Netflix receives the corporate bronze medal in backpedalling!

I got a ‘Dear John’ letter from Netflix today.  Most people would find that annoying, but my name is John so I get them all the time!

Dear John,
It is clear that for many of our members two websites would make things more difficult, so we are going to keep Netflix as one place to go for streaming and DVDs.
This means no change: one website, one account, one password…in other words, no Qwikster.
While the July price change was necessary, we are now done with price changes.
We’re constantly improving our streaming selection. We’ve recently added hundreds of movies from Paramount, Sony, Universal, Fox, Warner Bros., Lionsgate, MGM and Miramax. Plus, in the last couple of weeks alone, we’ve added over 3,500 TV episodes from ABC, NBC, FOX, CBS, USA, E!, Nickelodeon, Disney Channel, ABC Family, Discovery Channel, TLC, SyFy, A&E, History, and PBS.
We value you as a member, and we are committed to making Netflix the best place to get your movies & TV shows.
Respectfully,
The Netflix Team

Netflix realized after making a colossal mistake of fragmenting their normally beloved user experience for the sake of potential spin-off later, that the hearts and minds of their customers were worth keeping.  If you look at the note though, it is a form of Dear John letter.  There is no remorse, not apology, and it exudes annoyance that these targets of economic rent extraction activity (their customers) would dare question their strategy.  “We’ve listened, we’ll stop b

ut we are not changing the prices, so there, pffffttt.”  This has been the year of User Experience snafus. Netflix and HP, between the two of them, have generated enough material to keep Harvard Business School case writers busy for years!

What’s the lesson here?  Listen to your customers (but not too closely according to Clayton Christensen) and treat them with respect or at least amusement.  If Steve Jobs was able to address customer concerns directly, occasionally apologize, and even shift corporate strategy in the face of blinding growth compared to the competition, what makes any other company feel they can successfully ignore what the market? By market I mean the people actually providing the capital to run the enterprise, not the market where fortunes are made on innuendo and rumor.  We would not have a vibrant iPhone App market if Apple had not listent to the demands of its developer network to open the gates to the garden for all to enjoy.  When new iPhone users found out they paid full price for a phone that dropped in price 24 hours later, Apple listened to demands, apologized, and gave customers store credit to recognize their loyalty (and wounds) as early adopters.

It comes back to what we all learned in Kindergarten, listen to others, respect each other, say you’re sorry, and if you cannot get it right, spend some time in the Naughty Spot.  We will see if the market continues to make Netflix stand in the Naughty Spot.  This letter is just the latest move that extends the duration of their time out.