Dealing with customer service: How Netflix and Sirius XM handle cancellations

While scrolling through my YouTube subscriptions the other day, like so many digital media consumers, I came across a thought-provoking video from Hank Green on the popular Vlogbrothers channel. It got me thinking about the difference between Netflix (NFLX 2.06%) and Sirius XM Satellite Radio (SIR -1.85%)although he did not mention any of these companies.

Hank’s point was that companies that offer subscription services should make it easy for customers to cancel the service and perhaps come back later. Being polar opposites on the ease-of-cancellation spectrum, my thoughts immediately jumped to streaming media veterans Sirius XM and Netflix.

Canceling your Netflix subscriptions? Easy!

Let’s start with an easy way of doing things.

Netflix makes it easy to cancel subscriptions at any time — no questions asked. They even boast about it in their official long-term business plan:

We are a relief from the complexity and frustration that most (Multichannel Video Programming Distributor) relationships embody with their customers. We strive to be extremely simple. There is no better example of this than our hassle-free online cancellation. Members can leave when they want and come back when they want.

And it really is quite easy. Open your Netflix account settings on your preferred streaming platform — phone, tablet, smart TV, web browser. Below your subscription plan selection and payment method, you’ll find a highlighted button that says “Cancel Subscription.” Click or tap on it and Netflix gives you four options on the next page:

• Complete the cancellation
• One month break
• Switch to a lower priced plan
• No change, just hang around

I think it’s important to note that the first and most obvious option is to leave the job. There are other alternatives, but Netflix isn’t pushing them very hard.

If you cancel your service, Netflix keeps your watch history, recommendations, ratings, and game history (including saved games) for 10 months in case you change your mind. This is a low-stress approach to account cancellation. You’re free to leave whenever you want, welcome back whenever you feel like it, and maybe you’ll tell your family and friends about your hassle-free Netflix experience.

Canceling your Sirius XM subscriptions? Luck!

If Netflix makes cancellations easy, how hard can it be to ditch a Sirius XM subscription?

Well, it is a daunting process with many steps.

First, you need to know how you signed up for your Sirius XM service. If this was done through your Sirius XM app Apple iPhone or Android phone, you must use that system’s app store to cancel your service. Other third party resellers include Roku and T-Mobileeach with its own unique cancellation process.

The company’s instructions say nothing about the services that come with the purchase of a car. This might count as a Sirius XM direct deal, or it might not. Again, it’s up to you to figure out where to go and who to talk to.

Maybe you were lucky enough to start the service or a free trial directly through Sirius XM, with or without a car dealer involved in the process. In that case, you’re in luck — the company provides a phone line and link that should do the trick. Note that the online option is fairly new, if it even works. Forty-six states filed and settled a class-action lawsuit to change Sirius XM’s cancellation process in 2014, and subscribers were still complaining about exorbitant wait times and obtuse menu systems in 2023.

That matches my personal experience. The company offered free trials of its web-based radio service during the COVID-19 lockdown, and I took them up on the offer. But I found myself using this option very rarely and ran into a maze of phone menus and long wait times. The minimal pleasure I got from that attempt wasn’t worth the hassle of getting out.

I probably won’t try Sirius XM again because I found it too frustrating to end a simple free trial — six years after the company was ordered to avoid “harassing or abusive” treatment of cancellation requests.

Image source: Getty Images.

Quality of customer service — a sign of deeper differences

Sirius XM’s arduous cancellation process may result in several more months of service payments from departing customers, but at the cost of losing brand affinity. I’m not alone in my frustration, as evidenced by multiple lawsuits filed by many states with the support of hundreds of thousands of disgruntled former subscribers.

Netflix’s approach is much healthier. Sometimes people have to leave for many reasons. Netflix is ​​letting them go and hoping to win them back someday with more and better exclusive content. “Members can leave when they want and come back when they want,” and the company’s customer service representatives won’t try to change your mind over the phone.

I actually canceled my Netflix service once, but came back when the digital streaming portfolio started looking interesting. Check-out was easy, even in the days of red envelopes for DVDs, and so was renewing the subscription. Netflix still had my viewing history recorded, along with my long queue of DVDs. No sweat.

I imagine a lot of Netflix subscribers dating and hanging out with seasons of their favorite Netflix Original shows. It’s the company’s job to keep flaky subscribers coming back and maybe stop their cancellations because they find something new to watch.

Customer service policies aren’t the whole story, but Netflix’s more user-friendly strategy is a big winner. That stock is up 906% over the past decade, while Sirius investors have been left with one zero percent total return over the same period — including reinvested dividend payments. In business terms, Sirius XM’s revenue more than doubled thanks to its acquisition of Pandora in 2019, while Netflix saw a 600% increase in sales.

I know which stocks I prefer to own and which company deserves my business. The two effects are closely related.

And I think Hank Green would nod in agreement. A great user experience matters, even when subscribers try to leave.