I’ve been a happy customer of Netflix for quite some time. But yesterday, Netflix had an epic marketing failure.
New pricing failure
They announced a new pricing plan, which essentially increases the cost of the service by 60% (with no new benefits of any kind).
Either you pay more, you give up streaming (convenient, but limited selection), or you give up DVDs by mail (slow, but much larger selection).
- If you increase prices, give more value; especially if the increase is this large.
- Tell your customers first – then send a press release.
- Don’t end your blogger (?!) blog post by reminding people they can cancel at any time. Yep, that’s what I’m going to do, because you just told me you don’t care at all about my business.
- If you’ve got bad news, don’t pretend it’s good news (or, don’t pee on my leg and tell me it’s raining).
- Soften the blow to your loyal customers by grandfathering them in, or giving them something extra (a better plan at the higher price?)
- Remember that your loyal customers got you where you are today (don’t get them mad -5000 comments on the blog so far and 32,194 on Facebook).
- Don’t drink your own Kool-aid – this kind of decision may look good to brokers and bean counters – but the customers pay the bills (no subscribers, no income)
What do you think? What could Netflix have done better? Do you have Netflix? Will you keep it?
Update: Just saw this post by Derek Halpern of Social Triggers on the right way to raise prices.