Product Disintegration: Netflix and Qwikster Miss The Trick

Just when you thought they couldn't get any more stupid...

NFLX stock plummeted after the announcement in July that Netflix would separate streaming and DVD into two separate plans, effectively charging customers more for their existing subscriptions. Once at almost $305/share, by close on Friday, NFLX was worth about half of that -- a mere $155.19. As of this writing, it's dropped further to hover around $143, and in light of last night's events, it doesn't take a Wall Street broker to predict that for Netflix, it's only downhill from here.

NFLX stock prices from mid-June to today, Sept 19 2011

Last night, around 9 pm, CEO Reed Hastings sent out an email and posted a blog apologizing to customers for his arrogance and lack of communication... but not for the actions that are estimated to lose them 1 million users by the end of the year. Instead, he laid out plans to rebrand the DVD-only plan under the name Qwikster. This means a new website, a new movie queue, and a separate credit card charge. In other words, it means pissing people off.

Mr. Hastings, I'm glad to see you're eating that humble pie, but next time try a side of common sense. In a market where companies are increasingly striving for more product integration (Facebook connect, "sign in with Twitter," universal Google accounts), what would inspire you to break up a well-recognized brand? Netflix is now going to ask customers to log into two separate websites, keep two separate queues, and potentially lose hundreds or thousands of the movie ratings that dictate recommendations. Not to mention the choice of name, which recalls the late-90's trend of the ubiquitous suffix "-ster," at the same time evoking images of the corner liquor store with the prefix "qwik." And never mind that they didn't have the foresight to check into potential branding problems, like the Twitter handle @Qwikster, whose tweets are full of profanity and revolve around getting high.

Streaming is the future of Netflix. I don't think anybody with half a brain is arguing that. Companies need to focus on digital delivery of content, or they'll go the way of bookstores like Borders. Hastings explained that streaming and DVD delivery are “quite different businesses with very different cost structures, different benefits that need to be marketed differently, and we need to let each grow and operate independently.” But he's going about it in entirely the wrong way. Netflix streaming is not a complete service by itself. It's currently a supplement. You can't get most new releases via streaming, and browsing the options you do have is laborious. As a consumer, if you're going to charge me more for streaming movies, I want to know that you're planning on improving both the selection and the interface. Until you do make those improvements, I need the DVD service... and I shouldn't have to pay extra for it. Now, with the announcement that these will now be completely different services, Netflix has again jumped the gun. You need to create a complete service before you can market it independently.

Almost a year ago, I posted about when a brand should backpedal, arguing that many companies make an about-face too quickly due to the instant feedback the internet provides. Here is a notable exception. This is not something as simple as a logo change, which is more a matter of taste and does not effect product functionality. This is not something to which customers will become accustomed. This is a change which damages brand recognition, damages trust, and damages user experience. Now is the time to backpedal, and fast.

To See, or Say You Saw? - Musings on Museum Behavior

I love art. I love museums. But I do not love your average museum-goer.

Yesterday, my sister published a piece on museum admission prices, the very day that I took in the Picasso exhibit at the De Young, where general admission is $25 a head. While the exhibit itself was stimulating (though I have a few bones to pick with the curator), the gallery crowd got on my nerves, and not just because of its size.

It's always a problem, with a big-name artist: lots of people go just to say they went. With Picasso, this issue seemed to be magnified to the nth degree, because his work can be so difficult to absorb. I first noticed it as I stood for a good 5 minutes in front of "Musicien assis" (which translates as "seated musician"), pictured right. As I let the sketch soak in, I became aware that everyone around me was giving it a cursory glance and moving on.

When I experience art, it is the pieces that are hard to wrap my mind around that I enjoy most. But as I moved through the galleries, paying more attention to the behavior of the other visitors, I was reminded that this is the opposite attitude to most museum patrons. They come to see the famous pieces--the ones they recognize. They'll look at "problematic" pieces, as long as they recognize them. They'll look at pieces they don't recognize, as long as they're not difficult to take in. But if it's not famous, and it's not obvious, it's not worth looking at.

My friend Kay, my mother, and my better half were with me. When I shared my thoughts, my partner chimed in that he had heard several people commenting on the lovely picture frames. Picture frames? There are 6 rooms of Picassos around you, and you're looking at the picture frames? Kay then told me about a trip to a museum in Barcelona, where she observed visitors pausing in front of the art only as long as it took to take a photo. This kind of stuff boggles my mind. Nobody wants to see your amateur pictures of art, when there are hundreds of websites selling quality prints online.

Maybe my memory's faulty, but I think these visitors were more the exception than the norm when I was growing up. But increasingly (and I think social networking websites are partly to blame for this), people are doing things more for the documentation than for the experience. So next time you're thinking of going to a museum just to say you went, do me a favor. Save yourself the $25, and go only as far as the gift shop. From there, you can check in on FourSquare and Facebook, buy yourself a couple of postcards, and you've as good as gone.

Customer Service Nightmare: Clipper Card

Over the last few years, paying for public transportation in the Bay Area has become easier and simpler -- or so some would have you believe. We went from cash fares on buses and paper tickets on BART to auto-loading (but separate) cards that scan upon entry, to the unified Clipper Card, which can be used on AC Transit buses, BART, and SF Muni buses and trains. For regular riders like me, this was a dream come true... until it became clear that Clipper's customer service can't keep up.

I've had a Clipper since they first became available last summer, and I had no trouble registering my card online, or adding my credit card for auto-load. I loved the set-it-and-forget-it model of paying for transportation, especially since it made it easy to use my pre-tax commute dollars via eFlex debit card. Unfortunately, as it turns out, the smallest hiccup with Clipper can quickly turn into a nightmare.

In July, I received an email alert from Clipper telling me that my credit card had been declined, and I should sign into the website to input a new method of payment. While my eFlex card read as active on my end, I logged in to change to my regular credit card while I looked into the matter. On the account overview page, I saw my Clipper card reading as active (see right). However, as I attempted to navigate the site, I kept seeing "no cards found" under the options to add value, set up auto-load, etc.

So I emailed customer service. I got a quick response, but obviously a form letter (the font for my name was different from the body of the email, which was different still from the signature), and rife with typos:

Thank you for contacting the Clipper Customer Service Center. We are experiencing issue with our website, you only option is to download the Edit Auto load from ands fax or email to our office.
If you have any questions or concerns, please contact the Clipper Card Customer Service Center at 1-877-878-8883 (TDD/TTY 711 or 1-800-735-2929).

I filled out the required form and emailed it back, along with a proofread version of the form letter for their future use. (I used to be a freelance writer and proofreader... Old habits die hard.) I requested that they let me know if my new payment form had been accepted, as I was eager to stop paying for all of my travels in cash. I was informed that it could take up to 72 hours, but when my Clipper worked the next morning, I thought I was golden.

Oh no. A few days later, I get an email telling me my credit card was declined "again." I replied asking for clarification, since they had acknowledged receipt of the auto-load change form, and my Clipper was working fine. No answer. I (mistakenly) assume that mean it's their bad, and go on about my merry way.

Fast forward to August. I'm headed to work, and my Clipper gets declined at the BART turnstile. This sometimes happens. I try another turnstile. No joy. Annoyed to be missing my train, I go to the attendant's booth, she scans my Clipper, and says it's returned as "bad debt." Now I'm annoyed and humiliated. I buy a paper ticket, hoof it to work, and send off an angry email to the culprits. I'm asked for the serial number on my card (even though my message was in response to a previous email thread). I oblige. Radio silence.

I wait a week. No response. I write again, being careful to include my card's serial number. 10 more days pass. Yesterday, I called up Clipper's customer service number, to be told that they cannot change my payment information, and I have to do so on the website. Rather than take out my anger on an innocent call center worker, I go back to clippercard.com, and even though on many pages it still reads "no cards available," I manage to find a hidden link on one of these pages to change my billing info. I put in my eFlex debit card number (which by this time I have double-checked is active and has funds). All bets are off as to what happens next.

One good thing has come out of this mess, and that is that, working in a user-facing position as Community Manager at a web 2.0 site, I can look for lessons in customer service. I used to answer every single email that came into the site personally. Luckily, we now have a Chief Moderator and several part-time mods who answer most of the general questions, but I still deal with a lot of troubleshooting and disgruntled users on a daily basis. We strive to respond to all emails within 2 business days, but we still get complaints from users who expect 24/7 coverage of the team inbox. Based on my experience with Clipper, I'd say we're doing a-okay there. And while I understand the temptation to procrastinate in answering the more difficult emails, this experience with Clipper has renewed my conviction that these are the messages that should take priority. As always, if you don't know the answer to something, find someone who does. In the meantime, check in with your customer/user to let them know you're looking into the problem. In customer service, a little communication goes a long way. And that, I think, is the moral of this story.

A moral's very well and good, of course, but it won't help me get on the train tomorrow.