Readers of Gabor’s new book Slingshot: Re-Imagine Your Business, Re-Imagine Your Life know that any company must understand the risk of upsetting its permanently infatuated consumers when looking to alter its offering. Certain offerings grab customers just the right way at the right time and help to keep them continuously infatuated. The interesting thing with such lasting infatuations is that consumers actually become very territorial about the offering and feel entitled to the permanence of their infatuation. Hence they demand that the offering stay unchanged.
Netflix learned this lesson the hard way recently. Take note of their misstep, via the New York Times:
Reed Hastings was soaking in a hot tub with a friend last month when he shared a secret: his company, Netflix, was about to announce a plan to divide its movie rental service into two — one offering streaming movies over the Internet, the other offering old-fashioned DVDs in the mail.
“That is awful,” the friend, who was also a Netflix subscriber, told him under a starry sky in the Bay Area, according to Mr. Hastings. “I don’t want to deal with two accounts.”
Mr. Hastings ignored the warning, believing that chief executives should generally discount what their friends say.
He has since regretted it. Subscribers revolted and many dropped the service. The plan further tarnished a once widely respected Internet service that had already been wounded by an unpopular price increase in the summer. Mr. Hastings was forced to reverse the planned split — but not the price increase — three weeks later and apologized.
[Image via Flickr.]
