In 2011 Netflix cofounder Reed Hastings announced, they would hive off DVD mail order into a separate business & would charge $7.99 a month each for streaming & mail order.
This effort to hike prices led to fury among subscribers & also showed that a large section of people still wanted the option to receive physical DVD’s through the mail, as part of the Netflix service.
Some 800,000 angry customers cancelled the service, with calls for Hastings to resign. Putting Netflix into a potential death spiral.
The following month Hasting reversed his decision, admitting he’d messed up & announced, the mail order service would remain part of Netflix & not be charged extra.
Hastings though still maintained the long-term vision to invest more in the streaming business. But also took along with him their DVD mail order customers too, who naturally migrated over time.
No matter the direction you take, it’s important you don’t alienate large sections of your existing customers, as Netflix nearly did.
If you plan to disrupt your market & change the way you deliver service. There are ways you can bring most of your customers with you, including those who are not quite ready to change.
A few years back we introduced monthly subscription managed print services, which include the printer technology, supplies & maintenance. Aiming to provide cost certainty & peace of mind.
We were conscious not all customers wanted this service. After consultation, we provided a cartridge only monthly subscription & a buy 1 get 1 half price cartridge only purchase scheme.
This approach kept all customers happy & overtime, most customers naturally migrated to the managed print subscription service, as the cost certainty & peace of mind benefits became clear.
We’ve decided (for the foreseeable future at least) to keep all these services on the table. As a collective, they attract more new customers, who will naturally migrate over time too.
Remember Netflix’s story. If you decide to change & disrupt your market, compromise a little & find a way to include all your customers, letting them migrate overtime once value is recognised.
