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Leadership: Netflix’s New Idea: A Customer Service Call-Center

Netflix, the mail-order film rental giant, has set up a customer service call-center. No longer will customers be relegated to the Internet to get their problems solved. Under competitive pressure from Blockbuster, Netflix executives, including the CEO, Reed Hastings, decided that bringing human beings and their voices back into the mix would be a competitive advantage. That remains to be seen, as the transition to phone-based service is relatively new, but to me, this strategy sounds like a winner.

Netflix, the mail-order film rental giant, has set up a customer service call-center. No longer will customers be relegated to the Internet to get their problems solved. Under competitive pressure from Blockbuster, Netflix executives, including the CEO, Reed Hastings, decided that bringing human beings and their voices back into the mix would be a competitive advantage. That remains to be seen, as the transition to phone-based service is relatively new, but to me, this strategy sounds like a winner.

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But there’s more good news. According to an article in the New York Times, Netflix’s web-based customer service has been eliminated. Furthermore, the center is in the U.S., near Portland, Oregon of all places, where Netflix determined people are nicer than in traditional U.S. call-center locations like Phoenix and Las Vegas, even though they have to pay higher salaries. This move is in striking contrast to years of companies not only making it virtually impossible to speak to a human being about problems with the products they sell, but when customers do finally get someone on the horn, the individual is often not a native-speaker, difficult to understand resulting in an unbelievably frustrating experience for the customer with no service in sight.

As we all know, the entire customer-service process in our increasingly web-based economy has become incredibly painful. First, we struggle to find a phone number to call because companies bury them on their websites. Then, when we do call, we are led through several prompts, the very last of which (if it even exists) starts with “To speak to a customer service representative.” But that’s just a tease because inevitably there are not enough representatives to handle the calls and we get the recording that begins with “Due to high caller volume.” Once placed in this queue, we hold our breath and pray that we won’t be disconnected and forced to repeat the entire procedure again. By the time we do get a human on the line, I don’t know about you, but I am in no mood to be friendly or accommodating or calm. Whatever unhappiness existed as a result of the original product problem has grown worse, exacerbated by the system forced upon me as well as the loss of that most precious commodity, time.

I think Netflix is onto something vitally important. While researching this strategy, the company found that there is a much greater likelihood that they will be able to retain customers or bring those who have departed back into the fold if they allow a conversation about a problem to take place. This voice-to-voice contact is rich with meaning and far superior to communicating via the Web, which is based on written language. As I mention every chance I get, writing and speaking are different. The meaning in writing is mostly verbal, i.e., in the words themselves on the page. With speech, however, the meaning is mostly non-verbal; it is created by how we say what we say. Tone, expression, volume, rate, pace — even a pause or a deep breath are all tremendous influencers. Not to mention that customers actually have someone to listen to their problem. There is simply no way a customer can get the same amount of satisfaction from a written response to a complaint as he or she can from this type of human contact.

Another newsflash: Speaking is also so much more efficient. With the proliferation of communications technologies, we’ve duped ourselves into believing that email and other types of written communications technology are time-savers. That is pure myth. Much more information can be packed into a 10-minute phone conversation than in 10 emails. If time is money, Netflix stands to gain.

And there are still more interesting developments around Netflix’s new phone-based customer service. Representatives have more authority and discretion to give out bonus disks and credits to disgruntled customers and they are encouraged to err on the side of generosity. When was the last time you felt you didn’t have to fight for what little service you were entitled to? So to speak to someone who might actually be able to put a bandage on my booboo sounds like a real luxury.

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I hope Netflix can make this cost-effective. But even if they can’t, I hope they keep going and start the pendulum swinging back to true customer service. I know I’d be willing to pay a little more knowing that if I had a problem, I could reach a person to resolve it. To me, it is about providing a greater value.

Netflix is also providing a model for other companies to do right by their customers. Anyone out there watching?

Ruth Sherman • Ruth Sherman Associates, LLC • Greenwich, CT • www.ruthsherman.com

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About the author

Ruth Sherman, M.A., is a strategic communications consultant focusing on preparing business leaders, politicians, celebrities, and small business entrepreneurs to leverage critical public communications including keynote speeches, webcasts, investor presentations, road shows, awards presentations, political campaigns and media contact. Her clients hail from the A-list of international business including General Electric, JP Morgan (NY, London, Frankfurt), Timex Group, Deloitte and Dubai World

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