Product Management Event at #ProductCon Seattle on Netflix's Customer Obsession by former VP of Product at Netflix, Gibson Biddle.

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Netflix's Customer Obsession by fmr
Netflix VP of Product

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10. Gibson Biddle
T O N I G H T ’ S S P E A K E R

11. ProductCon: June 25, 2019
NETFLIX’S
CUSTOMER
OBSESSION
Gibson Biddle // @gibsonbiddle

12. @gibsonbiddle
Are you a
Netflix member?

13. Net Promoter Score
?
Detractors (0-6)Passives (7-8)Promoters (9-10) Net Promoter Score

14. Net Promoter Score
10%10%80% 70%
70
Detractors (0-6)Passives (7-8)Promoters (9-10) Net Promoter Score

15. Jeff Bezos
CEO, Amazon
@gibsonbiddle
Customers are always beautifully, wonderfully
dissatisfied, even when they report being happy
and business is great. Even when they don’t yet
know it, customers want something better, and
your desire to delight customers will drive
you to invent on their behalf.”

16. @gibsonbiddle
Electronic Arts

17. @gibsonbiddle
Elmo’s Preschool

18. Creative Wonders
@gibsonbiddle

19. @gibsonbiddle
The Learning Company

20. Mattel

21. @gibsonbiddle
Netflix

22. Customer focus
@gibsonbiddle
Satisfy
Listen
Compete.

23. @gibsonbiddle
Customer obsession
Delight
Experiment
Invent.

24. 1999

25. Today

26. Customer
Obsession
The DHM Model
Consumer Science
Free Trial Reminder
Agenda
@gibsonbiddle

27. @gibsonbiddle
Product leader’s job
Delight customers in
Hard to copy
Margin-enhancing ways

28. Balancing act
@gibsonbiddle
Delight v. margin
New Release DVD test.

29. NEW on DVD
Consumer insight
Surveys, focus groups
& CS data
The result
@gibsonbiddle
Perfect NR test
The A/B test
Perfect New Release
Delivery
Cancels: from 4.50% to 4.45%
“Save” 5,000 customers
“Worth” $1M= 5,000 x $100 x 2
But, additional inventory = $5M.

30. NEW on DVD
Launch NR testor
No launch
@gibsonbiddle

31. NEW on DVD
Launch NR testor
No launch
@gibsonbiddle

32. Hard to copy
@gibsonbiddle

33. Hard to copy
@gibsonbiddle

34. Hard to copy
Brand
Unique technology
Network effect
Economies of scale
/ Examples
“Movie enjoyment made easy”
Personalization
Device ecosystem
Original content
@gibsonbiddle

35. @gibsonbiddle
Personalized Instant (DVD, streaming)
Easy Exclusives
Open APIs Entertainment
Friends (social) Movie-finding tools

36. Entertainment
Instant (DVD, streaming)
Easy Exclusives
Open APIs
Friends (social) Movie-finding tools
@gibsonbiddle
Personalized

37. Entertainment
Instant (DVD, streaming)
Easy Exclusives
Open APIs
Friends (social) Movie-finding tools
Originals
TV devices
@gibsonbiddle
Personalized

38. Product strategy / Tactics
@gibsonbiddle
Personalization
Instant
Easy
Device ecosystem
Margin-enhancing
Ratings Wizard, new algorithms
From 20 to 100 hubs; streaming
Day One experience
API launch; Xbox, Playstation
Price & plan testing

39. Product strategy / Metrics
@gibsonbiddle
Personalization
Instant
Easy
Device ecosystem
Margin-enhancing
% members: 50 + ratings at M2
% members watch > 15 min./mo.
% with > 3 titles in queue, day 1
% of demand weighted TVs
Lifetime value, gross margin

40. Consumer
Science
@gibsonbiddle

41. Consumer
Science
Consumer insight through:
Qualitative
Survey
Existing data
A/B tests
Hypotheses
Procedures
(Experiments)
Data
(Results)
SCIENTIFIC
METHOD
Findings
(Conclusions)
@gibsonbiddle

42. 2005
@gibsonbiddle

43. Product strategy
Explicit data
Implicit data
Matching algorithms
High-quality movies
/ Metric
P2 > 50 ratings
% members add > 6 dvds/mo.
RMSE
Average rating
@gibsonbiddle

44. Product strategy
Explicit data
Implicit data
Matching algorithms
High-quality movies
/ Tactic
Ratings Wizard
Queue-add data
Collaborative filtering
Acquire better movies
@gibsonbiddle

45. Pop Quiz #1
@gibsonbiddle
What % of members rate > 50 movies in first 6 weeks?

46. % of members who rate > 50 movies
@gibsonbiddle
30%
15%

47. Ratings Wizard
@gibsonbiddle
The more you rate, the better we’ll
do at finding movies you’ll love.

48. @gibsonbiddle
Pop Quiz #2
Will demographics help predict movie taste?

49. Movie predictions improve over time
@gibsonbiddle

50. Collaborative filtering
@gibsonbiddle

51. Improve RMSE by 10%, win $1M!
@gibsonbiddle

52. @gibsonbiddle
Pop Quiz #3
Will the new algorithm improve retention?

53. Category interest algorithm

54. @gibsonbiddle
% Members who add more than 6 DVDs/month to their queue
DVDs by mail

55. @gibsonbiddle
% Members who add more than 6 DVDs/month to their queue
DVDs by mail
% Members
Watch > 15
min/month
Streaming

56. Pop Quiz #4
Is it helpful to know you’re French?

57. Thumbs v. Stars?

58. @gibsonbiddle
Average rating improves over time

59. @gibsonbiddle
Movie rating does not equal movie enjoyment

61. Casino = 98% match
@gibsonbiddle

62. @gibsonbiddle

63. @gibsonbiddle

64. Free Trial
Reminder
@gibsonbiddle

65. @gibsonbiddle

66. @gibsonbiddle

67. (All data are guesstimates)
@gibsonbiddle
2%
90%
$10M
85%
Consumer insight
“Cancel anytime”
Customer service:
Trials/visits conversion:
Month one retention:
A/B test results
Month one retention:
DHM?
High stakes or low stakes?
Who makes the decision?
Free trial reminder

68. Send to allor
Don’t send
@gibsonbiddle

69. Send to allor
Don’t send
@gibsonbiddle

70. Low stakes (reversible)
DHM: Double down on delight
Cost of ethics & brand
Debate, decide, do.
Free trial
learnings
@gibsonbiddle

71. Threemore things required
@gibsonbiddle

72. Courage
@gibsonbiddle

73. No Late Fees
Patience
@gibsonbiddle
?
Patience

74. Humility @gibsonbiddle

75. @gibsonbiddle
Existing data
Data focus
Customer & Bus.
Qualitative
1-1, usability,
focus groups
Survey data
Demo, cancel,
quality, NPS
A/B testing
Measure change
Delight v. margin
Strategy
Hypotheses
DHM model
Are You
Obsessed?

76. Customer
Obsession
Putting the customer at the
center of everything you
do, to delight customers in
hard-to-copy,
margin-enhancing ways, to
invent the future.”

77. @gibsonbiddle

79. @gibsonbiddle

81. www.gibsonbiddle.com
Complete Net Promoter Score survey
Download PDF of presentation
“Customer Obsession” article on Medium
@gibsonbiddle

82. Questions?
Visit lounge @break
www.gibsonbiddle.com
Download PDF of presentation
“Customer Obsession” article on Medium

83. www.gibsonbiddle.com
Complete Net Promoter Score survey
Download PDF of presentation
“Customer Obsession” article on Medium

84. www.productschool.com
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