Netflix knows its future is in video streaming, but its roots exist in DVDs. So how do you nudge consumers to wean themselves off of lower margin DVDs to the higher margin streaming videos?
Introducing Qwikster, a knee-jerk reaction to a disastrous price increase announcement that was met with even greater consumer disdain. Many people put Qwikster up there with New Coke – but it might have been the right idea – just poorly executed.
Creating a separate business for DVDs will allow Netflix to buffer itself from a business model that (over the long-haul) will most likely decline. In creating this new division, however, they didn’t connect the old Netflix to the new Qwikster, so a consumer had to set up their preferences, waitlists, cues and billing data all over again. It makes you wonder if they were following the online banking model, which makes it so cumbersome to switch banks, that they expected subscribers to begrudgingly switch to streaming Netflix over setting up a new DVD account…)
All Netflix had to do was allow customers to conduct a simple transfer for a limited period of time, and they would have been less likely bothered by the change. Furthermore, providing an incentive to try the new technology (following the lead of the airlines when they introduced online booking) would have helped ease the pain.
So what can you learn from Netflix?
- Think about all the ramifications of significant changes in your business
- If the initial reaction to a major change is negative, take time to let it sink in. Sometimes it just takes time for people to adjust to change.
- Limit the knee-jerk reactions – they never seem to work out as you’d like.
I do not like the new Tide 2X. No matter how little I use, soap remains in dense fabrics, such as towels, and I can’t get it out. My daughter and I both have noticed that our clothes feel “itchy” with the new Tide. I have used Tide all my life, but I may have to change to something else, since I can no longer get “regular” Tide. Have others noticed this also?
Judy, Salt Lake City, UT
I used this product on a shirt of my husbands that had a new stain on the front. Bottom line stain is still there, I’ve used other products that worked much better than this one did. I would not recommend this product to anyone.
Miata, Waverly, NE
Companies don’t like to hear comments like these, or worse learn such comments are being shared with other people.
But those quotes weren’t pulled from a focus group nor from blogs, they were available on Tide’s home page from actual customers providing feedback regarding Tide’s products.
To take things a step further, Tide provides a slew of product reviews for all of its products so consumers can make an educated decision about the product in which they are interested.
In a time when consumers are asking for transparency (see SC Johnson’s new campaign about their ingredients) and using the social web (ie Twitter, Facebook, Yelp, Blogs) to share their thoughts, you have three choices:
- Ignore it and hope it goes away. (It won’t)
- Listen to what people are saying and respond in a defensive manner
- Embrace it and use it to make your products better and your brand more trusted.
Let me know what companies you think are being brave in their marketing.
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Interesting statistics of Facebook users versus the United States population.
By the Numbers: Facebook vs The United States [INFOGRAPHIC]
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