Brian Bailey Preface to the Revised Edition

Lessons from Blockbuster

How often do you see a company significantly change its corporate reputation?

If I were writing this post six months ago, any Blockbuster lessons would be about what not to do. Blockbuster has always been one of my least favorite companies, due to their relentless pursuit of average. In my opinion, the Blockbuster approach is an average store with average selection and average customer service, leading to, you guessed, an average experience. And for this, they charge high prices! On the flip side, you basically cannot avoid them, which explains the approach.

The zenith of my Blockbuster experience came a few months ago when I asked if I could get a copy of my rental history, assuming that all the data was right in front of them, or at least would be if any of my movies were overdue. Here's how the process went:

1. Clerk looks at me with complete disbelief
2. Clerk starts to look for help, but then decides to find out if I really need this, assuming that I'm questioning a late fee or something
3. I convince him that I really just want a list of the movies I've rented (I keep a running tally)
4. Clerk admits that it seems logical that they would have the information available, but he believes there is a form that needs to be filled out
5. Clerk looks for form for 10 minutes, then finally asks for my name and number so he can follow-up
6. To their credit, I do receive a call, two days later
7. New clerk says that he found the form, but I need to complete a few more steps
8. First, return to my local store
9. Next, sign the document, which will be faxed to the corporate office
10. Wait 2-4 weeks
11. And just like that, I will receive my rental history, in the mail!

Needless to say, I passed. Despite this and other similar experiences, I decided to give the new Blockbuster Online service a try during the beta release. After over two months of thoroughly enjoying the service, I received an email that shows just how far the online group is going to improve Blockbuster's reputation.

The email was one of the best examples I've seen of proactive customer service that builds loyalty.

First, thank you. Second, we apologize for any issues our growth has caused. Third, here are the concrete steps were taking to solve any problems (before you have even complained). Fourth, here's a gift of appreciation ($8 worth of movies - no strings attached). And this is after they lowered their monthly price by $3 per month.

A reasonable explanation for this aggressiveness is the intense competition Blockbuster faces in the online rental business. I honestly think this is exactly right. If Blockbuster ever came to dominate this industry as it does physical stores, I doubt I would be receiving too many more of these emails. Nevertheless, I will enjoy the wonderful benefits of competition, and attempt to apply these lessons in my own organization.

Because of loyal members like you, BLOCKBUSTER Online™ has surpassed our growth expectations. While we're thrilled so many movie fans have turned to BLOCKBUSTER Online, The Movie Store At Your Door™, we know our rapid growth may have impacted our service to you.

We recognize the need to continuously improve and we are taking the following steps to do just that:


The U.S. Postal Service will now notify us when the envelope containing the DVD you are returning has been scanned in. This means we will send you your next movie before we actually receive the returned one. This means quicker turnaround times for you.

We are adding 10 new shipping locations in the coming months to speed more movies to your door.


We are buying more copies of both new releases and old favorites. This should reduce the time you wait for your favorite titles to ship.


We appreciate you using our service while we work to make improvements. We have added TWO E-Coupons to your account. These coupons are in addition to the coupons you receive every month, and they can be redeemed for FREE in-store game and movie rentals at participating BLOCKBUSTER® stores.