I usually analyze actions like this in very simple terms. I ask myself, “What do I like?” If I concentrate on simple answers like “cheaper” or “faster” I am usually able to gauge the response of my fellow consumers. In this case I decided that Netflix would have to act soon to stem the flood of criticism and cancelled plans. Well, today they acted. They emailed an explanation. Big deal.
Consumers have seen enough companies go down in flames (Gateway computer, for instance) to know that executive/marketing types don’t always know what they’re doing. If you send a long explanation it means you think things are more complicated than just giving shoppers what they want at a price they’ll pay. They don’t care. That explanation is just to make you feel there’s some reason you can’t do that.
The email gives me the impression that Netflix executives think I would be happy with the rate change if they had just explained it more fully. Nope. That’s how politicians and college freshman dismiss those who don’t agree with them. No student in my Business Communication course could get away with such an ‘apology’ letter.
Netflix' worst mistake was sending an explanation at all. When I read it, I was looking for the “We know you hated this so here’s how we’ll make it up to you” part. There is none. Netflix wants customers to accept their service and rates again without addressing concerns in a tangible way. How about if I started paying Netflix only half what my plan costs, but sent them boring explanation emails? The email raised the expectation that Netflix understood their customers, their reasons for leaving, and the way the company could compensate them in part. The message disappointed that expectation. In fact here’s a direct quote from the email:
For the past five years, my greatest fear at Netflix has been that we wouldn't make the leap from success in DVDs to success in streaming. Most companies that are great at something – like AOL dialup or Borders bookstores – do not become great at new things people want (streaming for us). So we moved quickly into streaming, but I should have personally given you a full explanation of why we are splitting the services and thereby increasing prices. It wouldn’t have changed the price increase, but it would have been the right thing to do.
So, what should that email have said, since Netflix just had to send one? First paragraph: apology for shocking the customers with such drastic changes all at once. Second paragraph: pledge to do what is necessary to keep or win back our business. Third paragraph: announcement of partial rollback of rate structure, or a significant discount code (hint: 10% means nothing). Without this kind of basic business technique Netflix will not reach many consumers. Maybe they're the ones who don't understand.
