Qwikster: Netflix’s Customer Expectation Management Move

So Netflix announced yesterday that they were splitting their DVD business off into Qwikster.

The internets have been up in arms about the split of the DVD business, and in particular about though about the websites being completely separate. Many people have made a huge deal about this comment:

Is Netflix making this transition in a perfect way? Nope. But I’d argue there is no perfect way to make this transition. As they say in their blog entry, they’d rather make the change earlier rather than later. I’d wouldn’t be surprised if Netflix offers an option on Netflix where they’d link to the video if it is available on Qwikster if it isn’t on Netflix, and vice versa.

But where is this a winner? Branding. Instead of trying to sell Netflix as both streaming and DVDs in the US. Netflix is now only streaming. Qwikster is only discs by mail. The Netflix folks want the Netflix name associated with streaming, not discs by mail. Instead of waiting until its too late to separate the brands, they’re doing it now. The strong example they use for this is AOL. People associate AOL with dialup internet, not with the content provider that they are now. (This is why AOL’s content sites aren’t branded with AOL.)

Netflix splitting DVD rental off into its own site as taking care of what is likely one of the biggest disconnects that they have on their service, which is what videos are available in what format.

I ran into this myself back on June 25th. I had recently gone to streaming only after having been a DVD or DVD and streaming customer for somewhere around ten years. I ran across The Adjustment Bureau and I wanted to add it to my Netflix queue. I found the movie on Netflix and I couldn’t add it to my queue because it was only available on DVD. I was furious, I thought to myself, “WHY THE HELL CAN’T I ADD THIS TO MY DVD QUEUE??” As all irate customers are supposed to do, I picked up the phone and vented to a poor customer service representative. She managed to bring me around to being understanding while enlightening me about the background for the changes. I learned that:

1. My DVD queue still existed, I just couldn’t access or add anything new to it, since they wouldn’t be sending me any DVDs. She explained that this was because they didn’t want to set an expectation for customers who had streaming only plans that Netflix would be able to stream this movie to them. She stated that they’d had this problem before with other customers.
2. I inquired why I couldn’t add it to my instant queue. She said that you could add a movie to the instant queue if it was available for streaming or if they knew it was going to be available for streaming. In this case they did not have an agreement to stream it with Universal Pictures. Again, this is a matter of properly setting expectations with customers. There is no point to be able to allow folks to add a movie to their instant queue if they’re not going to be able to stream it in the foreseeable future.
3. They had removed the ability to manage the DVD queue from other devices such as the iOS app, PlayStation, XBox for the same reason, that it set poor expectations for their customers that they could stream the movie on to the device.

At this point the technology and media aware crowd is of course is saying:

“Really? People were getting confused over this?”

Yup. They were, and Netflix wants to have a good customer experience, the most important part of which is being able to set and meet your customer’s expectations.

Netflix is willing to make a radical change that doesn’t seem to make sense from the outside. For instance, they stopped offering email support back in 2007. When Netflix did this, Michael Osier, Netflix’s vice president for information technology operations and customer service at the time said to the New York Times,

My assessment was that a world-class e-mail program was still going to be consistently lower in quality and effectiveness than a phone program.

As someone who has been on the receiving side of customers’ emails I understand that providing quality customer service via email is difficult. Sure it is fine if you’ve got a knowledgable IT professional asking you to do something fairly transactional such as adding reverse-DNS. However, when you get a average customer opening a ticket because their internet connection is down, we just went to the point of “please call us” because we couldn’t troubleshoot via email, because internet connectivity troubleshooting requires too much coordination between both sides. Most customers don’t know how to use email appropriately, asking them to call in when they’ve indicated that they’d like to complete a request via email is a way to completely miss an expectation.

Instead Netflix allows most routine requests to be entered in a structured manner, so customers know exactly what they’re requesting, and Netflix doesn’t have to have someone handle an email.

One other reason I see them doing this is to be able to minimize comments such as these from Dexter:

• Please put dexter season 3 and 4 on the instant queue me and my friend fell in love with the first two seasons and we really want to continue watching dexter.thank you
• Please put Dexter Season Three on Instant. You guys are already losing business because of the hike in prices. Do us a favor please!
• Dexter seasons 3 and 4 need to be available on streaming internet!!!! please make this happen!!! i love this site but the options of things to watch are getting slim.
• Why did they take away dexter season 1 and 2 off of streaming?! UGH!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

If Dexter isn’t available on a streaming only Netflix there won’t be a page for people to comment on. Also, since Qwikster won’t offer streaming customers there have no expectation that the’ll be getting streaming video.

Netflix is managing their customer’s expectations, which is one of the most important parts of any business. I learned back in the days I managed fast food, it didn’t matter if you were great or if you sucked, people just wanted to know what they were going to get.

Managing and meeting expectations is key to keeping customers happy.