By Glen Gardner
CEO GG&A
Many companies seem to lose their way when they stray from their core business and forget about the basics of marketing. This played out in a big way with Netflix over the past few days.
Just a few months ago the company was the darling of the business media. The company’s stock price was soaring and the company president was named Business Person of the Year by Fortune magazine. His picture probably won’t be there this year. The company announced this week they lost 800,000 subscribers over the first three quarters of the year.
So what happened? According to Yahoo Business, “Subscribers revolted and many dropped the service. The plan to split the DVD service from the on-line service tarnished a once widely respected Internet service that had already been wounded by an unpopular price increase in the summer. Mr. Hastings (company president) was forced to reverse the planned split — but not the price increase — three weeks later and apologized.”
But the damage was already done and people were flocking to the exit. As shocking as it may seem, they simply forgot to ask their customers what they thought. They further blundered by not communicating the possible benefits of the huge price increase and elimination of levels of service that their customer base truly liked.
When businesses stop listening to their customers bad things happen. When businesses stop talking to their customers even worse things happen. When they do both, 800,000 people vote with their feet.
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