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Netflix - The Cancellation Conundrum

What Gets your Goat - Instalment #2

From the time I was old enough to advocate for myself, I’ve spoken up about illogical policies and things which did not make sense — which is why customer advocacy comes quite naturally.

A classic from childhood, was the proverbial “because” which my parents used as an explanation for almost any of my “why not?” questions. My follow-up question was always, “because why?” To which they hoped a “because I said so” would end the discussion. It rarely did. I was looking for a real reason, one based on logic or facts. At least if I understood their rationale, I could provide a counter argument and try to get to the outcome I desired.

A few weeks ago, I had an “oops” moment of forgetting to pay my US American Express (AMEX) bill. The incident led me down a rabbit hole with Netflix, Spotify, and PayPal – of which there were many “goat getting” customer moments. Today, it is all about how Netflix got my goat—again!

I logged into my Netflix account planning to switch the payment details to my Dutch AMEX when I realized it had been a while since I was engaged in a series. The long summer days were just around the corner, it was the perfect time for a little screen detox! However, I couldn’t find a way to put my account on hold.

Like how all quests for knowledge start, I consulted Google. It was a definitive NO from Google, “to pause your Netflix membership, you’ll need to cancel it.” Cancelling seemed rash.

I searched the Netflix Help Center for “put my account on hold.” The search results returned “Your account is on hold because of a problem with your last payment.”

Hold, please! is TECHNICALLY possible for a customer account to be put on hold, but only when it serves Netflix’s interests? That does not seem like a balanced relationship.

I understand Netflix’s desire to get paid for their service. However, if it is technically possible to “suspend an account,” why not offer it as a benefit for customers? Consider it a feature of the account? I’d even go as far to propose this feature could be a paid service, but I’m jumping ahead.

As a customer:

  • I did not want to cancel my membership. I was not unhappy with Netflix.

  • I didn’t want to give up our shared history because I wanted Netflix to be like my good friend Liz. We can go years without seeing each other, but the moment we’re together, we pick right back up where we left off. We know each other's preferences so well that seemingly weird suggestions like magnesium spray is accepted without explanation.

As one not willing to give up easily, I started a Live Chat session hoping a human might be able to help. The Netflix agent was nice, but he explained it was not possible to put my account on hold, I would need to cancel my membership. When I expressed frustration about losing my history and list, the agent let me know my viewing activity would be retained for 10 months. Well, what if I come back in 11 months, would we have to start all over again?

Starting over is like going on a first date with someone that you've already been intimate with. There will be awkward moments when Netflix suggests a movie I gave a thumbs-down to a while ago. And then there will be the déjà vu recommendation of the Queen’s Gambit even though Netflix knows I devoured it in a weekend! And Lupin, not only did I devour it dubbed in English, but I re-watched it in Version Originale with English subtitles. Sigh...we used to know each other, but Netflix developed amnesia and I’m paying the price for their forgetfulness.

As a customer, I was looking for a rock-solid guarantee from my friends at Netflix that they’d be there for me with my list and new recommendations when I was ready to resume our relationship.

The Netflix Agent was patient as I shared my frustrations, he even offered for “efficiency,” to cancel my membership. Wow, was I just a transaction? I mean, I’ve invited Netflix into my home, taken them on vacation with me and even ask them to keep me company while I was waiting for a doctor’s appointment.

After living in four countries during the past decade, I’ve had to hit reset on long established relationships due to consumer data regulations, internal systems, business issues or technical limitations. It’s annoying. I didn’t want to have to establish a new friendship with Netflix again. We’ve both invested a lot already.

Far too often, as customers, we’re just a transaction (i.e., a receipt with a date and timestamp if we’ve paid cash). Occasionally, we’re more (i.e., an order number or even a customer number with history). While it’s 2021 and it seems like we’ve come so far, many organisations are still on their journey of digital transformation:

  • Some are still in their infancy working to connect their systems and expose the data.

  • Others leverage data for the mutual benefit of customers and their bottom line.

  • And others have connected systems and data but simply fail to put the customer at the centre of the business. They fail to ask or understand what customers want or need. They believe they are in possession of all the data to determine what the customer wants without talking to them.

If I were a shareholder, I'd ask the following questions:

  • What is the impact on NPS and other indicators of satisfaction when a customer cancels their Netflix membership?

  • What is the cost of acquisition? And the subsequent impact on EBITDA of losing versus retaining customers?

Maybe Netflix’s “no account pause policy” is based on data which tells them customers will come back because they are a "captive" audience. But with competitors like Disney, Amazon Prime, Hulu, Apple TV+ and other streaming services, it’s an old-school mentality. Netflix is so good at content creation derived from customer behavioural data; yet have they forgotten about customer service? No matter how mature and exceptional the organisation, there’s always more work to do to listen to the customer.

Since we know it’s technically possible to put a customer account on hold, two potentially straightforward and profitable solutions include:

  • Introduce The Account Pause, by Netflix For 1€/$/£ per month, allow customers to suspend their membership while retaining their history and list. The Account Pause offers unlimited opportunities for re-engagement — imagine how I would feel when Netflix reaches out to let me know there are new episodes of Lupin to watch? I’d be smitten again.

  • Tiered based Membership Suspension: Allow customers to accrue X# of months of account suspension for each year of paid membership. This free service would include an account history guarantee. This is much like their current proposition of “cancelling” but puts the customer in the driver’s seat with a positive sentiment versus the negative feelings associated with ending a relationship.

I suspect the “10-month window” in Netflix’s policy to retain a cancelled account history is more a matter of adhering to consumer data regulations around the globe than an unwillingness to support their customers. However, extending explicit consent by the customer would make this a moot point. Additionally, by charging customers a small fee to store their viewing history with The Account Pause, it should negate regulatory issues and provide a revenue stream in times where there had previously been none.

Perhaps Netflix, like many organisations, is operating from the perspective of "There’s not enough data to support it, why do it.” But only the most passionate customer will complain, most will just leave.

Seriously, suspending an account is a competitive advantage. My yoga studio allows customers to suspend their membership, many gyms do so as well. They know flexibility is good for business; it allows for injuries, extended travel, or fluctuations in income as we’ve seen since the spring of 2020.

Netflix is an exceptional business. They have radically evolved from the days of sending DVDs to my home to leveraging behavioural data to develop their first original content series-The House of Cards. Yet despite their “superhuman powers” of intuition derived from quantitative data, it’s essential for Netflix and every organisation to dive into the qualitative data if they are to be truly customer centric.

Customer advocacy does not always come easily. It requires organisations to shift the conversation from business process transformation (i.e., focus on cost savings and operations), to seeking organisational value by increasing customer satisfaction.

What if rather than telling customers "No,” we /ASKed “Why not”?

What policies or legacy processes are holding your organisation back from achieving customer centricity?

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