First strike and you’re out
4 May
In our personal relationships we have certain leeway to be, well, a bit crap once in a while. Friends and family judge us in the round; keeping some sort of mental tally sheet whereby all those times we go the extra mile and prove our loyalty give us a free pass for the time we forget their birthday (sorry mum).
However, as consumers, it seems we are the fairest of fair-weather friends. Last week The New Yorker charted the spectacular fall from grace suffered by Netflix following its disastrous decision last summer to split the DVD and internet-streaming portions of its subscription service – effectively doubling the price for customers who used both, some of who had been with the Netflix for a decade. As errors of judgement go, this one was truly catastrophic– by the end of 2011 they had shed 75% of their share price.
Looking back further this does seem like a one-off slip, if a massive slap-stick one, in and otherwise flawless track record. Up till then they had done it all right – pioneering a genuinely consumer centric service, attending to the details to make it work as seamlessly as possible, and giving away access to their streaming service via a free, multi-platform app rather than trying to sell a specific device. In relationship terms they were the boyfriend/girlfriend that made your mates laugh, were loved by your parents and consistently rocked your world in the bedroom even after 10 years of monogamy – they were the complete package.
However, all the brownie points they accumulated over the years seem to be less meaningful than a James Blunt love song in the final analysis. In fact, all this goodwill may have actually worked against Netflix. The higher our expectations; the more bitter our disappointment when they are dashed. The worst thing you can ever do is make people who feel loyalty to you think you are trying to exploit their fondness for you. Upfront greediness consumers can deal with – try and slip it in through the back door and you’re a million times worse than the honest crooks.
The purpose of building loyalty is not so, at some point down the track, you can squeeze your customers for all they’re worth. It’s about playing the long game and building a brand with longevity. If you want a long term relationship and not just a fling you must, I repeat must, act with genuine and scrupulous fairness day-in-day-out, without fail. This is what brands like Google have done so well – managing the shift to monetising services slowly and carefully so customers get used to it – and continuously developing a pipeline of new free services to add value now and be the cash cows of the future.
Do this and your business and your customers will develop in tandem – the way all good relationships should.










