Late last week, the Business Day section of The New York Times ran a great story on Netflix’s customer service strategy. Faced with unexpectedly effective pressure from Blockbuster Video (who have turned Netflix’s own mail order model on its head by allowing their customers to return movies not just by mail but at the rental chains’ physical locations as well), Netflix has counter-intuitively invested millions of dollars in domestic telephone support facilities and staff.
Where the number of companies outsourcing customer service by telephone to Third World locations is only increasing, Netflix has instead chosen to hire two hundred workers in Oregon to man their hotlines in the hopes that a renewed, more responsive focus on customer service will win the day for them. They’ve even given these representatives enough operational latitude to allow them to function not just as telephonic automatons, but as real, empathetic human beings who help other human beings solve their video rental-related problems. Imagine. It’s a winning strategy, in my book.
Video Killed the Customer Star
I thought about this approach when I was at my local video store over the weekend, trying to find a copy of “The Bourne Supremacy” to watch with my nephew, who’s visiting for the week. In spite of the fact that this Matt Damon franchise has transformed itself into a sterling example of what can be accomplished in the action genre, I admit that none of the installments are much in the way of artistic or intellectual marvels.
And yet the utter disdain on the clerk’s face when I inquired whether she had a copy available to rent surprised me. All I wanted to do was to find an entertaining distraction for a ten year old, and she looked at me as if I had committed some egregious error of politeness. Here we are, at least half a decade after the video rental industry has peaked, when mom ’n’ pop rental stores seem to be hanging on by a thread, and it’s still possible for a shop clerk to act like anything but a request for “The Seventh Seal” is an imposition? Amazing.
Mean Moms ’n’ Pops
This incident at my rental shop reminded me of one staple of urban commerce that I’m only too happy to have upended by the more efficient competitive dimension made possible by the Internet: the holier-than-thou boutique, in which erudite, ludicrously hip sales clerks seem perpetually annoyed by the unsophisticated, bourgeois and yet completely legitimate queries of their patrons. Once upon a time, New York City was riddled with these kinds of stores — book stores, comic stores, record stores, video rental shops, etc. — where it was impossible to ask simple questions without being passive aggressively humiliated by the staff.
In the early 1990s, the big box stores rolled into major cities and many cries of complaint went out over the death of neighborhood bookstores at the hands of chains like Barnes & Noble. I was sorry to see lots of them go, too, because many of them were staffed by genuinely helpful people, and their role as small businesses — bulwarks against cultural homogeneity — were invaluable.
But there were a few whose demise I secretly relished because the experience they provided to their customers was so bad. I feel the same way today when I walk into any kind of a boutique whose staff are distracted, disdainful or clearly disorganized such that they are more preoccupied with their own systems or protocols than they are with their customers’ needs… there just doesn’t seem to be an excuse for it in this day and age.
The Internet… It’s Coming for You
The effect of the net on commerce over the past decade has been unfair and unkind to a lot of independent enterprises, I admit. But one thing that’s not often acknowledged is that it’s done an unexpectedly good job of rooting out those businesses who are just plain bad at relating to their customers. Even those small businesses who aren’t directly threatened by net-based competition should sit up and take notice, I think, because the net is bringing about a new expectation for intensely customer-focused commercial practices.
Where once expertise and scarcity of merchandise allowed boutiques a certain kind of superiority, those advantages are clearly eradicated, or nearly gone. It strikes me that the relationship with a customer is the only thing that a business has, really. It’s not an unassailable advantage, to be sure, but it’s as good a foundation strategy for survival as any — which is why I applaud Netflix so heartily, and why, at the same time, I wonder if they’ve already waited too long to execute on this strategy — too long meaning they waited until Blockbuster showed up, nipping at their heels. Regardless of your size or whether you’re selling online or offline, why wait until newer, more ruthlessly efficient competition is eating your lunch to start being nice to the people who buy your goods?
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hello MTA! oh right, no competition. bring on the robots!
“Little Shop of Horrors” is an apposite title. Bourne Supremacy had a PG 13 rating in the US and a 12A rating in the UK. It’s a fairly violent film and probably unsuitable for a 10 year old.
And right on the heels of the narrative-vs-behavior conversation!
The last time I went into Kim’s Video, I asked a clerk where I could find Paddy Chayefsky’s “Network.” She recoiled and dropped her jaw a little, and then tutted and rolled her eyes, as if I’d asked if anyone there might remember who directed an old movie called Star Wars. “It’s in the O.J. section? O.J. Section?” (O.J. Section?) She glanced conspiratorially at the customer behind me, and then raised her voice a little for maximum public shaming: “O.J. SECTION. Movies about the media? It’s over THERE?” It was little moments of precious bullshit like this that drove me to TLA on Eighth Street, and then to Netflix…
But I can’t help but think how these same personal taxonomies would have so been brilliant online — Amazon’s Listmania on steroids — if only they were a supplement to, rather than a replacement for, the customer’s way of looking for things.
You need to see Black Books. It is a british comedy that does an excellent job of capturing the spirit of the independent mom-and-pop shop.
I lament the demise of mom and pop stores because it will take all of the “holier-than-thou”s out of that setting and put it in another… possibly going straight to a job where you or I work, and then we will have to *try* to deal with them there. I’d much rather they get something of a reality check while working for a local record/movie store.
That being said, the only difference between a smart-assed employee at a record store and a smart-assed designer/programmer/whatever is salary. Without the reality check, these people simply trickle up the employment chain. And I would be far happier dealing with the clerk making hourly wages than the obnoxious fellow employee making 5 times that amount. There’s no doubt he/she will use that salary as validation of their flawlessness which will enable them to project even more. Yuck!
Um, Bourne Supremacy for a 10-year-old? Precocious or not, that seems like a choice for the uncle and not the nephew.
Yeah lets just have streets full of the same chains you find everywhere else, lets kill local identity.
Well Blockbuster did have the winning bargain in the fight until just this week they suddenly changed their minds and are now limiting the amounts of times you can trade in your videos in the stores. Pretty lame concidering the amount of money and time they spent shoving the “Never Be Without A Movie” concept into our brains winning us all over with their computer generated illustrations of little round headed people taking movies out of their mailbox and driving the short distance to their local blockbuster stores instead of their friendly neighbor who is stuck lounging around on their couch with nothing to do.
I was pretty upset to not even be notified by e-mail of the change. It was the same disatisfaction that came when I returned my movie to blockbuster and they informed me I had a late fee. I then said I thought ya’ll DESIMATED late fees, and their were NO SUCH THING, ifact I thought that was a blasphomouse term to Blockbuster. Nope they just decided to change their minds without informing anyone.
Netflix really needs to play up, what I consider its best advantage over Blockbuster, selection. The selection at Blockbuster absolutely sucks, unless you want an actual blockbuster (I guess their name is apropos) movie, you’re out of luck. If you like foreign and independent films, Netflix is supremely better.
I swear I had a High Fidelity flashback when reading this. Of course, I refer to the infamous scene where Jack Black pisses the hell out of a customer just because he was looking for a Steve Wonder record for his daughter.
A scene which is all too familiar for me since I’m an avid record collector and, once in a while, I’ve had to put up with that kind of obnoxious, holier-than-thou attitude to get to the goods. Sometimes, but fortunately not often, that’s what it takes to get what you want.
However, it will be a sad, grim day when you have no other shopping choices but Wal-Mart and their kin (which, by the way, are not interested on low figure-selling products like most of niche markets are). This is not to justify the arrogant and childish behavior of some mom and pop shops (which should know better in terms of customer service), but of defending the ability to have choices beyond what big store chains of corporate America think you should be interested in. Diversity is the essence of life.
Yeah, mean mom ‘n’ pops suck. But mean anything sucks. Frankly, I never got better service from Blockbuster. Perhaps less disdainful, but certainly no less helpful. And their selection: pitiful (though you’d probably have no trouble finding “Bourne Supremacy”).
I’ve refused to give Kim’s my business for 7 years now, and the Internet has helped me do that. I’ve preferred, instead, my awesome and customer-friendly neighborhood shops. Unfortunately, they’ve all shut down.
I’m not sure the Internet has yielded net gains for good service. Or, if it has, somehow we’re still living, by and large, in a non-service-oriented consumer culture. How is this even possible? I, for one, will point my dollars towards companies that are concerned with the customer. I certainly hope Netflix can parlay their recent interest in customer care into a success story, because if they can’t we’ll be left with little choice but Blockbuster. And that’s the worst of all worlds.
Fred, Todd W.: I appreciate your concern about my nephew watching a PG-13 movie. I’d like to keep this on topic though, so if anyone has further objections please email me directly, rather than posting on this thread. Thanks.
Mom and pops will always exist. New ones will come into being. However, with chains as competition, they have to provide a reason for them to exist. Most mom and pop places haven’t been treasure troves of hard-to-find stuff, they’ve just been the only thing nearby (especially in small towns). If a chain rolls in and offers everything they offer, they resort to appeals to emotion to make you think of them as anything but the stores with the snotty employees who sell overpriced crap.
(Of course, another aspect of mom and pop stores failing is that small businesses have always had a high rate of failure. And to be pointed, the sort of people who think they’re entitled to your business aren’t the sort who are the best at running businesses.)
And those much rarer stores that actually offer something special? Well, if that “something special” actually means enough to the customers, they’ll keep going to those places.
I keep thinking of that movie You’ve Got Mail, where Meg Ryan plays the small-bookstore owner who goes out of business. The film tries to play it as tragically unfair. She was nice to her customers, she knew them by name, she had a vast knowledge of children’s books, etc…but despite the handful of dedicated customers we see, the unspoken truth of the matter is that her business really relied on people who just wanted to buy a book. She didn’t offer anything to those people that they wanted to pay higher prices for; once she wasn’t the only bookstore nearby, they sought out better prices.
It seems to me that NetFlix isn’t trying hard enough. They just don’t understand the principle of value-added services as well as Blockbuster.
First,
I use Blockbuster’s Online Mail service, and I am still baffled as to why they continue to do themselves the disservice of NOT emphasizing that you don’t just have the option of returning your movies in the store in addition to the mail, but when you bring them into the store, they count as a coupon for a free movie rental from the store. This free exchange does not count against the number of movies you receive via mail and has no consequence on your queue. You therefore are receiving twice as many rentals as you are paying for. For example, I subscribe to the 3 DVDs-at-a-time plan and this translates to six movies at a time, three by mail and three from the store. Flippin’ Sweet is all I have to say. One satisfied customer right here. (Don’t all rush over though, they are ending this policy and now exchanges count for a discounted in-store rental. Current customers will continue receiving the original benefit as they will be gradfathered in).
Blockbuster keeps emphasizing the convenience factor of returning them to the store (which by the way is awesome because you actually get your movies faster because they send the next movie in your queue as soon as it’s scanned at the store so you don’t have to wait for it to travel back to them). But I just think they could articulate this detail much better than they are because I don’t think NetFlix customers know this.
Secondly,
it just doesn’t seem like a huge value-add to NetFlix’ service by emphasizing customer service, which is inherently rooted in medicating problems, rather than actually adding some tangible value to their product (as in the case of Blockbuster).
Am I missing something re the Customer Service angle?
The inverse of the high-and-mighty clerk, of course, is the apathetic and incompetant clerk who wouldn’t be able to find you a copy of The Bourne Supremacy if there was a stack six feet high right in front of their face. This is pretty much how Blockbuster has been surviving over the last decade or so — not at all by innovative business practices, but by slashing their staffs, undertraining them, and presumably underpaying them. BB is a business that, I am guessing, has their whole death mapped out and exists today as an enterprise dismantling itself in the most profitable way possible given the cirumstances until all that remains is the brand name.
This is a great post. And the attitudes exhibited at some of these Mom and Pop’s also appears in some of the more successful chains that operate in a boutique fashion as well. As they say in showbiz, you always meet the same people on the way up that you do on the way down, except the roles are often reversed.
As for the appropriateness of the movie. I suspect much of this is posted by people that aren’t actually parents. It’s a dubious rental for sure but Khoi is an UNCLE. It’s his job to push boundaries around inappropriate movies, purchase of fireworks, musical instruments, etc.
Chris Bernard
@Chris Bernard: Indeed these attitudes do show up at chain stores — the surly Kinko’s Auteur is a staple of their in-store staffing.
@Khoi, I really think that either your premise is wrong or people are interpreting it wrong. Your experience of a few bad apples has skewed your opinion from a mere interesting observation to a demonstrably wrong sweeping generalization. For ever big chain store with excellent customer service (like Barnes and Noble) there are many more who are far, far worse — Home Depot where the staff literally runs and hides from customers, CVS where if the bar code is unreadable they cant just type in the price, but have to ask YOU to go get a new box, Best Buy where they make innocent people empty the contents of their bags upon leaving the stores as if we were all terrorists. And holding up Blockbuster, as some have done in the comments, as an exemplar of customer service? That is frankly ludicrous — I still remember the day I met a Blockbuster employee who actually gave a fuck about movies and knew the name of a couple of film directors. He was gone in a few weeks, replaced by someone who wouldn’t waste company time helping those few customers who weren’t going to rent the fifteen new films featured that week and displayed on the shelves right by the cashiers.
I’ll take the snobby and bitter Tarantino wannabes over the know-nothing automatons any day. And the nice people in the moms-and-pop shops still outnumber the primadonnas, too.
The change you’ve seen, I think, is merely a cultural shift that has occurred nationwide across all person-to-person business, away from deliberate surliness on the part of staff and back towards the normal traditional model of how to treat customers. The “rude waiter”, who exemplifies this fad, was actually a very fashionable retail experience choice, made deliberately by many businesses in the 1980’s and early 90’s. If you’ve seen a decline in this, it’s because it went out of fashion, not because the big boxes have come to save the day.
I’d also contend that the very few big chains that have competent and friendly customer service do so because they have decided to emulate the Mom and Pop shops, empowering the employees to be themselves and to have idiosyncrasies. The Apple Store “Genius Bar” people, the B&N staff picks, etc. These are real people, and some of them are probably even snobs, but they are encouraged to be nice to the customers — or get fired. Again, these are by far the exception, not the rule.
Khoi, are you still renting videos at Kim’s? Even now that you’re in Brooklyn? Those bastards really do give mom-and-pop a bad name.
Chris: I disagree that I’m making a “demonstrably wrong sweeping generalization” about big box stores being better than boutiques. In fact, I’m saying nothing of the sort. There is an important role that these small businesses play, I admit as much in my post.
My point is that there are some boutiques that provide such a poor customer experience that I have to admit I’m not sorry to see them get trampled under the feet of their much larger, much better financed competition.
And where these kinds of stores have gotten better at customer service — in fact, where any kind of stores have gotten better — I hope I was clear in saying that it’s the Internet that’s responsible, not big chain stores.
Re-reading what I wrote, I can’t see how it can be seen as a defense of big box stores at all, unless one is willing to read any critique at all of mom and pop businesses as an endorsement of Best Buy. Which seems to me to be exactly the root of the problem in the first place.
@ Fahey: Thank you!
Out here in Seattle there are some amazing shops of all kinds — so much so that I rarely find myself having to sink to patronizing one of the chains. I agree with some others here that this post is a gross generalization — much more often than not I find that people working at indie shops are intelligent, welcoming, and genuinely happy to have my business.
His post strikes you as a gross generalization, but you feel justified making generalizations about “indie” businesses on the other side of the continent from you?
@Khoi: You’re right, I guess I was responding more to the “hooray for big boxes” vibe to many of the comments. There are certainly mom-and-pop shops that have rested on their laurels for too long, but the competition from the big boxes has not been on service, but almost exclusively on price and selection. Netflix’s latest service improvement, if it in fact turns out to be an improvement, is not emulating chain stores, but rather it is emulating old school mom-and-pop customer service.
Blockbuster may let their customer’s return videos to the store, but their selection is nothing compared to Netflix. More importantly, the future is watching films via the internet streamed or downloaded directly into your AppleTV or other DVR device.
In the matrix of business size vs. business quality, I’m sure we can all illustrate all four quadrants with countless examples. And while there’s much to dislike about big box stores, from their corrosive social impact to their unfair legislative advantages, I don’t think this is what Khoi is talking about. It seems to me that the problem he’s describing is a disconnect between his expectations and a business’s ability to deliver, a problem that beleaguers businesses both large and small. Any successful business has to both set and meet expectations, and the best businesses use design to mediate this relationship. When you shop at zingermans.com, the typography signals what you’re getting into; the same is true for walking into a McDonald’s anywhere in the world, for better or worse. Subway conductors manage expectations brilliantly, by apologizing for delays only when they know the train is just about to start moving. There’s no reason that smaller businesses can’t adopt these techniques, but so often they just don’t. It’s often because they’re focussed on what they perceive to be their core business (DVDs) rather than their actual competitive advantage (service.)
Eric hit the nail on the head with You’ve Got Mail, in which the real tragedy isn’t that Meg Ryan was driven out of business, but that she couldn’t find a way to exploit what should have been a competitive advantage. Twinkle lights and plush toys in the window may communicate that you’re kid-friendly, but the book wholesaler on the corner can adopt this same window dressing, and does. Where was the invitation to the customer base about a reading and book signing by a beloved author? Where was Meg’s own well-visited and authoritative blog about the new books she’s most excited about? Who was reading Meg’s facebook page? Businesses both online and offline can drop the ball, and while it’s sad, it’s not tragic. It’s progress.
Spot on. If the customer service at your shop is so bad that people would rather buy online (no customer service is better than bad customer service) you probably don’t belong in business.
I’ll never get the holier-than-thou sales clerk attitude. You’re a sales clerk. You have an identical skillset to anyone who’s ever worked in retail or at a convenience store (i.e. everyone else in in the world.) Stop acting like you’re something special.