A few years ago, when I joined Lovefilm’s agency team there was a story that did the rounds about Hotel Rwanda that has always stuck with me.
For those who aren’t familiar with the 2004 film, the story is about genocide in Rwanda in 1994. It’s incredibly powerful and stars Don Cheadle and Sophie Okonedo. Critically acclaimed and nominated for 3 Oscars including Best Original Screenplay.
While paltry relative to today’s war on content, back then it was a big deal for Lovefilm to have the title. Given its critical acclaim it’s no surprise that it quickly appeared on lots of customers’ watchlists and Hotel Rwanda DVDs were sent out to customers up and down the country (yep – DVDs in the post!!!)
So far so good.
But the Lovefilm team then noticed something strange. People who watched the film were churning out of the service. On the face of it, you could have easily drawn a clear link between the two, triggering all sorts of logical and affirmative (if irrational) action like delisting it.
But instead they dug deeper and realised that users were not actually churning out after watching the film, because they weren’t watching the film at all. Instead the critical acclaim meant customers asked for the DVD, but the tough subject matter meant they were never really in the mood to watch it, so it sat next to their DVD player for weeks. The Lovefilm business model meant most customers had a subscription limiting them to one DVD at a time.
So instead of being a great film courtesy of Lovefilm or admitting that Hotel Rwanda was maybe too tough a watch for them, the DVD became a symbol to subscribers that they weren’t keen on films after all. They questioned whether they really got enough value from their subscription. And they churned out.
Then Lovefilm did something very smart – when they saw someone had received Hotel Rwanda and not returned it after a certain period, they automatically sent them the next DVD on their watchlist out of the blue. Hey presto – the Hotel Rwanda churn problem went away. Yes, a nice positive brand experience on the face of it. But more importantly people could watch something easier and remember they liked films and the service again. And better yet, when they went to return that 2nd DVD, it wasn’t such a wrench to return Hotel Rwanda at the same time.
The Hotel Rwanda story serves as a reminder of how great insight and business growth means harnessing humans and machines. It’s important to triangulate with additional data and human instinct/experience, draw hypotheses (not conclusions) and build out a never-ending test and learn approach.
Author – Garrett O’Reilly, Managing Director, Hearts & Science
To read Garrett’s earlier article – Human & Machine: The Power of Both – click here.