Posted by Marie on November 15, 2011
Previously…
1. Price Hikes Are Tricky.
2. Easy Business Is Good Business.
3. Avoid breaking up with your fans.
The marketing experts out there will tell you how benficial it is to have fans. They’ll give you all sorts of ways to turn your customers into advocates for your business.
I completely believe in his endeavor and it is one of the most effective things a small business can do to keep running. The experts, however, will rarely mention the flip side of the company-fan relationship: the messy break up.
Netflix managed to build a very loyal membership of fans. These fans touted the service to their friends and family. They stuck by little indie Netflix through the big challenges of Wal-Mart, Amazon, Blockbuster, and more.
When a long-term fan relationship goes south, it is going to act more like a break-up than just a lost business customer.
The anger and passionate outrage expressed by Neflix users seemed to be heightened by a sense of personal betrayal. The response went over and beyond what a regular price increase or policy change should usually incite.
Postage stamps are about to go up again, and just how many of those slips of tiny print do we get from our credit card companies? Yes, people get mad, but we just don’t see the same levels of reaction in those cases.
Loyalty and personal investment make the difference. Customers who are fans can maintain and propel you. An angry ex can affect your operations and reputation for years to come.
Posted by Marie on November 9, 2011
Previously… 1. Price Hikes Are Tricky
2. Easy Business is good business.
A few weeks ago, Netflix announced the end of Qwikster. Qwikster was going to be the original mail-to-home arm of a split interface.
Yep, in an age when the trend is to get everyone to do everything with one thing, Netflix wanted to make its members keep two want lists, one for streaming videos and one for getting the DVD discs mailed to their homes. These two lists would be managed through two log ins, processed with two credit card transactions, serviced by two member review sections, and all the rest.
Understandably, the people were exasperated. Instead of becoming more convenient, Netflix wanted to become more cumbersome. Users would have to spend more effort to get the exact same result from the company.
The lesson here is that when people wanted to do business with you, make it easy for them to do so. There are times when innovation is great and desirable. For small businesses though, a reinvention of the wheel is not always the best option. We can use existing expectations to overcome a lack of resources.
For example, websites are expected to have a certain layout. Your About is in one of two places. Your Contact in one of three places. When these elements are not where they are “supposed” to be, your customer has to work harder to do business with you.
From our standpoint, payment is one of the most important aspects on which to have clarity. Have your payment options be obvious on every invoice. Make Pay and Buy noticeable on your websites. Allow for flexibility and promote usability on every transaction.
You’ve worked hard to get people to your operations. Now make dealing with you as painless and effortless as possible. The less thought the customers have to put into the process, the less time they have to consider the alternatives out there. Everyone likes easy.
Next: Lesson 3. Avoid breaking up with your fans.
Posted by Marie on October 9, 2011
This post is a bit late to the party, but Netflix’s woes of the last few months reflect at least three mistakes that businesses, especially small ones, should keep in mind.
1. Price hikes are tricky.
Back in July, Netflix announced an across-the-board price increase for all members. The negative talk began immediately. Instead of addressing people’s concerns directly, Netflix, as far as I know, stayed silent and just waited for the September price increase date to roll around.
In that time, would-be subscribers decided not to join and long-time members canceled their service. Enough people acted that Netflix had to issue a notice saying the company would not be meeting its projected financial figures.
It doesn’t matter that the reasons for the rate increase are easily understandable and pretty obvious. The raising of prices automatically comes with negative feelings. (Think about the postage stamp increases of a couple cents at a time.) The best thing for a business to do is to avoid them as much as possible.
This may mean setting a price right at the beginning that will account for these future rates. One can always use discounts, sales, and promotions to be more in line with current market demands.
If a price increase is necessary, and may you be in business long enough for this to become your dilemma, it helps to think of the move as a campaign and not as a solitary action. Changing a price is as easy as hitting a few buttons these days, but the company should think about how it wants to communicate this change.
Should it be positioned as “Gee, we hate to do this to you, but our costs are up and in order to continuing doing what we do, we really really really have to do this”? Or can the price increase be delivered along with increased value? Has the product been upgraded and is therefore better? Are there more services bundled in with the originals?
Even if the price increase’s true reason is the first one, see if you are not able to achieve the second. Brainstorm how you can justify the additional cost to your customers by making them know that they are also getting a better deal.
In my opinion, this is where Netflix really failed on their subscription increase announcement. They want to push everyone over to streaming, where there are lower overhead and potentially higher profit margins, but they didn’t simultaneously announce better streaming services. They didn’t announce that a lot more and newer titles will soon be available. They didn’t announce better speeds and more reliable connections. In fact, with a few of their contracts falling through, the perceived amount of in-demand titles available on the streaming side is actually going down.
So their customers heard: We’re raising prices. You’re getting less.
Yep, the people were not happy.
Stay tuned for Lessons 2 (Easy Business is good business.) and 3 (Avoid breaking up with your fans.)…
Posted by Marie on September 15, 2011
As of today, Detour Services has been in business for three whole years! To commemorate this success and my own personal growth, I am taking on the title of Small Business Specialist and adding, on an official level, small business consulting to Detour’s offerings.
When I come on board, it is rare that the scope of my work remains only on the initial project. Usually, I become a sounding board and a discussion partner.
Running a small business can be an isolating endeavor. Oh, sure, the resources are out there, but the time to access them may not be. Trustworthy peers can also be hard to find.
In these instances, someone like me, a fellow small business owner and someone with experience in a wide variety of fields and tasks, can be so valuable. Why not give me a call to see what I can offer?
Posted by Marie on September 12, 2011
Being the boss may be great, but… Bosses miss things.
Make sure your staff is not afraid to point out mistakes and offer solutions. Every boss will do better with back-up and another working mind.
Capable assistance is an asset and the cultivation of this relationship is absolutely worth it. It may appear to be a waste of time and money to not simply do things your way, but over the long run, a team on your side will catch those huge problems before they occur.
