Best Practices Are Not

Monday, October 3, 2011 by:David Zahn
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In speaking with clients there is a pervasive theme that many seem to subscribe to in setting goals, strategies, and objectives. The ‘holy grail’ for these clients is the determination and definition of industry, “best practices.”

Unfortunately, aspiring to incorporating the industry’s best practices is a losing strategy that is focused on the wrong basis of comparison. Rather than comparing oneself to a competitor’s last effort, the more appropriate comparison is to the CUSTOMER’S wants for the future.  By focusing on what is currently in place and available in the market, the best one can do is to mimic another.  By virtue of being second to provide something to the market, the payoff can ONLY be to split the available market.  Furthermore, because one is mirroring what another has already incorporated into their approach, the possibility exists that the competitor is already considering how to either improve upon it or even replace it with something innovative and revolutionary.  By aspiring to reach the “best practice” level, the best one can achieve is an evolutionary change.

So what to do?

Rather than benchmarking against what other competitors are doing, the more appropriate benchmark is against customer wants, needs, or desires.  Seek to uncover from your customer:

  1. What frustrates you about the way services are provided, products are delivered, or ordered?
  2. What kind of product features do you wish you had?
  3. What outcomes are you trying to accomplish?
  4. What do you currently think is “just the way it is” or “the way it has always been?”
  5. What do you have to” put up with” in order to complete the business transaction?

By reframing the vision of how to improve competitive positioning by focusing on the customer and outcomes over trying to match what a competitor is already doing and has become associated with providing – the company can blaze a new path that it alone is known for and has no competition in providing.

Caveats

It is not always easy to get a clear answer by asking customers the above questions because they are not the kinds of questions that are commonly asked.  Therefore, you may have to provide prompts or allow the customer to really think about it before responding.  Because many customers accept the standard offering without really questioning “what could be” – they have not invested much time in thinking about product improvements.

However, if allowed to watch how someone uses or interacts with a product (and what they need to do on their own to support the use of the product, get ready to use it, steps taken after the use of the product, etc. it is possible to gain some ideas on how the product can be improved or the experience of using the product can be more pleasant/effective/beneficial.

Lastly, the history of product innovation contains many examples of creative entrepreneurs that recognized needs or product ideas that were not at all based on existing paradigms (competition or customer), but rather were insight-driven as a result of advances in technology, manufacturing, or took advantage of unique synergies.  Some of the most obvious are:

  • The automobile is not a better horse and carriage
  • The internet is not an improved telephone
  • The combustion engine within the automobile leverages the synergies just as a web browser harnesses the synergies of what the internet offers.

Each of these looked at a way of improving the customer’s capabilities by looking past “best practices” and competitive benchmarking and envisioning approaches that were complete changes to product or service offerings.

Categories: General

Peaceful Easy Feeling

Monday, September 26, 2011 by:David Zahn
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One of the hardest things to create for a business is the sense of culture or community amongst the customers and the staff. Sure – some businesses focus on creating networks of hundred or thousands of people that “like” them on a social network, or create databases of names of visitors to websites – but the true sense of belonging somewhere and feeling comfortable as a customer often remains elusive.

While purchases are made at numerous businesses, the number of transactions where the customer looks forward to engaging with the business and animatedly talks of the experience with others remains precioius few. Such a business has recently opened here in Connecticut that scores on numerous points to make it a destination.

Ruggiero Family

Tucked away in a residential community in Wallingford is a newly opened vineyard being run by the Ruggiero family, Paradise Hills Vineyard & Winery.  Uncles, Mom & Dad, daughters, and even a grandmother patrol the grounds offering everything from explanations of the wine, inquiring about customers’ interests in food choices of restaurants that delivery in the area, and sharing local history that dates back to the Revolutionary War.

Local business unlocks the experience mystery

The beauty of how this harmonious family melds their strengths is evident in the packed outdoor deck and indoor seating on a recent weekend day.  Natalie (one of the daughters) beamed a 1000 watt smile as she welcomed people to the vineyard.  Madeline (a daughter) has expertise in wine-making and is a certified chef who is only too willing to offer food pairing suggestions and to confirm that everything is to the cust0mer’s liking.  Brenda (the proud Mother) was exuberant in her pride in her family, the grounds, the building, and how the business is growing.  There were other family members seen servicing customers or ensuring that the needs of the business were being met, but they all managed to be present without being intrusive.

The Product

There is an air of mystery, sophistication, and clubbiness that wine drinkers share – but in the wrong dosages, it can quickly turn to snootiness, exclusivity, and border on obnoxiousness.  This business manages to make the drinking, selecting, and appreciation of wine to be fun, educational, and it all occurs in a relaxed atmosphere.  Here is how:

  • Upon entering the tasting room, the various wines available are explained in a very accessible couple of sentences.  No high-falutin’ language or hard to decipher metaphors.
  • The room itself invites people to talk with each other and to relax.  The ambience, set-up, furniture, and bar are all welcoming.
  • The customer is greeted by a friendly family member who takes the time to talk with and not AT the customer.  By the time the first taste is poured, the customer feels like s/he is visiting a friend in their home.
  • The wine itself is wonderful and causes anyone who thinks that good wine can only be found in California or in Europe to rethink their assumptions.
  • The music playing is a combination of instrumentals, easy listening standards, and light jazz numbers that provide just the right context.
  • The outdoor deck beckons the customer to exhale, enjoy the view of the grapes growing, and sip on wine as picnic baskets are opened and laughter permeates the air.

In the span of ten minutes, the customer goes from the frenzy of traffic, errands, daily pressures to the most relaxed, oasis from home without every boarding a train or plane.  That certain something that defines an experience, makes someone loyal to a place, or causes someone to seek it out someone to tell it to is rarely about price.  Cheap can be bought anywhere if one is willing to make concessions or sacrifices.  No, this is about gaining something unexpected. Doing something beyond the anticipated.  The Ruggiero family’s Paradise Hills Winery is aptly named.  For just a few hours – it is an escape from the everyday.

Categories: General

Physician, Heal Thyself

Wednesday, August 31, 2011 by:David Zahn
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There was a recent article that appeared on MSN’s homepage that would make an for-profit owner shake his or her head in bewilderment at the quotes for attribution of those interviewed. The URL to the article is http://health.msn.com/health-topics/slideshow.aspx?cp-documentid=100279644&imageindex=1, but the following summarizes the gist of what was reported.

Dr. excuses for why they run late

The article explains why patients often have to spend idle time waiting to be seen by the Dr., first in the waiting room, and then often, once escorted into the examination room.  As compassionate and understanding people, we can all understand and accommodate if an emergency should occur that takes the Dr. away from the schedule.  Those instances are not the ones discussed.  These are the excuses offered by the Drs:

Reasons You Are Not Seen on Time
 
  1. Patient has questions - the article puts the blame on why appointments are not kept on the fact that patients come in with a list of concerns or questions to ask the Dr.  So, rather than allot for that time, the Drs. want to blame the paitents for having the gumption to actually care about their well-being.  Any business person that EVER tried to blame a PAYING customer for wanting to understand a product, service, or offering would be laughed at and shown to be a fool.
  2. Vendors want to talk to them - So, because the Dr. can’t schedule vendors on NON-appointment time or don’t have the ability to tell a vendor it is an inconvenient time, a patient with a check in hand is made to wait?  Really?  And that is acceptable?
  3. Schmoozing with patients - the article points out that at times the Dr. will socialize and share stories of pets, kids off to college anecdotes, or other topics and that will “bleed over” into other appointments.  I am all for sharing elements of ourselves with others in the course of the work day.  But, do it within the confines of the time allotted or make other time for it.  The waiting CUSTOMER should not be disadvantaged.
  4. Administrative commitments - the next excuse is that meetings, paperwork, or other administrative tasks take time or go past the time allotted.  Because the Dr. can’t figure out how to project or forecast time is no excuse to keep a patient waiting.  Would we accept that excuse from ANY other business?  Sorry, your furniture can’t be delivered as promised, the delivery company has too much paperwork.  Pardon us, your dinner won ‘t be ready on time, the supplier has documentation requirements we have to meet.  Please. 
  5. They can’t manage time - One Dr. smirked that the medical professions don’t manage time and that they have the ability to be arrogant about it without real consequences.  He was honest about it, quite correct, and it should make every patient that has ever waited for a Dr. seethe to read it is viewed so flippantly.
  6. Family emergency - the explanation of “we are people too” and have things happen in our lives that keep us from keeping commitments.  OK, we get it.  Sure, that happens upon occasion.  BUT, even in those situations…let someone know and give THEM the option if they want to stay or reschedule.  In what other business can you get away with not calling in to tell your boss that you are going to be late (and the patient is technically your boss!)?
  7. Giving bad news - One physician claimed that having to deliver bad news takes more time than expected or than other appointments take.  Yea, that may be true.  So, leave yourself time in your day for that – don’t schedule back-to-back-to-back appointments so that if ONE runs long, the others are not adversely impacted.  Oh, and if none of them take more time than expected, you now have the time you needed for the paperwork and vendors that obstruct the scheduling.
  8. Bio Break - One Dr. wanted consideration for the time it takes to go tend to nature’s call.  Well, if that is the reason why the appointments are running late, it is clear that the Dr. has not taken care of that urge – because that is clearly a full of crap reason to use as an explanation for why a business habitually runs late.

If the schedule should get out of kilter, let the subsequent patients know BEFORE they have been forced to endure long waits.  No business should be run with that being an acceptable practice.  Most patients understand it is possible at times that things get a little off-track.  However, adjust the double-booking and amount of time devoted to each appointment or don’t be surprised when patients decide that it just is not worth it!

 

Categories: General

Market to Me, Not Yourself

Tuesday, August 23, 2011 by:David Zahn
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There is a confusion that seems to be pervasive among senior executives.  Far too many executives seem to be delivering self-congratulatory marketing messages to bolster their own egos – but not share any advantages or messages that impact the existing or potential customer.  The latest example of this was shared in a post written by Michael Sansolo in Tuesday, August 23rd edition of www.morningnewsbeat.com.   Mr. Sansolo writes of a recent trip he took on United Airlines that began with a video presentation of the President of the newly merged United Airlines and Continental Airlines; Jeff Smisek.

Why Do I Care?

The presentation included commentary of how the merger of the two behemoths was going and of all the progress that was being made.  So far, so good.  However, Mr. Sansolo correctly takes umbrage with the content of the message.  Rather than sharing how the merger will impact the customer/traveler/passenger; the message is all about the internal issues that are being addressed.

The message caused Mr. Sansolo to question why he was even listening to the message and why it was being shown to passengers during the boarding process and take-off.  Here is what the core message heard was:

“we are making progress painting our planes with the revised logo.”

 

What would have been more helpful and meaningful for the traveler looking to cram their luggage into the overhead compartment would have been:

  • How the merger impacts the traveler’s ability to fly new routes or avoid changing planes to make connections that are now direct flights
  • Explain how the combined company has created synergies or new efficiencies that reduce expenses for the traveler looking to manage travel budgets
  • Share how the experience of traveling with the company will now improve over what each company was previously able to provide
  • Offer something new or of value to the traveler as a result of the bringing together of the two firms.

Sadly, that was not at all the message.  Instead the focus is on the paint job.  Putting a new logo and a fresh coat of paint on a broken piece of equipment does little to change the service or product being offered.  Whitewashing the fence does not make it any sturdier – just makes it whitewashed.  Can the plane land any better as a result of the new logo?  Can the flight attendants provide improved service?  Will the flight time be reduced?  Are costs reduced (in fact, one may lament that a portion of the ticket price being paid is for the new logo and paint – and few passengers will consider that money well spent)?

Lessons in it

This is something that every senior executive should consider and think about as they apply it to their own businesses.  What is the customer’s take on the message?  How will the marketing effort be viewed by the eventual purchaser of the product or service?  If the message is simply self-congratulatory and does not include how  the customer benefits, it may be time to reconsider the message.  Every customer, at some level is thinking (and some will say) – What is in it for me (WIIFM)?

Are your marketing messages designed to applaud your own actions or are you sharing something that truly matters to the customer?  If the answer is unclear or worse yet, is not focused on the customer’s needs or benefits; then you are only putting a coat of paint on a rusty piece of equipment that still is as creaky, non-differentiated and mismatched to customer needs as ever.

Categories: General

A Diamond in the Swamps of Jersey

Tuesday, August 16, 2011 by:David Zahn
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When people think of New Jersey, they often think of Turnpike exits, the smell of the refineries, the Sopranos, the cast from “The Jersey Shore” and the musicians who have come from that state – Frank Sinatra, Bon Jovi, and Bruce Springsteen. Often, the state is used as a punchline and is reduced to a caricature for others to laugh at.

The swamps are an image many associate with the state of New Jersey

Morning Jolt

So, it is with minimal expectation that I pulled into a Panera Bread site in Wayne, NJ just barely able to suppress a yawn before my early morning meeting with a client.  Having already been in the car for over 2 hours and not even 8am yet; my eyelids were mere slits as I stumbled to the counter.  While ordering a caffeine fix and a pastry, the woman behind the counter delivered a much more impactful eye-opener than anything poured hot from the urn.

I was greeted by the following in rapid-fire succession:

  1. Hello, my name is Denise – what is yours?  (not in an accosting way – in a true attempt to form a relationship and be friendly)
  2. I have not seen you here before – are you in town for business (said, as she greeted and called other customers by name as they walked in the door and kidded with them about having the “usual” or turning to her other counter emplloyees to alert them to get a particular food item or beverage ready so that when it is that patron’s turn to order, it would be ready and waiting for them
  3. As I placed my order, she asked if I had a Panera Bread card (I did not).  She immediately told me that if I would register right there and then, she would be able to “comp” my order.
  4. Noticing the briefcase on my shoulder, she asked if I wanted to connect to their free Wi-Fi or preferred to use their kiosk set up for that purpose.

So friendly, helpful, and truly focused on making my visit to her store (and that is how she viewed it – she awakened at 4am each morning to open HER store – even though she was an hourly employee.) that I actually modified my plan to take my coffee and pastry and return to my car for the rest of the journey to my client. Instead, I took my order to a table and opened up my laptop, connected to the internet, and observed her interact with others.

Denise continued to greet people, joke with them, hawk their loyalty cards, and upsell products left and right.  She was a pleasure to watch and a true gem of an employee.  Like an Emcee up on stage, she integrated and weaved the efforts of the kitchen baking goods, other counter personnel, and the customers into a human drama that was replayed over and over.  People with scowls, sleepy looks, and distracted or lost in thought shuffles up to the counter left with smiles, a lift in theri step, and a laugh.

Front line employees are the diamonds in any business that attract customers.

Most Important Person

With a genuine, “Good Morning” and an upbeat personality that really loved what she was doing, where she worked, and the people she came in contact with; this employee changed the start of the day for nearly every person she came in contact with that day (and likely every day she works).  Her Manager made a great decision in hiring her, but an even better decision in letting her personality shine and sparkle.  Her banter was constant, and while she never lost professionalism, her personal approach with each patron ensured that they felt that she was there only for their benefit and had waited for them to walk through the door.

She made each customer feel like they were the most important person – but from the business’ perspective, she was the most important person in that entire store/restaurant.  If the other locations are as well staffed as this one, you would be doing yourself a favor by stopping in and observing the importance of front line employees – http://www.panerabread.com/

Categories: General

Bank vs. Credit Union

Monday, August 1, 2011 by:David Zahn
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One of the most critical decisions an entrepreneur makes is often one that is not given a whole lot of thought.  The determination of where to form a financial relationship that includes; checking account, savings, investments, loans, etc. is of vital importance and worth understanding the options.

Figuring out what financial institution to use is a key decision.

Differences between Banks, Credit Unions and Savings Institutions

For some, the terms; bank, credit union, and savings institution may be used interchangeably. However, a closer look reveals some differences between them that are worth considering as a business customer.

Governance Issues:

Banks, Credit Unions and Savings Institutions operate under federal or state charters. Their deposits are insured (up to $250,000, not everyone realizes that it is not for the total amount if it exceeds that amount).  The two federal agencies that provide this insurance are: the Federal Deposit Insurance Corporation (FDIC) or the National Credit Union Administration (NCUA). All institutions are subject to periodic regulatory and federal insurance examination.

Bank -  Banks are community, regional or national for-profit business corporations owned by private owners, investors and governed by a board of directors chosen by the stockholders.

Credit Union – Contrarily, a Credit unions is a non-profit financial cooperatives owned by their members and governed by a board of directors elected by, and from among, those members. Most typically, there is a common bond among the members.  Those commonalities may be that the members belong to the same organization or living in the same geographical area. Credit unions accept deposits from their members and use them to make short-term loans. Deposits are regarded as purchases of shares, and all earnings of the credit union are paid out as dividends to members/owners.

Savings Institution – Savings institutions (also called savings & loans or savings banks) specialize in real estate financing. They can be structured either as corporations oras what is known as a mutual (defined as a type of business where making a deposit is like purchasing stock in the organization). Savings institutions always have the letters SSB or FSB after the name to indicate whether they are a state savings bank or a federal savings bank, respectively. Both types are governed by an elected board of directors.

Range of services

All of the above financial institutions  offer similar basic banking services (checking and savings accounts, consumer loans, etc.).  However, the larger or more comprehensive ones may offer additional services like; credit cards, mortgages, foreign currencies, etc. Each has some special features.  Generally:

• Banks emphasize business and consumer accounts, and many provide trust services
• Credit unions emphasize consumer deposit and loan services
• Savings institutions emphasize real estate financing

Comparing Bank vs. Credit Union

Since a credit union’s primary focus is its people, or co-owners, they are more concerned about making you happy than turning a profit. Customer service tends to rate higher in Credit Unions than in Banks. As a result, credit unions typically offer more educational services and seminars to teach you about all financial products so you can make the best decision. Banks, on the other hand, may be more inclined to recommend only those products that bring in higher corporate profits.

Also, it is informative to note that as a not-for-profit organization, credit unions have many advantages over banks.For instance, they are exempt from most state and federal taxes, do not have many marketing costs, or high salaried executives. This allows credit unions to pass on great rates to their members, including:

  • Higher Interest Rates on Savings Accounts
  • Lower Rates on Auto Loans, Mortgages and Credit Cards
  •  Free Checking Accounts
  •  Lower or No Penalties for Overdrafts and Late Payments
  •  Your money is also just as safe as with a standard bank since up to $100,000 of your cash is insured and regulated by the National Credit Union Association, which is the same as the Federal Reserve Bank’s coverage.

However, there are downsides to a credit union.  Among them are: lack of convenience (evidenced by fewer branches), less ATMs, and smaller universe of product/service offerings.   If you choose to pursue locating a credit union, you can search on www.findacreditunion.com. 

It serves your business purposes well to remember that a bank is a publicly traded, for-profit organizations. Unless you have a personal banker (usually offered to larger customers), you generally will not receive the same level of service and satisfaction as you would from a credit union. Rates, fees and penalties will undoubtedly be higher too, but these inconveniences may be outweighed by the benefits.

Banks will have a much larger selection of products for you to choose from, including retirement plans, stock investing programs, and other services not offered by credit unions. Secondly, banks can offer more convenience with more ATMs and more branches, and it is as simple as walking in the door to join.

So when deciding between a bank and a credit union, you have to think about your business goals and personal needs. If you want better rates and more personalized service, go with the credit union. If convenience is your number one criteria then stick with a bank for your personal banking needs.

Categories: General

Do, Manage, Consult, or Coach

Monday, July 25, 2011 by:David Zahn
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At any given time in the ebb and flow of conducting business, an executive will have to choose one of four courses of action:

  1. Do – many executives climbed to their senior position by being able to perform the tasks of subordinates at a high (often higher than their peers) level.  Rather than spend time developing the skills of subordinates, it is often more expedient in the short-term to just do the task him or herself.  A side “benefit” of the executive doing the tasks of subordinates is that the subordinates do not learn how to do the tasks (which ordinarly, would be a negative).  However, as long as the subordinate does not have the skills, knowledge, or abilities to perform, the executive has the “power” to resort back to what is already mastered and there is a belief that that translates to job security, power, and value to the organization.
  2. Manage – Some executives recognize that they cannot do all or most of the tasks of subordinates and decide that certain tasks can be better handled by managing the efforts of their teams, direct reports, or subordinates.  The focus has moved from the executive being the “super-technician” who is the “best” at something and does it, to assigning, directing, monitoring, and evaluating the performance of others.  The decision-making of, “how, why, and when” to perform are centrally-controlled by the executive and there is little autonomy afforded to the subordinate employee.
  3. Consult – Another approach used is for the executive to perform more of a role of consultant or mentor to the subordinate.  In this role, the executive still retains a level of expertise that is inequitable to the subordinate’s and tries to relate that insight, experience, and expertise to the employee in a quasi-directed, but potentially non-binding way.  The executive makes herself available to the employee and may provide pointers, hints, or techniques to consider.
  4. Coach – For most people, the image of a coach that comes to mind is of a master motivator that rallies a team (usually an athletic team) to achieve greater heights than they would ordinarily achieve.  However, even in that scenario, the “coach” is often the keeper of some master stratefgy or tactic that is then brilliantly executed by the members of the team.  The players become more like chess pieces that are employed and applied according to the whims and wishes of the coach/chess player.

However, that is not the kind of coaching that succeeds in business.  In business, coaching is best applied by developing the skills, awareness, and strengths of the team uniquely and separately from the coach.  The focus is on asking the person to be coached the following:

  1. Empowering questions that help direct the person to their own insights, creative solutions, and perspectives on how to address a situation.  At times, that may mean that the solution reached is far different than the one that the coach would have employed (so it means giving up a sense of control over the inputs, methods, and weighting of factors for the coach).
  2. Providing opportunities for exploration so that the person being coached is able to experience the full weight of the assignment and recognize their own (and the team, unit, division, or total business) strengths and opportunities.
  3. Having the person being coached assume responsibility and control for the outcomes.  Unlike other approaches described above, coaching requires extending the trust that the subordinate will correctly achieve the results sought (even if the methods employed are not the ones that would have been chosen by the executive).

An executive has as many approaches to choose from as a golfer has clubs.

The above are not meant to be a hierarchy of approaches with coaching being the best and doing the worst.  Rather, it is presented to provide a context for understanding the various tools available to the executive to use selectively given the circumstances, skills, and readiness of the organization to employ each at the appropriate time.  Just like a golfer has multiple clubs in their bag to choose from depending on the situation, so too does an executive have more than one approach to achieve results.  Choosing the right one and correctly swinging it will serve the executive and the business far more beneficially than constantly relying on a driver when a putter would be more appropriate.

Knowing when to use each method or approach, and being skilled in how to best apply that approach is far more important to the evaluation of an executive’s influence and skill than their technical competence or previous abilities.  The role of the executive is different than that of the subordinate and should be evaluated on the basis of what expectations the organization has for that role, and not of the subordinates’ roles.

Categories: General

Netflix’s Not so Near Miss

Sunday, July 17, 2011 by:David Zahn
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Approximately a week ago, many subscribers to the video delivery giant, Netflix received an email notice that their pricing was to increase substantially.  It comes as no surprise that when told that pricing was to rise by as much as 60% depending on the plan the subscriber was on; that there was a very strong negative reaction.  The action of asking for and successfully implementing a price increase is never easy for a supplier in any industry.  However, this price increase seemed to agitate many customers at a very acute level on a number of levels:

  1. There was no announced increase in the Netflix expenses to warrant the increase (or if there was one, it was not explained to the customer).  The prior pricing was not based on a different series of costs  and expenses that had risen – in fact, due to the use of streaming video, the expenses may actually have gone down.
  2. The timing of the announcement came on the heels of a recent pricing initiative that had just been initiated and was being absorbed by the customer.  It left customers to wonder if they were being taken advantage of and were being tested to see just where the tolerance point was for them.
  3. The perception that the customer’s wants and needs were secondary to the operational needs of the company.
Customers to Netflix – Hello, do you hear us?

Basic Sales

One of the fundamentals of any sales effort is to understand the needs of customers and focus on providing solutions through some combination of products and services.  Netflix correctly re-invented the video rental business by recognizing that the corner video store was not able to supply the same breadth and depth that a central distribution service like Netflix could.  The convenience of sending DVDs back and forth from home added to the positive feeling customers had towards the company.
However, that goodwill is not limitless.  There is  a point where the value received is no longer worth the price demanded.  Remaining close to the customer to understand when and where that line is (and when it is about to be crossed) is of paramount importance. 
It is alleged that Netflix has calculated the likelihood of defections into a calculus of what it will cost in lost sales versus what they stand to gain in increased fees.  Unfortunately, the bad press they have invited by fumbling their finesse around the price increase will not be as easily measured by an Excel spreadsheet.  Their very leveraging of the business model of the internet as a delivery mechanism may also be what ultimately increases their difficulties.
Sales is a Person-to-Person Interaction
Even if the sale occurs with an internet-based company, the customer still expects to deal with a person who they can interact with, speak with, or at least email with and get immediate responses.  Dealing with the nameless, faceless entity that resembles the way Dorothy felt in front of the Wizard of Oz is undoubtedly going to be rejected by most customers.  There has to be some connection with, advocating for, and willingness to interact or engage with customers for the customer to feel a company is worth providing their loyalty.
Worse, the internet, social media, and the PR hit being taken by the company has wounded it tremendously.  The company’s own site, Facebook, and other sites have been maxed out with complaints about the cost increase, but also with the perceived arrogance of the company in trying to shove this price increase down customer’s throats without discussion, offering to maintain pricing if the customer commits to a long-term agreement or pre-payment, etc.
Power-holder
With the speed with which customer needs change, new businesses crop up, existing competition retools, and expectations evolve; for a company to think that they can demand a price change and have a customer remain loyal without having properly explained how the customer stands to gain from the higher price (is there more service – No, is there better product – No, is there a lack of options available to the customer to meet entertainment needs through video access - No), is foolhardy.
Netflix may ultimately reverse or reduce their price increase plans; but for now – they agitated customers and have led to defections en masse.  Whether they can recover remains to be seen.
Categories: General
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