If there’s ever been a question of the power of the consumer in today’s market, look no further than what’s been going on with Netflix over the past few months.
For those of you not familiar with Netflix, the service became synonymous with DVD rentals by mail, offering a popular alternative which reinvented the entertainment and rental industry. After essentially bankrupting its largest competitor in Blockbuster, Netflix enjoyed a sizable advantage over any of the nearest competitors.
Netflix internet streaming offerings now appear on many “smart” televisions, gaming systems and other television accessories as a complement to their DVD service. Before the change, Netflix bundled both the DVD and internet streaming services together in unified pricing packages as low as $9.99 per month for the best of both worlds. As a result, subscribers continued to increase and Netflix became a competitive alternative to traditional cable and television providers.
In July, Netflix announced an overhaul of their pricing structure, raising prices for the joint DVD and streaming package 60 percent to $15.98. Not only did angry customers use their voice across comments and social spaces, but investors reacted as well. This has resulted in a large number of user cancellations, as well as decreased third-quarter forecast and shares of Netflix going down 40% since the July announcement.
Obviously, the voices of angry customers have been heard loud and clear.
So clear in fact, that Netflix CEO, Reed Hastings, released a stunning announcement that divided Netflix DVD rental and streaming business into two separate companies. The DVD branch of the business will now be known as Qwikster, while streaming lives on under the Netflix brand. In his blog, Hastings cites how “companies rarely die from moving too fast, and they frequently die from moving too slowly.”
As entrepreneurs, what specific lesson can we take from such a dramatic story?
The voice of your customer matters more than ever. As a small business, situations like what Netflix just experienced on a large scale can literally be crushing to an entrepreneur.
In fact, with partner-based marketing becoming the predominant source of traffic in online business today, maintaining brand integrity is vital. Many business owners have made the bad decision of avoiding social interaction with their audience, either on their own websites or on social networks, out of concern for dealing with objections or complaints.
The opposite is actually true in most cases: managing your brand reputation and customer service in a public forum can actually be beneficial for your long-term success.
By giving both current and future customers a glimpse of your responsiveness, you are providing a road map for future interactions. Creating transparency in business interactions is not only becoming normal, increasingly savvy audiences are demanding it more and more. As the world grows more “on-demand,” your audience will expect both content and customer service to be delivered how, where and when they want.
Although it’s on a large scale, Netflix has painted a glowing example of what NOT to do in this situation. The voice of the customer MUST be heard and understood regardless of your size, delivery method or strategy. There simply is no alternative.
Who wears the customer service hat in your business? It’s an important question because every company, whether big or small, needs a solid customer service plan.
A small business can grow big based on great customer service. Don’t believe me? Then let me prove it to you. Let’s look at the differences in small business versus big business customer service.
The big guys.
There are serious problems often associated with the larger companies and customer service. Call a big business with a complaint and you’ll rarely get a satisfactory resolution. In fact, you might hang up before you even reach a human because of all the hoops you have to jump through in their automated system. You often experience frustration and figure it’s not worth your time and effort and hang up.
Customers lose interest in a company fast if they don’t get their problems or complaints taken care of efficiently. A small business owner can offer personalized complaint resolution in a timely manner.
The fine print.
Larger companies usually have policies in place to protect the company – the fine print you didn’t read when you made your purchase.
The small business owner tends to offer 100% money back guarantees, standing by the product or service, and more often than not, delivers above and beyond your expectations to ensure your satisfaction and build customer loyalty.
Do unto others.
There will be times when you might lose a customer based on his or her dissatisfaction, but don’t let it cause you to harm your reputation with knee jerk, defensive reactions. Always be polite because even though you didn’t meet their needs, they could recommend someone to you in the future whose needs you will meet.
Customer service is meant to support your customer when they have questions or problems. When you address them as a person (not a case number) they’re more likely to come back and do business with you again. And that’s the point! It’s much more cost efficient to keep a customer than to gain a new one – everytime.
Here’s where the small business owner has the advantage. Their business focus is on their customers and getting them to return time and again. Larger companies have the luxury of seeing an influx of new customers every day, so they’re sometimes not as concerned with keeping the existing ones happy.
Take advantage of your small business status and GO BIG on customer service — or it could be the one thing holding you back from achieving the kind of growth in your company that you want.
All that being said, I have one final note to add. You can do everything to please a disgruntled customer and still have them spread bad news about you. It’s unfortunate, but true. The bigger your small business becomes, the more likely you are to run into this. Try not to take it personally. You simply will never be able to please all of the people all of the time.
How do you handle customer service for your business? How far would you go to make things right for an unhappy customer? Do you think the customer is ALWAYS right?