Posts Tagged ‘Online Streaming’

Netflix Brand Triage: Qwikster Enough?

If it ain’t broke don’t fix it. Well they have, several times, and now we are witnessing how quickly and publicly you can damage a brand and how hard, and embarrassing, it can be to repair it.

For years, consumers and business pundits alike have singled out Netflix for being innovative, popular and customer-focused. Their attention shifted inward and they rapidly became the poster child for business school case studies on how to both piss off a rabidly loyal customer base and to taint your brand.

In less than three months there have been over a million customer defections and the stock price has lost almost two thirds of its value. All of this has been self-inflicted.

For those of you who do not know: This all started with a 60% price increase this summer. Netflix said it needed to have separate prices for DVD’s by mail and online streaming. The current business model did not make “great financial sense” for them. Customers exited.

This early adopter of Netflix was undeterred by the price increase itself, but I found the “explanation” to be confounding, both personally and professionally. This was the crack revealing that Netflix had lost its customer-centric culture.

That crack grew into a fissure on September 18 as Netflix CEO, Reed Hastings, emailed an “apology” to its subscribers on how the price increase was handled. However, to make matters much worse, he went on to announce the company’s intention to spin off its DVD business into a new entity.

The plan called for Netflix to be the moniker for streaming and Qwikster would be the new brand name for DVD’s by mail. Qwikster? Really? Doesn’t Qwikster sound more like a convenience store, a kitchen mop or a start up company? This was all about them again. Furious customers left in droves.

I thought this was a dangerous strategy with a terrible name to boot. There would be two brand names, two websites, two logins, two credit card bills and two movie queues to manage.

Just this morning, I received a rather tepid and unapologetic email from “The Netflix Team” saying, in part: “This means no change: one website, one account, one password…in other words, no Qwikster.”

Shame on me for not posting sooner. Good for Netflix for pulling the plug on the whole Qwikster idea. Deconstructing their two services, increasing prices and moving to create two entities has been bad for the brand, bad for customers and bad for business.

This is no simple marketing gaffe unfolding in private corporate corridors with a few heads rolling and an agency loosing an account. (BTW: Doesn’t the word “agency” sound quaint?) This drama is playing on screens of all sizes around the world.

Today’s low-key email announcement to delete Qwikster from the queue is necessary but insufficient. Inexplicably, it did not come from their now beleaguered CEO, Reed Hastings. Nor did it offer customers much in the way of reward, respect and recognition for sticking with them.

Netflix needs to do just that if it hopes to retain customers, avoid more comparisons to New Coke and to side step induction into the Bad Branding Hall of Shame.

After all, all hope is not lost when you have a brand name that gets used as a verb. Make a gesture to your customers today so tomorrow they will still be asking people this: “Hey, do you Netflix?”