Monday, 27 April 2009

Lovefilm no-return envelopes


Lovefilm.com Film Desktop
Originally uploaded by lildude
As someone who enjoys (and whose job involves) data analysis, I imagine that one of the cool things about running a huge business to consumer internet company, apart from the pots of cash, is the chance to analyse customer data and work out its affect on revenue.

Where do your customers come from? What sites refer the most paying customers? How long do they stay on the site?

What's more interesting than analysing the data, is making changes to your website and your business and seeing the effect that this has on customers. For example, does moving the "buy now" button to a different part of the screen increase conversion rates, how does a customer sign-up process affect customers completing their purchases?

These changes can mean millions of pounds of extra revenue for internet companies. Of course not all customer behaviour changes involve the website itself.

LoveFilm has recently made a change to the way its service works. It's quite a subtle change, but I have no doubt that it means extra revenue for them.

It used to be that if you received two DVDs at the same time from LoveFilm, you would also receive an extra return envelope with your DVDs, in addition to the envelope it arrives in, which you usually convert in to a return envelope. LoveFilm are desperate for you to return as many DVDs in one envelope as possible. Obviously sending two DVDs back in one envelope means that their postage costs are halved.

Fair enough. When I did happen to watch two DVDs in short succession, I would return them in the same envelope. However, like most people I usually watch them at least a few days apart. Once I've watched one, I want it sent back so I can get the next semi-surprise DVD as soon as possible.

But that doesn't help LoveFilm's bottom line.

So, recently they have stopped sending you a spare envelope as standard. This means that if Lovefilm sends you two DVDs at once, you can't necessarily just watch your DVDs and send them back as you watch them. Of course, they say you can send them back Freepost in your own envelope, but that costs me an envelope, and you can be sure that most people won't be bothered to do that.

The obvious cost saving is reduced postage costs, but I do wonder if they save more money by altering customer viewing habits. If you wait till you've watched both DVDs before sending them back then you hang on to your DVDs longer, which means less DVDs get posted out, which means less handling costs and less DVDs need to be held by Lovefilm.

What really annoys me, is that Lovefilm claim that you can still request an extra return envelope to be sent. At first it was quite easy to request an extra return envelope. My memory might be playing tricks on me but I am sure you used to just have to click a button requesting a new envelope. Now, however you have to search around the website to get any info about it, and eventually if you dig enough you will find that to get a return envelope you have to send them an email asking for one.

/edit Thanks to the comment from the helpful LoveFilm user experience bod below, I have now been shown that there is in fact still an easy link to request an extra envelope. Doh! I've clicked it so only time will tell if I receive one.

I have done this two or three times, and each time I get an email back telling me I will receive an extra return envelope with my next DVD. I have yet to receive an extra return envelope.

It's not that it hugely bothers me - I've been maxing my account out on Battlestar Galactica recently anyway! It's just irritating that Lovefilm have moved in to that phase of their success cycle when they do things that are just irritating to customers, but which probably result in higher revenues for the company. We've seen Ebay do it in spectacular style, by giving the impression that they almost want to alienate their entire customer base. It would be a shame if Lovefilm went the same way.

That said, I'd say about 1 in 4 of the DVDs I receive these days are nearly unwatchable. I'm sure it didn't use to be so bad.

and another question - if the DVD pouch doesn't mention the DVD on it, does it really matter to return it in the same pouch? I can't see any kind of chip in them...

eventually DVD postal services will die off just like visiting your local Blockbuster. We'll all be downloading all our movies (legally that is). I wonder if Lovefilm will still be around then...

5 comments:

lucy.spence said...

Hi Major_Grooves

Lucy Spence from the User Experience team at LOVEFiLM here (thought I’d better make it clear that I work for the company in question before I start!).

This is a really interesting post you’ve written with some very good points. Yes, we do what we can to reduce postage costs, and we’ve made some changes recently. People were telling us they were receiving too many envelopes, so we made some adjustments that will hopefully mean people receive a more appropriate number of envelopes according to their viewing/posting habits. In your case it looks like we still have some teething issues left to resolve, and we’d greatly appreciate you help in identifying how we can improve the service.

However you should still be able to request envelopes at any stage without having to send an email. There’s a link to the left of you rental list that says “I need a return envelope” which should get one sent out to you within the next 48 hours. Failing that there is a free post address if you’d like to return you disc sooner, which is displayed when you request additional envelopes:

FREEPOST RRAZ-ZJJS-XESH
LOVEFiLM UK Limited
Peterborough
PE2 6UG

There’s also an FAQ on additional envelopes here:
http://www.lovefilm.com/help/dyn_faqs.html?faq_cat=help_centre_home&editorial_id=11174
If you’ve used this option before and still not received the actual envelopes, then that’s something we need to resolve – it is certainly not intentional.

However to resolve it we will need some more of your account details and it’ll be better to do that directly with our customer services team. Alternatively I’m happy to see what I can do to resolve the issue directly via twitter. My username is LOVEFiLMLucy: http://twitter.com/LOVEFiLMLucy

Regarding your comment about unwatchable DVDs it is an issue that we are continually working to resolve, and please help us ensure that these discs aren’t getting passed on to other customers by reporting them as a problem on the website and ticking the envelope. We can then pull them in for cleaning as soon as we receive them and ensure they don’t keep getting sent out.

As for the DVD pouch, as long as there is no identifying information on the pouch, yes they are interchangeable. However we recommend that people keep each disc in the pouch it was delivered as a precaution so that people don’t end up with a pouch that does have disc identifying information, with the wrong disc.

I hope that help and answers your questions, feel free to contact me should you have any other concerns.

Lucy

Major_Grooves said...

Well, thumbs up to Lucy Spence from LoveFilm for taking the time to write a long response to my post.

It would seem that - yes, there is an easy link to request a return envelope, so I was wrong in that respect. However, I had still requested an envelope from the customer service directly and despite being told I would, I still never received an envelope. Maybe this time I will get lucky! Maybe the link needs to be more obvious. As anyone involved in UI design will tell you, it is very easy for people to miss the obvious things that are right in front of them.

I'm still interested to see how this change affects LoveFilms costs. I don't have a problem with them trying to reduce their costs.

Koin said...

Dang,

This recession is really coming down hard. You don't really notice it until you start seeing it affect the works of microeconomics in some cases. Fiscal policy this, kenyesian economics that, but when companies are beginning to worry about postage costs, you know were in trouble!

keep writing!!

Anonymous said...

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Major_Grooves said...

Gay?

Worst. Comment. Ever.