I had to weigh in on the Netflix debacle that’s all over the news these days.  In case you’re reading this in the future, you might remember this as the time when Netflix raised their rates as much as 60% and spun off the DVD-by-mail business to a new business called Quickster.  (I know it’s Qwickster, but I don’t think you should be so clever as to create something with several spellings…really, Quixtar rents DVD’s?)

But I digress.

Here’s the problem.

I’m a Netflix customer and have been for 10 years. I was amazed when I could send and receive DVD’s and not have to get tagged for ‘phantom’ late fees by my friends at Blockbuster.  And you saw what happened to them.

netflixNetflix is right in the middle of making the same mistakes.  There are two marketing mistakes that have and will continue to cost them.  I call these straight up mistakes and the cost has been the value of the stock dropping 50% in the past few months.

  1. I’ve learned everything from the media.  As a Netflix customer I’m on their mailing list.  I should hear from them directly.They should take the time to use email to tell me why this is good for me and why they felt necessary to take the steps they did.

    When you have a tool at your disposal, like email, you should use it fully to preempt potential problems or do damage control when you’re in the middle of it.

    Firing off a press release, a blog post, and a Youtube video just doesn’t cut it.  In the era when Social Media is meant to bring us closer together, Netflix has discovered how to use the Media to push us further apart.

    They should have used the familiar and personal nature of email to let me know why they felt it necessary to take these steps.

    Which leads to the next mistake:

  2. They have motivated me to look at other options.  Last quarter Comcast cable lost over 280,000 subscribers.  Why?  Have you seen your cable bill lately?Netflix was there to take advantage of a void in the market.  Where can I go to watch movies and not spend $80 a month?

    mmmm, Netflix streaming service seems like a good idea. I tried it, I liked it, I dropped my cable.

    It wasn’t Netflix that moved me to try Netflix streaming service (I’d read their offers to do so only about 50 times or so), it was the cable company’s inflexibility.

    Now Netflix with their desire to make me use two services, one for streaming video and one for DVD by mail, has told me it’s ok to look at other services.

    I haven’t explored Amazon, iTunes, or Hulu.com yet, but now seems like a good time to take a few minutes to look at other options.

    The point is this; your customers are only loyal to a point.  Loyal until they have a good reason to look around.


    Use your email messages to favor, protect, coddle, remind, love, and above all respect your customers so they don’t feel a need to look elsewhere.