Don’t Mess with Customer Loyalty, Netflix!
Netflix just announced a 60% increase in rates and they drove shock waves through thousands of loyal customers who absolutely loved Netflix. I say “loved” because many of the comments, blog entries and Tweets are saying how Netflix is screwing over their loyal customer base. With prices for single monthly DVD rental + instant viewing going from $9.99 to $15.99 they have just said to customers – “we want more more money— your money—and we don’t care about you.” Nothing’s changing, no incredible new features, services or alliances that give you more. Just more money.
Netflix posted the announcement on its Facebook page after 10:00 AM on July 12th PST. There’ve been 38,440 comments posted after one day and only 791 people clicked on the ‘Like’ button!! Comments like “what are you thinking?!” “Canceling TODAY!, Hello RedBOX” (a competitor) are flooding the internet.
What was Netflix thinking? I totally get they want to push customers away from the DVD model so why not price it more expensively? Yeah, we’ll loose a few customers but how poorly can you manage this kind of transition? DON’T ever let the beancounters get final say on how pricing changes. There are numerous ways they could have transitioned this without pissing everyone off. But they didn’t. Another reason big companies and brands that think they dominate end up screwing their customer connection.
When it comes to keeping and building on brand loyalty they are going in exactly the wrong direction. I call this the AT&T model. We know you need us, use us and have little choice but us so why not give us more of your money for the experience? AT&T has long made it their model to reduce customer contact and service and charge for everything they can. This, as a result, has produced an almost universally negative customer opinion of AT&T. Who cares? Eventually there will be more choices for phone services, landlines are going away given into cell phones or VOIP phones and now Google phone. Currently, AT&T can dominate the cell phone market but they are threatened and customers will eventually need to matter more – but not now. For Netflix, the competition is fearce and although they have a lead in the market of instant video content online, Amazon is coming up fast and must be taken seriously as does Hulu Plus.
So as brands go, I think our friends at Netflix better rethink this increase and pay attention to their loyal followers before they feel f***ked over and dump Netflix for something else when the opportunity arises. Excuse my strong language, but warranted in this case, I think.