If you’ve heard me give a presentation in this year, chances are good you’ve heard me talk about the success of Netflix compared to the video rental industry’s benchmark, Blockbuster. Whereas Blockbuster has been steadily losing money, Netflix has been making a profit and growing. Blockbuster, who was the market leader is now has half the market capitalization of Netflix (despite the poor performance of Netflix’s stock these past few months).

One of the most interesting comparisons of these two companies is the amount of investment they make in advertising. It’s not hard to find a Blockbuster ad — they spend millions on advertising every year. Netflix ads are much harder to come by. Somehow, the market leader doesn’t find the need to advertise nearly as much.

In an article earlier this year about Netflix, CMO Leslie Kilgore revealed 85% of new subscribers to the service say the primary reason they subscribed was because of a friend or family member’s recommendation. She also said 93% of existing customers regularly evangelize Netflix.

Would you like 93% of your customers to be regularly evangelizing your product or service? Of course you would. What would it take to get there?

Kathy Sierra, over at the Creating Passionate Users blog, has an idea:

“Why do so many companies treat potential users so much better than existing users? Think about it. The brochure is a thing of beauty, while the user manual is a thing of boredom. The brochure gets the big budget while the manual gets the big index. What if we stopped making the docs we give away for free SO much nicer than the ones the user paid for? What if instead of seducing potential users to buy, we seduced existing users to learn?

“Let’s take the whole damn ad/marketing budget and move it over to product manuals and support. Let’s put our money where our users are. If we’re in it for the short term, then sure–it makes sense to do everything to get a new user, while doing as little as possible once we’ve got them. But if we’re really in it for the long haul–for customer retention and loyal users–then shouldn’t we be using all that graphic design and pro writing talent for the people we care about the most? Our users?”

What Kathy is talking about is attention to detail. Companies like Netflix attain their leadership position because of they give attention to detail.

Do you know how your customers experience your product or service? Are you putting the attention on getting them to buy/sign up? Or are you putting it on getting them the best possible experience, so they’ll start selling your service to everyone else?

This entry was posted on Sunday, September 3rd, 2006 at 6:26 pm and is filed under Experience Design . You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.