Price hikes are never going to garner rave reviews from customers. The decision to split streaming and DVD rental services and charge for each should have been the biggest issue customers had with Netflix. Thanks to some less than tactful PR and a few other missteps from CEO Reed Hastings, the web was abuzz with trash talk. Thankfully, it seems that Netflix has finally gotten it right.
In their two month late apology, Netflix announced that they would be splitting their services into Netflix for streaming and Qwikster for DVDs. It would be two separate entities, with two individual web sites that would not work together. Fans that were already upset over price hikes were now also peeved about having to do their movie viewing via two different services.
Last week Netflix scrapped those plans. Due to continued negative publicity and angry users, Qwikster has been abandoned. Sure, there will still be two separate charges for streaming and DVDs, but it can all be done in one user friendly space. In another announcement that is sure to delight the now skeptical Netflix users, there will be no further price changes. This is the correct decision that Hastings should have come to two months ago. Scratch that. Hastings should have made that decision before announcing any changes to the world.
A billing increase may be unavoidable, but there is a right way and a wrong way to do it. Hastings chose the wrong way. He sent Netflix into a downward spiral of bad publicity. In this economy, a simple (and timely) email explaining the reasoning behind the split in billing, an apology and a thanks for understanding and your continued business probably would have sufficed.
Before making your next major change at your company, consider how your customers will react. Weigh the pros and cons, and be sure to address the cons with your customers. Be understanding of their wants and needs. Put out fires before they start, rather than adding fuel to them as Hastings did with Qwikster. Unless you belong to the “any publicity is good publicity” train of thought… If that’s the case, be prepared to be raked over the coals by the unforgiving, almighty Internet.