Why Did NetFlix & Facebook Forget the Customer?
I’m not even a NetFlix customer and I’m baffled by what’s going on. I read the the press, the blogs, the Tweets and talk to loyal subscribers. I hear the rage. As an outsider, the most interesting thing has been this excerpt from a letter by the NetFlix CEO which telegraphs what’s really going on:
So we realized that streaming and DVD by mail are really becoming two different businesses, with very different cost structures, that need to be marketed differently, and we need to let each grow and operate independently.
Say what? You’re changing because your two lines of business have different cost structures? I’m betting that this is code for some boardroom compromise and/or pressure from investors to align its capital structure in a new way. The problem is that none of NetFlix’s changes are coming as a result of customer demand. And that explains the outrage.
And Facebook has done it too. Yet again it has insulted its customers by making a surprise and radical adjustment to the most important feature the company offers, the Newsfeed, which now works differently and has a new name. Forgive me, but I don’t recall it being broken nor any customer outcry to fix it.
How is it that it’s so easy to forget that your business should to be driven by demands of your customers, not your finance department, marketing department or even your own ego?
Thank goodness there was something positive this week. Pandora.com got it right. An upgrade that really is an upgrade. What a week!
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