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July 26, 2011

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TJ

Two others come to mind:

1) Don't sell it as something it's not. Netflix tried to spin the price hike as being the lowest price ever for DVDs. Technically it was (If you wanted a DVD package, it was minimum $10/month), but as a current customer, it looked like they were peeing on my leg and calling it rain.

2) This isn't so much an HR thing, but tell customers what's in it for them. My biggest issue with the price hike as a customer was that there was no value associated with the price hike. I'm paying more for the same thing. If (as is rumored) they increase their streaming content in the near future that's one thing, but right now there's no upside for buyers.

Dave

Chris, this is a good analogy, and I think you need to call out one more point to the learning piece at the end: Figure the long-term value of your staff into the decision.

In other words, there are different classes people at your company, and they are going to need different experiences. Highest-valued customers should be getting the best treatment. Those who are low-value for their role should be given low-value treatment.

Eric Barrett

I don't fault Netflix for making a business-based decision. It doesn't do me any good as a subscriber if they go out of business. But jacking up the pricing by 60% without much of an explanation is a terrible way to set expectations, reward customer / employee loyalty, or create any kind of satisfaction with the company.

Simply giving a realistic preview of why the change was necessary would have gone a long way to saving a lot of the blowback. Not to mention the potential millions of dollars Netflix may lose if customers are as ticked as the internets claim.

That kind of email certainly would have cost a lot less, no matter how long it took to write.

Sarah Rolph

I don't understand what people are upset about. I'm a Netflix customer and I had a positive reaction to the change.

They sent the email well in advance, it doesn't change until September, so I can think about it; if I do nothing, nothing changes.

They gave us free streaming for a long time; I never expected it to stay free. I don't use it much, so I can get the same number of DVDs I do now for less money by dropping the streaming. Or I can stay on the same plan and get the same thing I get now, DVDs plus streaming, for the same price.

What is the problem?

Tom

Nice.
I'd add: Don't trivialize the backlash. For the Netflix spokesman to shrug off the concerns by saying (paraphrasing) 'it's the price of a latte to most people' just didn't sit right with me. If you know you have an unpopular decision to make, at least act like you care about the people who get upset. Even if it's a token gesture. Remember how far Clinton got by feeling our pain?

A Facebook User

I always felt that Netflix was kind of too good to be true and that we better enjoy the shear amount of programming for such a low price. I had the option of spending a minimum of $80 a month for programming through cable or satellite with none of the instant streaming available due to my location. Or I had the option of putting up an antenna for local stations and getting Netflix for everything else. When the price increased I wasn't surprised- it was still a good deal for our family at $6 more a month. I think we have only begun to see the costs increase in this area- internet streaming. We cannot expect to get unlimited amounts of data for one set price. Eventually the internet picnic is going to end and everyone is going to be on the same page- so much for competition. Enjoy it while we can is my motto.

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