Tuesday, 20 September 2011 11:57

What You Can Learn from the Netflix Mess

Written by Bob Seybold
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Maybe you pride yourself on offering great customer service. Maybe your clientele think you’re the best at what you do. Maybe you’re growing by leaps and bounds, adding new products and services.

Even if that's your company in a nutshell, just remember this: With every move that you make, always ask yourself, “Is it good for our customers?”

That question seems to have slipped the collective mind of the folks at Netflix, who are in the midst of a marketing nightmare. Since the company pioneered the DVD-by-mail service in 1999, many have sung its praises for the outstanding customer service it provides. But the company with the iconic red envelopes is getting a pink slip from nearly a million customers, and more could be canceling subscriptions soon.

Why? Because Netflix is taking a beloved service and making it more expensive and harder to use. It started back in July when Netflix announced a 60% price increase under a plan to separate its DVD-by-mail subscriptions and its Instant Viewing online service.

Now Netflix co-founder Reed Hastings has upped the ante by announcing that the reorganization will include a re-branding of the DVD service, to be named Qwikster. Netflix will be the Instant Viewing service. Separate names, separate web sites, separate monthly bills.

What was a synergistic service that analyzed your viewing habits and offered DVDs and Instant Viewing choices will now become two very separate entities. No more suggesting a similar Instant Viewing feature when you add a DVD to your queue of preferred films. Nor will they remind you that the DVD you want by mail is already available for Instant Viewing. Netflix won’t exist on Qwikster, and vice versa.

If you’re a Netflix customer, you get less convenience, less service and a bigger monthly bill, plus a dorky new name on those iconic red envelopes. And many of you are not happy.

Since the price hike was unveiled, some 800,000 subscribers have cancelled their Netflix memberships, and the company’s stock price has dropped by nearly 50%. Thousands posted angry comments to the Hastings announcement, and more cancellations are expected.

The move to separate the DVD and Instant Viewing services might make good business sense in the long run, as Netflix looks ahead to a world without DVDs. But what should have been delicate surgery to split the two seems more like an amputation without anesthetic to millions of Netflix customers.

There’s a lesson here for every company. Ask yourself, “Am I always thinking of my customers, to make the experience the best it can be?” If not, you could be standing side-by-side with Netflix, learning the hard way that goodwill and loyalty built over many years can evaporate quickly when customers realize that you don’t put them first.

Read 4172 times Last modified on Wednesday, 07 June 2023 06:13