis on customer service.

In addition to a wide range of self-help solutions, English live support is available 24 hours a day through live chat or phone. Customer service also focuses on joy instead of second-guessing the customer.

A recent example was of a Netflix subscriber who was watching a series and noticed the sound was garbled at one point. Unprompted, Netflix sent an email the next day with a small credit to be applied to their account, as an apologetic gesture for the disruption.

This is customer service done right; if something goes wrong, don’t wait for the customer to call to fix it; fix it before that, and make them feel good in doing so.

Remove friction and frustration

When Netflix started as a video rental service, Hastings was obsessed with “making the movie experience so much better than the regular video rental, that everyone wants to do it.”

Its strategy eliminated:

  • Going to the video store – Netflix mailed DVDs to its subscribers
  • Product selection – The business was able to offer a wider range of titles and had more copies in stock than a standard video store
  • Late fees – A monthly subscription removed late fees and lowered prices

Following on from its first iteration, Netflix reviewed its customer journey and foresaw that streaming could easily solve all frustrations even better.

Happy staff make happy customers

Though not all great customer experiences are rooted in great employee experiences – see Amazon warehouses – Netflix views employee happiness as a competitive advantage.

The company has stated on its website, “We have great people working together as a dream team. With this approach, we are a more flexible, fun, stimulating, creative, collaborative and successful organisation.”

Not only is this smart ‘branding’ – making Netflix an attractive place to work for talented potential employees – but it also fosters an innovative environment where the focus is on continuously improving for the benefit of customers.

 

 

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ABOUT THE AUTHOR
Steven Van Belleghem

Contributor •

Steven is a business consultant and keynote speaker, specialising in customer experience and the future of marketing. Visit: stevenvanbelleghem.com

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