How Market Research Could Have Saved Netflix From Losing Over 800,000 Customers

In a land where founders and CEO of large successful companies are the new celebrities, many of them are faced with pivotal decisions that will likely shape their legacy…or at least make an interesting chapter or two in their future autobiography.

As a longtime Netflix customer and die-hard Roku advocate, I  was shocked at Chief Executive Officer Reed Hasting’s  aggressive decision to split it’s DVD rental and video streaming business into two separate entities in addition to doubling it’s current rates. Many thought Quikster was a stupid name to describe their DVD rental division and in this economy many customers had a hard time justifying the additional cost that were forced on them.

According to a recent New York Times post, Hastings told a friend about his ideas a couple of month ago, and his friend warned him that it was a really bad idea but Hastings ignored the feedback. When asked if they conducted any market research or focus groups on the idea, he simply “assumed” it had been conducted. The average person can clearly see through his “assumptions” that the data  collected (if there were any data collected from his customer base) were skewed, and perhaps some over-confidence played a big role in this major mistake. Another possible mistake on Netflix’s part is that maybe their marketing department carried out market research projects that were biased to the pre-made decision to increase prices anyways. The result of not listening to their customers prior to making a decision caused the mass exodus followed by a severe beating on their brand in the media.

Before I continue,  we need to understand the  three main drivers that resulted in Netflix’s aggressive decisions:

1) Online streaming is a very competitive field. Amazon, Apple, Hulu, and all of the networks have joined in to grab a piece of that pie.

2) Expansion overseas. Netflix wants to be the first global online streaming company.

4) Redbox is kicking serious tail feathers in pay-per-day rentals and growing extremely fast in the US. These things are everywhere now!

After reviewing these reasons, you can almost justify Netflix’s decision to act as aggressively as they did, right? Well, kind of. Many large companies tend to think they have enough clout to influence their customers to stay on board with their goals. Unfortunately for large companies the average customer are not thinking about what is best of the company. Instead, they are thinking what’s going to make them happy right now at an effective price. If they are not happy with the service, they can take their money and go somewhere else. With movements like Occupy Wall Street happening all over the world and access to social media it’s evident that listening and taking into consideration the voice of your customers is more important than ever.

Now that the damage has been done, what can Netflix do? Here are a couple of recommendations that can possibly change their brand image around and start winning back some customers.

1) Conduct Voice of the Customer or customer feedback research in a non-biased environment. It’s important to get an even mix of current customers and former customers to find out what’s keeping customers so loyal while asking former customers what made them cancel.

2) Run Pricing Analysis projects and customer opinion on pricing features. If they would done some choice-based conjoint analysis projects in addition to some following up pricing questions, Netflix may have avoided losing 800,000 customers since June.

3) Set up an online panel of Netflix customers and ask them questions about new product or service ideas and their thoughts in real-time. Offer these panelists an incentive or a reason to give honest opinions that can help shape the future of the company.

4) Instead of focusing 100% on growth, focus on customer retention and increase satisfaction levels with the services Netflix provides. Everybody knows about the 80/20 rule. Based on some news outlets, Netflix is planning to slow down growth and only expand in the UK in the next year or so and scrapping their plans to expand into Asia until down the road.

5) Netflix needs to fix their brand image in the media quickly! I’ve seen new nicknames like “Quitflix,” “Cancelflix,” “Threatflix,” and “Buh-byeflix” floating around in the media. It is time to do some branding research and work on repositioning themselves back to the time where streaming Netflix was an enjoyable, convenient, and economical experience for all.

It’s going to be interesting to watch and see what Netflix will do next. Based on what’s happened here I think we can all agree a little bit of market research could have gone a long way for them.

Is it Still Research if it Doesn’t Look Like a Survey?

Brains really don’t like change.  Your brain thinks that if you change something a mastodon will suddenly come out of the bushes and eat you.  (Well aside from the fact that a mastodon couldn’t possibly be invisible or hide behind a bush — this isn’t going to happen) but the emotional equivalent of being in danger is still very real for humans — even millions of years later.

Granted, you could get jumped by members of the rock group “Mastodon” — (a group of scary looking dudes)  but I digress.

Are you stuck in thinking that research should look a certain way?

It’s funny how we get stuck in what something “should” look like rather than working with how things are.   The first step is to accept that your brain is committed to being efficient and your learning, doing and trying to figure out something new just isn’t very efficient.

Be committed but not attached to the outcome

The double-edged sword of all the new technologies is that they offer new possibilities for really getting to the core of what our customers want in new and exciting ways.  And, at the same time it conflicts  with having to figure out how to integrate these new tools and possibilities in ways that actually help us make good decisions, build customer engagement and loyalty.

The best way to do this is to be COMMITTED to getting the data that we need without being ATTACHED to the vehicles we use to make that happen.

Challenge yourself to stay focused on what you’re committed to in your research but stay open to the plethora of tools that will make that happen.

Play with your research as if it were a game.  Don’t make the process something significant — make it a journey.

Measuring Customer Engagement as a Predictor of Profitability

How are you currently measuring your marketing effectiveness?  If you’re like most people, you might measure your marketing effectiveness by looking at your sales and profit numbers.  And that isn’t wrong.  It’s also not the only way to measure the long-term success of your marketing program.

Steve Jobs and his biography have been the topic in the news this week and one of the conversations inside of these interviews has been his decision to keep Apple a closed platform.  There was a time when just looking at Apple’s sales and profits numbers would have made him wrong.  Yet, in the long term, his marketing strategy of having a closed platform allowed for a smooth, effortless and seamless connection across multiple devices.   Jobs took a stand and focused his efforts on building an engaged and loyal customer following.  Without his dedication to his customer evangelists, his strategy would have failed miserably.

This is a great example that while dollars are one way to measure success – there are other ways and this is where measuring feedback either in the form of a survey or crowd sourcing project will give you some of that additional marketing contexts within which you can measure the effectiveness of your marketing strategy.

You can measure customer engagement or loyalty as recommended by Gallup and Reicheld’s net promoter score.   Customer engagement and loyalty are infinitely more powerful predictors of profitability than what we’ve been used to. It’s easy to poo poo questions that measure a customer’s emotional attachment because they aren’t perceived as hard data.

But now that we know from all the extensive brain science research that every purchasing decision is, in fact, emotional — then shouldn’t we be measuring emotional attachment to our brand?

Customer engagement is also a wonderful tool for developing long-term brand strategies because it will show you where and how to differentiate your offer to your most profitable customers, inspire your target customers and connect in a way that builds relationships with them.

Here are the 11 Questions Outlined by the Gallup Customer Engagement Survey

  1. Overall, how satisfied are you with [Brand]?
  2. How likely are you to continue to choose/repurchase/repeat (if needed) [Brand]?
  3. How likely are you to recommend [Brand] to a friend/associate?
  4. [Brand] is a name I can always trust.
  5. [Brand] always delivers on what they promise.
  6. [Brand] always treats me fairly.
  7. If a problem arises, I can always count on [Brand] to reach a fair and satisfactory resolution.
  8. I feel proud to be a [Brand] [customer/shopper/user/owner].
  9. [Brand] always treats me with respect.
  10. [Brand] is the perfect [company/product/brand/store] for people like me.
  11. I can’t imagine a world without [Brand].

Ideas on How to Apply Customer Engagement to Your Feedback

There are obvious benefits to following the Gallup methods and licensing their process.  But if you don’t have the dollars for that, look at ways that you can apply the principles behind customer engagement to your own process.

One option is to create a basic matrix question using these 11 attributes.  It’s easy enough to insert into an existing survey or to simply run on its own.  For more detailed information on how to use customer engagement, you can read this article from Gallup that discusses the intricacies of measuring customer engagement.

What other ways are you measuring your marketing success?  Share your strategies in the comments below.

You Can No Longer Ignore Mobile Market Research

“Three apples changed the world: The one that seduced Adam and Eve, the one that fell on Newton’s head, and the one that is missing a bite.”

Someone just sent me this quote that’s apparently doing the rounds by email, tweets, and Facebook status updates. The truth is that it’s not just Apple’s innovative technology that freed us from the shackles of payphones, landlines, and eventually our desks, and gave us the impetus to move rapidly towards the 22nd century; it’s ALL mobile technology, as an aggregate whole, that dramatically changed our lives. Over 95% of the world’s population now owns mobile phones, and 90% of all those phones are internet ready. Add to that other mobile devices, such as tablets (already poised to dominate the world of personal computing), and you can see why people are now free to roam anywhere, without missing a beat. With this marvel of technology at the fingertip of most humans, new and improved possibilities are opening up for every business under the sun. This is particularly germane to the market research industry. How can it not be? Before businesses do what they do, the MR industry has to be there at the forefront, giving them the requisite guidance to navigate through the needs and wants of their current and potential customers. It behooves any business – that makes it its business to be in touch with its targeted audience – to look to mobile technologies as the next big thing in marketing and research.

This is not your father’s market research. Our generation has long graduated from the traditional market research methodologies that mostly revolved around personal interviews (like mall intercepts), mailed or written questionnaires, and telephone surveys. With 94% of market research firms offering online services, it is safe to say that we have effectively evolved from the mall to the internet. But stop and think about this for a second: If 94% percent of market research is being done online, this means that only 6% of it has gone mobile and is therefore ahead of emerging marketing and research trends. With the increased viability of mobile marketing and research, and so much potential up for grabs, why does the MR field still need coaxing and coaching to get on board with mobile technology?

MR (or any business, really) simply cannot afford to disregard mobile technology as a crucial ally in research and marketing. Here’s why:

1. It’s convenient: Mobile surveys can be answered from literally anywhere. Furthermore, due to the restrictions inherent in its physical size and limited capabilities, mobile marketing and research is short and succinct. Clicking yes or no, typing a short sentence, or reading a short tweet on a this little machine that resides in your pocket (purse or briefcase) is as simple as it gets. And simple wins, every time.

2. It’s easy: Survey fatigue is one of the most prevalent concerns in the world of marketing research. The minimal amount of effort that needs to be exerted to participate with a mobile phone that’s already on, in your hand, can convince even the most reluctant survey taker/reader to participate. Being more engaging and fun than traditional surveys pretty much guarantees improved participation rates. In short, easy does it.

3. It’s straightforward: The fact that it virtually eliminates the middle man and allows for the collection of in-the-moment data directly from the participant in his or her natural habitat (life and home), is one of the most valuable benefits of mobile market research. The advent of more video capturing and producing technologies will no doubt further that attribute, as well as supplement more qualitative information as an added bonus.

4. It gets around: As the use of mobile phones continues to rise and landline use notably declines, mobile technology will be the best – if not the only way – to reach participants. Reaching more of the population, particularly demographics typically not well-represented in the online sphere or other traditional methods, that tend to be accessible via mobile, is a significant benefit of mobile market research. Easy integration and dissemination of information is also greatly facilitated by the ease with which mobile technology allows participants to interface with their mobile devices.

5. It’s fast: Efficiency is key here. The instantaneous nature of a mobile exchange ensures that the wait period between the formulation of a strategy and it reaching its targeted audience is significantly shorter than before. The potential advantage of a faster turnaround time is getting a more immediate consumer reaction to an experience, which makes for a more genuine, in-the-moment, and truer reaction, in other words enhances the quality of the data by virtually eliminating degradation of memory and inaccurate recollection errors.

6. It’s personal: Mobiles are agile and “smart”. They allow for the collection of user generated content (UGC) such as videos and images immediately from the participants’ mobile devices as they go about their daily lives. They gather private user data directly from the device. They capture invaluable geolocation data. Enough said.

7. It’s accurate: Unmediated insight into people’s lives simply cannot be achieved via traditional research methods as it can with mobile technology. Since most of the information gathered is user-generated, an interesting side effect of the mobile research is that it actually lends itself to increased accuracy of the collected data. Getting small bits of data in a succession of interactions that incrementally generate better understanding of consumer reactions (establish a better profile), which in turn translates to better prediction of behaviors and tastes, is a commodity akin to gold in the marketing and research field.

So, the next time you have a business question or message, don’t ignore the untapped mobile market. Reach out to your current and potential customers via their electronic appendage… their cell/smart phones and their tablets. You can’t afford not to!

 

Stay Needed—Marketing Market Research

How do Honomichl top-50 companies attract their customers?

How do top marketing research companies market themselves?

In the age of free survey sites that let companies do their own traditional data gathering, the demands of specialization and of message cohesion have never been stronger.

Brand positioning is everything. When we change technology around the time we change our shoes, the question is not how well your research lines up with certain predetermined criteria of successful research but how your company defines that success, where your resources are focused, and why those dimensions are what make your market model the strongest. To put it bluntly, how do we justify our own value and stop that perception of ourselves as ‘middle men.’

Tom H.C. Anderson, founder and partner over at Anderson Analytics, is one of the many people pioneering what is called ‘text analytics’. One of the interesting things he’s said (and there are many) is that it seems more and more like specifying the domain of such analysis—this in contrast with the broader, large-data applications the techniques have been tending toward. Text analytics, a tool with some serious potential for revolutionizing (or at least proprietizing) market research, is important here precisely of its innovation. It cannot be done on a site like SurveyMonkey; it is, at least right now, disintermediation-proof. And that’s exactly what we need.

It should be no surprise, then, to see Anderson Analytics in a study by Leonard Murphy surveying the ten MR brands perceived to be the most innovative. There’s another lesson to be learned in this research, however. Anderson, a newer company, finds itself in the company of the likes of Nielsen, TNS, GfK, traditionally stellar firms with established methods. According to the study, Anderson’s text analysis methods might signal to consumers a commitment to values over and above baseline data-collection. It’s not just text analysis, but analysis itself, and the commitment to development of technological tools, that accounts for bridging the gap between traditional and risk-averse respondents.

But consider the other side, the customer. Consider what Jason Anderson over at Blizzard Inc. has to say in his 8 Things I Would Do if I Were a Market Researcher. His high-level advice concerns justifying our addition to his overhead (and, no, we need more than project management). He mentions bringing out really unique, interesting data streams, if that’s what we want to focus on, and especially something that takes account of the disparity between what those surveyed say and do. He mentions point-of-sale and multimodality as research he’s interested in hiring someone to bring to him. And yet he also mentions investments in technology, as well as technologists, people on staff to find new ways of understanding, modeling, and interpreting the initial customer’s world. These point to the same sort of things as Murphy’s survey, and yet, instead of a rousing acclaim of Anderson Analytics here, this Anderson reminds us about impact, about how the fanciest, most cutting-edge, laser-cool techniques mean nothing if they can’t get results. Specifically, he says that MR firms should market those results, working out the methods among themselves.

Where does this leave us? Promote someone to manage a new text analysis project? Not quite. The thing to take away is this—Stay Needed. It’s an old rule of business, but once freesourced sites make you obsolete (and yes, they will, even text analytics) there better be something waiting in the wings, something that works, something that’s yours, and something that’ll have companies drooling.

Instant wins with QuestionPro Action Alerts

I once had a boss who was fond of saying “in the future: instant wins”, meaning the faster you can act, the more customers you’ll win.  It’s easy to think of examples of this principle in action:  McDonalds, the ATM, FedEx, and Expedia all come to mind.  The web is ideally suited for “instant” strategies, from Amazon’s “one click purchasing” to the proliferation of Live Chat on retail sites, more and more companies are taking advantage of the web’s real time capabilities.

With QuestionPro’s “Action Alerts” it’s easy to instantly act on a customer’s responses to your survey questions.  Image being able to send an email within minutes of a customer selecting “Please have someone contact me” on a survey question.  Action Alerts can also be used to quickly address problems, for example, if a customer selects “Very Unsatisfied” to a product satisfaction question, you’ll be able to proactively contact this customer within minutes.

With QuestionPro’s easy to use rules, you can create custom Account Alerts tailored specifically to your needs.  To learn more about setting up Account Alerts, please see below:

http://questionpro.com/help/151.html

Autodidact – Are Self-Taught Marketers Better Marketers?

In the world of market research it’s extremely easy to get academic about everything.  After all, we are practitioners of turning data and feedback into meaningful marketing action that draws customers to us and gets them to choose us every time.

In his recent article on Marketing Access, Romi Mahajan asks the question – do you have to have a marketing education to be a good marketer?

[Editor’s Note: The  following post by Romi Mahajan was originally published by and is syndicated with permission by Marketing Access]

In a long tradition of breaking rank with my fellow Marketers on matters of substance, I posit that great Marketers (unlike great Physicists, Doctors, or even Economists) need not have any education in the discipline of “Marketing,” as it’s canonically defined.

In fact, as regards Marketing, I’ve taught myself all I know (which of course you can argue is very little.)  My assertion, therefore, is that lateral entry is possible and that autodidacts can be as successful as anyone in the sphere of Marketing.

Are you with me?  Do you agree?  Or do you think that $150K MBA was worth it?

There are a few ways to approach a conversation on this matter. The first is to look at great Marketers and find out if they indeed studied Marketing.  My own anecdotal evidence is that while some Marketers I respect have formal education in the discipline, many do not.  Point one for my theory.

Another way is for readers to concede the point but still hold that while many Marketers don’t have formal training in Marketing, they are not the ones that do epoch-defining of even memorable work.

Now that’s an interesting perspective even if I reject it.  But why do I reject it?

Because the entire notion that Marketing requires training is built on a specious foundation, on a misunderstanding of what Marketing, indeed, is.

Here is what it is NOT:

  1. Even remotely a Science.
  2. Even remotely Objective.
  3. Even remotely Meritocratic.
  4. Even remotely Predictable.

This isn’t to say that great Marketing isn’t hard.  Great anything is hard.   But, Marketing is NOT the province of an elite priesthood of Northwestern MBA’s and their Harvard rivals.

More Insights on Mobile Market Research

This post appeared originally on our sister site Research Access

Clearly, mobile continues to open up hitherto unknown opportunities. As a digital marketing agency, we are working with customers on various mobile and Microsoft Tag and QR code related initiatives – from powering contests, real-time coupons, location sensitive campaigns to scavenger hunts and continue to get requests for new, innovative ideas.

Just last week, I was talking with a friend that runs an online survey company about how Microsoft Tags and QR codes can revolutionize real-time, location based surveys and data gathering. An hour later, I see a QR code being used by REI in their store to gather feedback!

There is some adoption of this idea happening already and it behooves any company or organization that deals with a large number of end customers to seriously evaluate how they can use this now. Think about it – especially by using Microsoft Tag, you can get feedback ranging from the simple (up/down vote) to complex (invite them to share more details on a mobile webpage). Wherever, whenever. While waiting at the bus stop, riding the bus, reading a magazine at the salon or dentist, at retail, banks, airports….you get the idea. You may finally have the ability to hear from your customers right when they’re experiencing your product or service, and know exactly where they are when they respond and connect that back to your specific branch, outlet or service center.

And do something about it in real-time. Connect with specific customers one on one, provide incentives, or compensation for a poor experience.

We’re only limited by our imagination on how far we can take this.

About  – Srivats Srinivasan is founder and CEO of Nayamode, a digital marketing agency using smart technology to power rich creative. He has helped redefine how such services can be delivered efficiently and profitably in an increasingly flat world. With offices in two countries, Srivats drives overall strategy and has all-up responsibility for Nayamode. He can be reached at srivatss@nayamode.com and more info on Nayamode is available at http://www.nayamode.com.

Webinar Recording and Slides: How to Run a Field Research Project with SurveyPocket



Thank you to everyone who joined us today for the webinar on “How to Run a Research Project with SurveyPocket.” We had a great turn out with many helpful question and tips throughout. the session. Please review the slides and recording available on our blog. Thank you!

Webinar Recording and Slides: How to Run a Field Research Project with SurveyPocket



Thank you to everyone who joined us today for the webinar on “How to Run a Research Project with SurveyPocket.” We had a great turn out with many helpful question and tips throughout. the session. Please review the slides and recording available on our blog. Thank you!