Monday, August 18, 2008

Netflix Customer Satisfaction

Netflix's delivry problems of the last week have been widely publicized -- both by the mainstream media and by Netflix itself. In fact, yesterday when I was on eVite, they posted a prominent message from Netflix identifying me (correctly) as one of their customers and letting me know the status on their recovery. Now THAT is going above and beyond!

It will be very interesting to see how Netflix rebounds from this service incident. So far, they have been a best practice in every respect -- apologizing profusely, providing continous service updates, and proactively offering credits to those who experienced a delay.

So far, their customers appear to be fairly understanding. In fact, as I discovered years ago when doing customer satisfaction research, satisfaction ratings actually tend to be highest among customers who have experienced a service failure in the past -- IF it was followed by stellar resolution efforts by the company that made the error.

Here's what happens. If you never have a problem, you tend to be "passively satisfied," perhaps rating your service provider an "8" on a scale from 1 - 10. But, if you experience a problem -- a double processing of your payment, wrong item delivered, etc. -- they have the opportunity to either hit a home run or strike out. If they rise to the occasion and perform beyond your expectations -- such as not just fixing the problem, but offering you a credit without you even asking for one -- your satisfaction becomes based on something tangible, and often goes up to a 9 or 10.

Of course, this only works so often. Given that this was Netflix's third major outage in just over a year. they may just be pushing their luck.

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