John Akerson's Thoughts

Business, technology and life

Netflix, Reed Hastings, Mark Cuban and Customer Service.

Mark Cuban is a billionaire, and is also a big fan of Reed Hastings.  I am a very big fan too, 

– because Reed has a strategy for competitive advantage that cannot be duplicated or beaten by any inauthentic company. Reed’s strategy is here, and also on SlideShare.

View more presentations from reed2002.

Mark points out one key element of Netflix success is that  ”almost no customers leave cable for Netflix” That is important because it means that subscribers value Netflix in addition to cable. But why not?  The most important competitive advantage that gets to the heart of “why.”   The complete question – to be articulate – is WHY do customers value Netflix, and why will they continue to value Netflix?

Reed reveals that on slide 21 with a simple yet effective philosophy. His philosophy is to provide the best customer service. He stakes Netflix’ success on the ability to be a service of choice, to perform with and deliver to Netflix’ customers, to lead customer satisfaction across all of his current and potential competitors. He understands the amazing depth of competition coming at him from all directions. He understands where his business is going. He thinks that having the best customer service will be his singular competitive advantage.

Even if other companies never get the value of superior customer service, it would be to everyone’s advantage if they would try.  It worked for Zappos, it is working for Netflix. I guess the real question is why WON’T other companies try harder?

In this presentation, Reed gives a great overview Netflix’ history of customer service leadership, and their go-forward strategy for “running fast” as he puts it. For Netflix, running fast is a race to provide the best customer service.  They win when their customers win. 

I like that and admire pretty much every business that uses innovation and superior customer service as a competitive advantage. Unfortunately, I suspect the effectiveness of superior customer service as a competitive advantage is only valuable because it is so rare.  

How could that be changed?

June 4th, 2010 Posted by | Business, Competitive Advantage, Continuous Improvement | no comments