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Netflix shows the world how not to treat your customers by dropping Profiles — Updated: Change of plans
Like many other Netflix customers, I received the “Important News Regarding Netflix Profiles” email this week stating that Netflix “will be eliminating Profiles, the feature that allowed you to set up separate DVD Queues under one account, effective September 1, 2008.” Upon reading it, the claim sounded so absurd that I assumed it was phishing/spam. Seriously.
Sadly, the news started showing up with quotes and claims that the statement may actually be true. “Netflix Eliminating Account Profiles” (on hackingnetflix.com) claims that “Netflix spokesperson Steve Swasey said that the decision to eliminate Profiles is a ‘final decision.’”
Here’s the kicker though; The now famous email ends with, “While it may be disappointing to see Profiles go away, this change will help us continue to improve the Netflix website for all our customers.” Really? How so?
For those not familiar with Netflix Profiles, the feature was somewhat unique. Instead of having a single persona per account, Netflix Profiles allowed a single account (ie., household) to setup multiple profiles (ie., husband, wife, kids, pets, etc.), so that each profile could manage their own rental queue. It also allowed the main account holder (ie. the parents) to review the other profile’s queue (ie., the kids) and set limitations, like whether the profiles were allowed to rent R-rated movies. The feature was amazingly helpful in eliminating arguments about who controlled the rental queue.
Removing features from a product can be a tough decision for any Product Manager. Features that are rarely used are easy to toss aside; But (market differentiating) features that customers love should never be thrown out without helping the customers replace or replicate the same benefit in another manner. In this case, Netflix dropped a much-loved feature, but left their customers without an alternative (other then opening more Netflix accounts, which isn’t a likely reaction for irritated customers.)
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[Update: 2008-06-30] Complaining works! Netflix just announced that they are keeping Profiles:
You spoke, and we listened. We are keeping Profiles. Thank you for all the calls and emails telling us how important Profiles are.
We are sorry for any inconvenience we may have caused. We hope the next time you hear from us we will delight, and not disappoint, you.
3 Responses to “Netflix shows the world how not to treat your customers by dropping Profiles — Updated: Change of plans”
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A few books I'm reading now:
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Crucial Conversations: Tools for Talking When Stakes are High
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Watchmen
-- graphic novel (and an upcoming movie)
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What Got You Here Won't Get You There: How Successful People Become Even More Successful
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The Unwritten Laws of Business
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The Simplicity Survival Handbook: 32 Ways To Do Less And Accomplish More
A few books I'd recommend:
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Naked Economics: Undressing the Dismal Science
by Charles Wheelan -- A fantastic overview of the field of Economics. I was pleasantly surprised by how much I enjoyed this book.
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A Short History of Nearly Everything
by Bill Bryson -- a true tale of scientific thinking throughout history. You'll be amazed by how much we still don't know.
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Freakonomics [Revised and Expanded]: A Rogue Economist Explores the Hidden Side of Everything
by Steven D. Levitt, Stephen J. Dubner -- a fun read offering a somewhat different way of looking at society. Answers questions like "Why do drug dealers still live with their moms?", and what qualities in a parent matter for the success of a child later in life?
-
Getting Things Done: The Art of Stress-Free Productivity
by David Allen. I'm a bit of a GTD freak since reading this, but productivity == $$ (whether you can simply get more work done in a given time, or work less by focusing on the right tasks.)
June 21st, 2008 at 12:30 am
Let Netflix know that you do not approve!
Spread the word!
http://www.keepnetflixprofiles.org
http://www.cafepress.com/keepflixprofile
June 22nd, 2008 at 3:49 pm
Also, send a message to Netflix customer service! The Contact Us page has a form where you can fill in any User Suggestions.
June 27th, 2008 at 9:06 am
Thanks for the heads up. I wasn’t aware of it.
I agree with you completely about (1) the apparent stupidity of eliminating it; and, (2) the “big company” reason they gave for eliminating it, which of course wasn’t a reason at all.
This is all especially puzzling given the facts that (1) profiles are one of the differentiators; (2) the marginal cost of providing them, at this point, is nearly zero; (3) it’s easy for them to assess the value to their customers; and (5) they help tie customers to Netflix (by raising switching costs).
So from both simple economics, with marginal revenue exceeding marginal costs, and from the larger strategic benefit, this should have been an easy decision to make–or not to make, as it were.
The fact that the company then proceeds to put the big company–in fairness, insular organization–spin on their non-answer is especially puzzling.
Not long ago Netflix faced intense competition long ago.
They entire business model is based on the presence of the Web, and they’ve benefited greatly from positive word of mouth.
Wouldn’t it be interesting if someone at Netflix actually posted, somewhere, the real reason? Could this really be as misguided as it appears?
The only thing I can guess is that they are faced with a patent infringement suit. But even then, wouldn’t it have made much more sense to come right out and say, “We’re being held up by someone who owns a patent on a process that we’ve been using. (Who knew it was even patented?) After months of lawyers negotiating, we’re still far apart, so we’re launching a process to let the market determine the price and ultimately the patent owner decide whether he wants that price or not.
“Here’s how it will work: If you want the service, tell us (and the rest of the world)the maximum additional you are willing to pay each month. We’ll use a Dutch auction process, with the results online for all, including the patent owner, to see.
“He can then decide whether he wants to accept this amount or not.
“Thanks for being our loyal customers. We’re on your side, and will follow your instructions.”
That would be a logical solution to the only problem I can imagine they’re facing that would cause them to cancel profiles.
A final note: Why do so many companies, especially in this day of transparency-vogue and hyper-communication choose to communicate with customers in a way that translates into, “We’re canceling something that we know you love (and that doesn’t cost us much of anything to maintain), and we’re not going to tell you why. In fact, we have such contempt for you that that we’re going claim we’re giving you a reason but the reason makes so little sense that even a child would understand that they’re being lied to and called “stupid” to their face.”