When Consumers Respond, Listen

When united, consumers do have power. How corporations respond to their customer base can be the difference between retaining customers and losing them by the masses. Just take a look at these two very different situations.


In July Netflix announced it would split the DVD and streaming video plans and charge $7.99 for each service. This increased the price from $9.99 per month to $15.98 per month, a whopping 60%. The plan was to split the businesses (DVD and streaming video) entirely and call the DVD rental business Qwikster.

Consumers revolted, but Netflix didn’t listen. The company lost 800,000 consumers in the 3rd quarter of 2011. An all time record for the company. And Qwikster appears to be dust in the wind.

In a letter to shareholders, Netflix acknowledged its mistake.

“$7.99 for unlimited streaming and $7.99 for unlimited DVD are both very aggressive low prices, relative to competition and to the value of the services, and they are the right place for Netflix to be in the long term. What we misjudged was how quickly to move there. We compounded the problem with our lack of explanation about the rising cost of the expansion of streaming content, and steady DVD costs, so that … many perceived us as greedy. Finally, we announced and then retracted a separate brand for DVD. While this branding incident further dented our reputation, and caused a temporary cancellation surge, compared to our price change, its impact was relatively minor.”

While Netflix is only considering the 800,000 customers it lost, let’s take a look at the broad impact this had on the brand. If each ex-customer told 3 friends, family members or co-workers how upset they were with the company, you are looking at 2.4 million people. Add in all the negative media coverage and you are looking at 100s of millions of people who have potentially been impacted.

Bank of America

Recently a number of banks, including Bank of America, informed consumers they would be charging a $5 monthly fee to debit card holders. For the record, I’m a Bank of America customer and never received direct communication from the bank that this was about to happen.

Nevertheless, word spread and consumers were furious. Bank of America, among other major lenders, including JPMorgan Chase and Wells Fargo, decided to drop the fees. Certainly consumer uproar had an impact on these changes; however, competitive pressure and lawmakers certainly played a roll as well.

Other financial institutions were already starting to reach out and promote their free checking/debit card use. In fact, I received an email earlier this week about a no-cost option from a credit union.  If BoA, JPMorgan Chase and Wells Fargo continued to move forward, you better believe customers would be jumping ship.

Now certainly there are different aspects at play with each of these examples. However, one thing is for sure, consumers do have power. Companies need to be listening and responding when necessary.

Jennifer Manocchio


After starting her career with Edelman in Chicago, Jennifer joined Sweeney and quickly established herself as an exceptional industry innovator. In 2004, she opened Sweeney’s first full-service office outside of Cleveland and quickly rose through the ranks to become agency president. Jen leads by example and without fear. She has been critical to agency growth throughout the past decade and continues to lead the agency into the future.