Customers have a Beef with Netflix
Netflix’s market capitalization has dropped over $4 billion since it announced the separation of its DVD rental and streaming movie service. The stock price has fallen from $208 per share to $117. They lost 500,000 thousand subscribers last month while Blockbuster gained 600,000. After insisting that the creation of Qwister would benefit the company and its customers, today they decided it was not such a good idea after all.
There are several lessons to be learned from their mistakes. Companies cannot just make changes to their service without appreciating how their customers will be impacted. In addition to irritating their base by dramatically raising the cost of the service, Netflix also complicated things by requiring access and passwords to two websites. While the decision to create Qwister, (more like Jokester), was good for the managing the business, it was terrible for customers.
Similarly, companies, like Broadvox, that offer hosted services need to reflect carefully on any changes that will impact the ease of use and habits of its customer base. Features should be migrated to new platforms as technology and services evolve. Price increases should reflect either an improvement in value or match inflation. Finally, offer real apologies not the in genuine, “If I offended anyone...” You know you offended someone, so just say you are sorry.
As more services move into the cloud, there exists the risk that more companies will underestimate the impact of change on its customers. In which case, don’t be surprised when customers have a legitimate beef.
I am going on vacation Wednesday and so the next blog will not be until Friday. See you then.