DVD and online distributor Netflix finds itself in the customer service doghouse over its aborted decision to spin off its DVD service into a company called, Qwikster. It’s an embarrassing public relations goof that reminds some of the time when Coca-Cola decided it would be a good idea to replace its beloved product with New Coke.
A lot of time goes into a company’s decision to launch a new product or service. I’m sure there were lots of projections and spreadsheets passed around the office. From a purely business perspective, it probably made sense for Netflix to put more of its energy into online distribution.
But a big obstacle was ignored: The customer’s reluctance to change from what was perceived as a good situation. Netflix couldn’t Clear the Path of this challenge.
Netflix became popular as a business that made your life easier. It was convenient to go to your mailbox for a movie rather than run to a video store. Easy is good for business.
Separating your business into two companies makes life harder for customers. To use them both, you would need to create two accounts and do more searching to see if a movie you wanted to see was available in your desired format. While some customers just like DVDs and others prefer streaming films, there is a segment that would use both because not all content is available on the online platform.
So life was going to get more complicated for these people. More of them left Netflix than expected and that produced the flip flop on the Qwikster company. The dreams of accountants were sabotaged by customer expectations.
Now Netflix, which had seemed to be a smart company, now seems unhip and old fashioned. This brand collapse is great news if you’re a competitor. Somewhere a beaten down Blockbuster storefront is smiling.
Business choices come with consequences. It might make financial sense to sell expresso or fresh fish in a flower store. But customers probably want their flowers to smell like flowers and not coffee or flounder.
Know why people use you. Honor that reason and don’t go outside their comfort zone.