Understanding customer loyalty and why members frequently leave Netflix. How can we convince them to stay?
Netflix is the world's
leading streaming entertainment platform (SVOD), with 195 million
paid memberships in 190+ countries. For a flat fee, members can
watch unlimited shows & movies.
Many members leave and return to Netflix. They
also frequently switch between other streaming
video-on-demand (SVOD) services without penalty, known as
churning .
I Challenged Myself to tackle project Please Don't Leave
: a narrative-building UX research project aiming to uncover the
subtle reasons why members leave Netflix and how to stop them from
canceling from a loyalty perspective.
People tend to humanize and
personify companies as they do with pets, cars, etc.
The issue we face with Netflix is about how people feel about things.
Because a company is trying to provide a service and be loved, it is
especially vital to consider this version of personification â this
is much more analogous to a humanized relationship than it is with
your car, where Netflix can actually be a partner
. Since loyalty is sought, this is a great framework for our research
because we evaluating if Netflix is a responsible partner in
their relationship with its members.
Using sources from our secondary readings, we identified 5
main components of an ideal human relationship...
We began our research with
interviews, which allowed us to get to know Netflixâs current
members, ex-members, and never returners on a personal level. 13
one-hour-long interviews were conducted with questions grouped
into the following sections:
After completing our interviews, we
affinity mapped our interview insights to organize the themes
and pain points brought up by members.
We grouped key themes into 3 broad
overlapping branches pictured below ( the 3 Rs
).
In general, we discovered that there are two types of
relationships people form with Netflix, including (1)
transactional relationships defined by members
getting as much as they can from Netflix, or (2)
personal connections developed through communication
and trust. Members are also concerned about the
reputation of the brands that they chose to support,
most often aligning themselves with socially relevant brands that
share their values, exemplify innovation, and
community-mindedness. Finally, members want to support a brand
with a reliable price w ith high-quality
content and product offerings.
To further identify patterns in
how members form loyalty to a brand, we created a
concept map to better visualize relationships between the
grander themes of our findings
The concept map below synthesizes insights directly from our
interviews and affinity clusters.
After understanding the pain
points of our members in qualitative research, we
conducted qualitative research to assess impact and reasons
members may cancel their membership.
â
In a survey, 292 people who don't love
Netflix were asked to rank reasons that influence their decision
to cancel their Netflix membership. The following reasons were
related to outcome variables of satisfaction and willingness to
stay with Netflix.
The most common reason people cancel Netflix is because there
arenât enough good movies on Netflix. The second most common
reason is they find their membership too expensive. However,
members also strongly agreed with more nuanced reasons such as
lacking trust , having dissimilar values
, and wanting a more personalized experience
.
From our interviews, we created
4 personas representing the types of potential
Netflix churners or ex-members; The Outspoken Communicator, The
Moralist Researcher, The Heartless Transactional, and The Social
Follower.
Our goal behind deciding to
conduct a factor analysis was to figure out which
potential issues to cancel and outcome variables trended
together.
First, we extracted five main components (groupings) from the
survey data: (1) Relationship Yearners, (2) Netflix Lovers, (3)
Transactional Members, (4) Skepticisms and Idealists, and (5)
Relationship Communicators (people who want to be heard). Then, we
used principal components analysis (PCA) to reveal which reasons
are related to each other.
Based on our research, we saw
similarities with the idea of a human relationship. This inspired us
to develop what we call the Parasocial Relationship
Hierarchy of Needs.
This hierarchy mirrors the theory proposed by psychologist
Abraham Maslow . Maslow argues that there are FIVE stages
of human needs that motivate behaviour. Our goal was to visualize and
understand the types of relationships that people form with Netflix.
Similar to ups and downs of relationship, we
organized each level of the pyramid is organized in terms of
strengths and weakness , which take into account how
members and ex-members perceive Netflix.
Recognizing the Dealbreakers
Netflix doesn't listen or care
about my values or communicate the reasoning behind
their recommendations
Netflix doesn't take initiative or put in
effort to make me feel valued
Making Amendments
By sectioning content by moods and
ambiences, we communicate the intent behind search
results instead of ambiguously suggesting grids
of shows
Search results are organized and labeled to highlight
Netflix's efforts to assist their members.
Recognizing the Dealbreakers
Netflix falls short in representing a
genuine brand that is trustworthy when I am stuck
(have nothing to watch), in addition to showing their
appreciating for my loyalty as a paying customer
Netflix isn't personalized enough.
Making Amendments
Churning can be avoided by
investing in personal relationships .
Currently, adding to My List from home (via +)
carries little meaning ; the show is simply
added to a large grid of titles
Creating collections within My Lists conveys a curated tone
that allows for greater control & understanding of what
each title means to the respective user.
By curating their extensive library into watch lists,
Netflix has the opportunity to show members they
value their time and support .