When you telegraph a major change, it gives you enough time to think about what you are doing before you actually do it. It also gives people who will be impacted by the change a chance to begin to accept the impending action.

Netflix Corporate fails to telegraph changes; mistake ambushes customersSuch was not the case for Netflix. Ambushing its customers with a price increase and a major service change (the division of service offerings and introduction of “Qwikster”) last month turned out to be a Little Brain move with major consequences.

Price increases and a shift in service are not generally accepted with open arms anyway, but when done with little notice (ambushing) you might as well be saying, “We don’t care about you. We are going to do it our way and it does not matter what you think.” Not the best message for maintaining customer loyalty.

The customer backlash from the Netflix announcement and price increase resulted in a fast reversal of the former, in an attempt to make up for the poorly executed, corporate faux pas. As of Monday – barely a month into its creation – Qwikster is gone.

In business, if you are going to change the way you serve your customers, don’t ambush them with flip-flopping decisions.  Each directional change creates lost loyalty and ultimately lost value.  Losing a million customers in a single month is the legacy of allowing the Little Brain to overreact.

“Qwikster”? This one will be discussed in business schools classes for quite some time.

In your business, even when the pressure is on, take the time to tap into your Big Brain for thoughtful decisions lest your Little Brain will happily react with the wrong one.

© 2011 Kevin T. McCarney. All rights reserved.

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Telegraphing

(for more on this topic, see page 120 in the book)

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One Response to Little Brain Arrives at Netflix

  1. Kaye Winter says:

    I have to say, I dumped Netflix shortly after the first announcement. The lack of constancy was a real turn off.

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