Archive for Business

FAQ

Eight months ago, on this blog, I described with excitement my decision to leave Adobe and join ESPN as an analytics manager. At the time, I knew that I was embarking on a tremendous learning experience, and I thought I even knew how everything would go. Sports, analytics, and New England; how could I lose? Call it a youthful sense of invincibility, if you will.

Well, as of this past Monday, I have rejoined Adobe, and I am thrilled, excited, and grateful for the entire turn of events. The Adobe Digital Marketing Summit took place this past week in Salt Lake City, and as I wandered the halls of the Salt Palace among colleagues, customers, and industry folks, a few things happened.

First, I felt like I was home, immediately. Second, I answered a barrage of questions about the past eight months. I took mental note of these questions and I’m going to answer them here, in good old FAQ form. So here we go.

FREQUENTLY ASKED QUESTIONS ABOUT BEN’S RETURN TO ADOBE

Q: So. . . what happened?

A: This is actually a tremendously complicated question, but I will simplify it by saying that once I started at ESPN, I quickly started to realize that making software is what gets me out of bed in the morning. When one of the engineers at Adobe asked me this question, I told him that I was sure he could go be a fantastic analyst, but he probably wouldn’t enjoy it—he needs to be programming and solving problems using code. That’s just in his DNA. I certainly could have stuck it out—and, in fact, tried to stick it out—but it wasn’t for me. If I needed to spend this time in order to learn that lesson, I can’t say that it wasn’t worth it. I’ve got a strong sense of direction for the foreseeable future, and that’s valuable.

Q: How were the people at ESPN?

A: They were great, and I consider many of them friends. In fact, I saw them at Summit and it wasn’t weird. . . well, it wasn’t too weird, at least. I’m so grateful that they gave me a chance. They’re brilliant and they are doing cutting-edge things with digital analytics. If you ever have a chance to them talk about cross-platform analysis, as my former VP Dave Coletti did at eMetrics NYC last October, you will know what I mean.

Q: What will you be doing at Adobe?

A: I’m returning to the Product Management team, working on analytics products—SiteCatalyst and more. When I originally joined that team almost two years ago, I wrote that I felt like a minor-league baseball player getting the call-up to the majors to play with his heroes. I still feel that way, and am excited to be part of such a bright and talented group. It seems that Adobe’s recent acquisitions have only added to the brainpower and passion. I hope that I now bring at least a little bit of unique insight having been an analytics practitioner for most of the past year.

Q: Are you staying in Connecticut, or moving back to Utah?

A: Actually, we have really enjoyed our time in Connecticut. The area is beautiful and our neighborhood is full of kids who want to play with our daughters almost constantly. But we still own our home in Utah, and rented in Connecticut, and it’s time to get back to the family and friends that we’ve missed so badly. But we had a great quality of life in both Utah and Connecticut. We will definitely miss Connecticut and hope to visit our friends there in the future.

Q: Why did you go back to Adobe?

A: First, as I mentioned above, I need to be in tech/software. That’s a given. Second, I believe in what Adobe is doing in digital marketing and I want to be a part of it. Third, there is a reason that Adobe consistently appears on Fortune’s “top places to work” list. It really is a fantastic company in too many ways to list here, but I especially love the way Adobe trusts its employees and values input from all over the organization. At least, that has been my experience, and I hope it will be again.

Ten Things Your Vendor Wishes You Did Better

Before joining ESPN, I spent a little over five years at Adobe (formerly Omniture, prior to 2009 acquisition) as an enterprise software vendor. While I had four different titles during those five years, the overall theme of my time there was “customer relations,” as I moved from technical support to community management to product management. I gave a lot of thought to the different kinds of customers I worked with. What made some companies really successful in their interactions with us (and likely with other vendors), while others—using the same products/solutions—struggled to get value out of the relationship?

Anyway, I was honored to be invited to present at Web Analytics Demystified’s first ACCELERATE conference in San Francisco last month. The WAD team thought it might be nice to have me present on ten ways to get more value out of vendor relationships, and I tweaked that slightly, giving it the title “Ten Things Your Vendor Wishes You Did Better.” It was intended to be slightly edgy—hopefully we all realize that there are no perfect software vendors, but I wanted to be clear there are also no perfect clients, and (despite what some conversation out there may suggest) vendors are not actually evil, two-headed, fire-breathing monsters. My goal was to give listeners some points that they could use at they work with their vendors so that both sides of that relationship can benefit and improve together as partners. (As I said when I got to the podium, I am the Dr. Phil of ACCELERATE.)

So here are the ten things that your vendor wishes you did better, with some articulation on each. These are in no particular order, and while they were written to apply to digital analytics (and that is how I will speak of them), they likely carry weight in other types of enterprise software as well.

1. Teach your internal users that not all problems are the vendor’s fault. When I got to ESPN, we had an intern who had just finished doing a survey and holding focus groups to help us understand some of the problems that our internal analytics customers were facing in working with our software solution of choice. One of the themes that emerged was that they were having a hard time finding the reports they needed.

Don't just blame the vendor!It would have been easy for us to lay that on the vendor and complain about the non-intuitiveness of their interface. But my VP wisely pointed out that our vendor gave us the ability to customize the UI nearly five years ago; we simply haven’t taken advantage of that feature. So is that on them? Maybe partially. But it’s also partially on us, and if we make that clear to our users, they will be able to maintain a bit more trust and confidence in the tools that we are providing to them.

Similarly, if your analytics implementation is three years old, don’t immediately complain that your vendor “doesn’t understand your new business initiatives.” They are there to support you, but ultimately your company is responsible for updating your implementation as your strategy changes.

Take some responsibility and hold yourself partially accountable for implementing, maintaining, and supporting the vendor solution. Everyone will look better in the long run if you do so.

2. Don’t be “the client who cried wolf.” A few years ago I worked with a customer for whom every issue was more than critical—it was (they claimed) cause for termination. We ended up in a cycle where they would call in and demand an immediate resolution “or else.” That “or else” also included the promise to publicly embarrass us using social media or any other means available to them.

Your vendor is not your puppetIt is neither wise nor responsible for your vendor to react to every product complaint or feature request in the same way. In other words, if everything is nuclear, nothing is nuclear. And if you keep insisting that everything is nuclear, it becomes difficult for the vendor to discern which issues really are mission-critical, and which are merely important. As a result—somewhat paradoxically, it might seem—you actually risk getting worse service. In the case I just mentioned, I believe we maintained a high level of support, but we certainly did not shift around resources every time we got a phone call from this group. If you act like a bully, expect to be treated like a bully. It’s the only way for vendors to maintain some semblance of order and progress.

There are certainly scenarios where a relationship has deteriorated to the point where it might be time to look elsewhere. Maybe you’re not seeing the value you expect over a long period of time. Just make sure that you don’t play that card unless you really mean it. And if that remains your ace in the hole, it will carry some real weight when you play it, and your vendors will do whatever they can do to see you through to resolution.

3. Share your business with them. I spoke with one Account Manager who said that this was the most important thing that her clients do to help her serve them. A few years ago she was working with a food delivery business. In the course of her conversations with that team, they had explained what they do, and why they are passionate about their brand and their product. They had gotten her into their product catalog.

Your ideal account team on the vendor side—sales, account management, consulting, support, etc.—functions almost as an extension of your own team, right? They are more than just representatives—the people you call when something is broken or when you need to purchase a new product/feature. What better way is there to create an extension of your team than to share with them what you’re trying to do? Help them feel like a part of the team and they will do just that. So tell them what’s going on at your company. Tell them why what you’re doing is neat and how you’re changing the world.

When this Account Manager saw her client’s product catalog, she actually became a customer by purchasing some food for delivery from them. How is that for closing the loop? Now not only does she know what their business goals are, but she has been through their whole site experience, and she is uniquely qualified to offer strategic and tactical advice. That makes her happy, and it certainly helps her client get more out of the relationship.

4. Use the right resource for the question. What would happen if your vendor salesperson sent an important and time-sensitive question about your contract to your Network Operations team instead of to you? There are a few possible outcomes:

  1. Network Operations fumbles around trying to figure out who is the right person to answer the question. The e-mail finally makes it to you, but precious time is wasted.
  2. Network Operations wastes a bunch of their own time and resources to answer the question themselves, when you may have known the answer off the top of your head.
  3. Network Operations assumes they know the answer and fires off a quick (but incorrect) response, creating an awkward situation months later.

To some extent, the same outcomes are possible when you send to your one of your vendor’s product mangers a question that is really ideal for their support team, or when you submit a request for detailed consultation to your account manager instead of to your consultant. It is likely that your account team has specialized roles that are uniquely suited to serve your varying needs. Talk to your Account Manager and find out what resources are available to you all across their company. You can always rely on your Account Manager as a point person, but take advantage of access to people whose roles are uniquely designed to match your differing needs.

There certainly is a time to call product management as opposed to support or sales, but if you can learn whom to contact in various scenarios, you will get faster, more expert care and you will find yourself much less frustrated with the process of getting the answers you so desperately seek.

5. Participate in the community. I know I get a lot of value out of participating in my vendor’s community, but how does it help the vendor serve me?

Smiling community facesFirst, understand that by “community” in this case I am not referring solely to Twitter (although that may be a large part of it). This includes opportunities such as beta testing, customer advisory board participation, and more. When I was at Adobe we launched the Idea Exchange, which allowed customers to share their product enhancement ideas with one another. Not only did that give us, as a vendor, some phenomenal ideas (many of which we implemented), but customers frequently solved each others problems.

And that’s my point: even if all you do is sit on the sidelines and listen—you watch the tweets or the ideas or the forum posts—you will be exposed to some of the forward-thinking solutions that other customers are creating. You will be hip to all of the latest news coming out of your vendor’s headquarters. It’s also a great way to establish relationships outside of your account team. When I operated the @OmnitureCare account on Twitter, I was never part of anyone’s dedicated account team, but the relationships I established through the community allowed me to serve customers efficiently and, often, publicly—to the benefit of casual observers who may have had similar questions.

6. Don’t assume telepathy. My colleague at ESPN once told me, “People think that our vendor should be able to read our minds without us having to tell them what we expect and when we expect it.” What a recipe for disaster!

You hate when people do this to you:

  • “Hey Ben, can you tell me whether our campaign was successful?”
  • “How do our metrics look?”
  • “Did our change to the home page lead to more engagement?”

Vendors are not Dr. X.These are vague questions that are tremendously frustrating to serve. I know that a ton of analysts out there get these questions frequently from their colleagues, because I see the complaints on Twitter. Why do we think that our vendors are any better at reading our minds?

Be clear. You don’t just want an executive dashboard; you need one that has a specific set of KPIs and addresses specific business requirements, and perhaps it needs to look a certain way. Oh, and you need it by a specific date so that you can show it off at your next quarterly department meeting. Even this is too vague, but hopefully you get the point. Hopefully you have smart, talented vendor representatives working with you, but (thankfully?) they are not Miss Cleo. So be as clear with them as you wish people were with you, and they will amaze you a lot more frequently.

7. Hold that periodic call and make it count. This happened all the time: I would field an angry (sometimes borderline violent) complaint from a customer via Twitter. I would talk to the Account Manager to ask what is going with this client, and he or she would (often with a wistful sigh) respond some variation of:

  • “We have a weekly call scheduled, but he never shows up.”
  • “I want to meet with them, but they won’t accept my invites, e-mail, or phone calls.”

Even if you need to yell, hold the callFrankly, as a vendor, I had a hard time mustering up sympathy for an unhappy client who refused to get on the phone with the account team to discuss the relationship every so often. I hope that your vendors are offering some sort of regularly scheduled “check up,” be it weekly, monthly, or even quarterly. More importantly, I hope you are actually engaging with your vendor to make sure that you are both on the same page. If you need to yell at them during the call, so be it. Just make sure you’re having it. Anything is far, far better than nothing.

In an ideal world, this phone call is more than just a discussion about your complaints, product bugs, feature demands, etc. It’s a great opportunity to get your account team involved. Hold them accountable to provide strategic guidance in your use of their products and solutions. Tell them three items of priority to your business, and ask them how this relationship is going to help you achieve those goals during the coming quarter.

I worry that many of the clients I mentioned above—the ones who wouldn’t bother with that scheduled phone call—got in the habit of skipping the call because there were, at some point, no major complaints to address. If there are no showstoppers, why spend the time, right? Wrong. This is your time to really move forward. In most cases, the act of resolving support tickets is not going to change your business as quickly as huddling on your strategy is going to change your business.

8. Understand the reality of resource limitations. This is a true story. Once I was at a basketball game and I tweeted a photo of the court from my seats. I got a response a few minutes later from a client who said—and I know he was mostly kidding because there was a smiley emoticon attached to the tweet—”How dare you attend a basketball game while my bug, #XXXXX, is not resolved!” He may have been mostly kidding, but he was also partially serious.

It would be great if vendors could build everything that we need built, and fix everything that we need fixed, and do it yesterday. This Venn diagram speaks the truthThink 24/7 support, engineering, network, and product staffs spanning the globe and just building, building, building. But it isn’t so, and will never be so.

The reality is that vendors are tasked with looking out over their customer base and their market/industry and determining what needs to get done, and in what order it needs to happen. Sometimes this will be pleasing to you; sometimes it won’t. You will not love every product or feature that they release. That’s okay. Part of their job is to balance your voice with their own interpretation of the future.

It took me a full year in product management to realize that if vendors always build what exactly what their customers are demanding, those customers will never be happy.* The vendor will always end up a step behind because things change so rapidly. We, as customers, ask for the things will help us right now, not necessarily the things we are going to need in a year or two or three.

So do not be upset if a product manager goes to a basketball game. Understand that the world is more complex than the bug you reported, and that the vendor has its own vision and strategy that will hopefully impress you in the long run—even if there are sometimes point releases that make you yawn with boredom.

(* – Note that Cuban is going for high shock factor in the title of his blog post. In reality, listening to customers is critical, and is something that the best vendors do really well. My point is simply that there are also other sources of insight, vision, and innovation which help your vendor make the best decisions.)

9. Prioritize everything. And I do mean everything: support tickets, outstanding questions, bugs, feature requests, consulting projects, and more.

Prioritize everything!This is about expectations. Help your vendor understand what matters most to your business at any given time. This is critical because the list may change frequently. Something that mattered greatly two months ago may have been superseded by a new challenge. Don’t let your vendor go on thinking that the old assignment is still priority number one if it’s not.

This is actually a fantastic opportunity to use data. When I was preparing to move into product management, I asked a developer friend (not with my company) what successful product managers do to help developers. He said, “They bring data. If you can show that Feature X will generate $5 million in profit, or that 80% of customers are demanding Feature Y, it gives our work clear purpose.”

Applied to your interactions with vendors, consider how much easier it is for your account team to understand the priority of a bug fix if they know that you have $400,000 in revenue riding on it. That kind of data helps you prioritize your work, just as it helps your vendor understand just how much their services matter. That makes it much easier for a developer, support agent, or consultant to justify spending an extra few hours getting the issue resolved.

Where I have seen customers prioritize their needs, it has improved their level of service immensely. Account teams and clients are always on the same page, with both groups understanding what needs to be addressed first, and why.

10. Ask! This little list could easily be twice as long, but at 2,685 words and counting, I’ll stop on this point. Every company is different, every vendor is different, and every account team is different, so ask what you can do to help them serve you more effectively. I honestly do not know a single Account Manager who would not appreciate the opportunity to have this conversation, and to discuss how both vendor and customer can get more out of the relationship.

I have seen a number customers who, either intentionally or serendipitously, have applied some of the suggestions that I have discussed here. Are there still hiccups? Certainly. I said up front that no vendor is perfect! But I believe that these customers also understand partnership, and the concept of increasing returns.

So give it a shot; help your vendor help you. Simple concept, worth its weight in ROI.

All photos © ShutterStock

In Support of Homers

Wisdom from @usujason:

I have more respect for people who say “I’m a homer for X but I’ll try to be [impartial]” rather than a wolf in sheep’s clothing.

If you have a preference for a certain brand, product, or service and you tweet/blog/speak negatively about its competition, it’s insulting and deceptive for you to then pretend that you have no preference. I see too many supposed “independent seekers of truth” within a given topic who secretly (or not-so-secretly) harbor strong preferences that guide the way they perceive that area of their lives.

Look, it’s not a bad thing to be a homer. We all have things that we love and prefer over alternatives. Among other things, I’m a homer for Apple, ESPN, Omniture/Adobe, Boston Red Sox, BYU sports, and Diet Coke. I’m very clear about this. These preferences guide the way I view certain things. . . as well they should! We need schemata to help us navigate our lives.

At the same time, I can certainly try to see other perspectives and I’m willing to discuss, learn, and even change my opinions given the right circumstances.

You probably don’t have an opinion on every topic. That is also good, as long as it is genuine. My point—my request—is that you please not claim to have no opinion when you quite clearly do. Integrity demands this level of honesty.

You don’t have to come right out and say that you’re a homer, but don’t insult all of us by telling us that you’re independent if your words and conduct say otherwise. The people around you are smarter than that, and we deserve more respect.

Google+ and Community: Not Quite Yet

I went on a rant against Google+ (via Twitter and Facebook, of course) last week, and I won’t do that here. For the record, I don’t actually have anything against Google+ itself. My only issue with Google+ personally is that people are abandoning other social media in favor of the new kid on the block for reasons that don’t make much sense to me. (To learn about those reasons, you’ll need to see my Twitter rant.)

Tonight, Jeremiah Owyang, internationally recognized social media guru with Altimeter Group, tweeted that it might be time for a change:

All: The Google+ is richer, easier embedding of media, longer comments, less fragmented and easier to find. Google+ is threat to Twitter

I’m sure he’s right. Google+ is a threat to Twitter. He’s not the only one who has said that, and he’s not the only one who is voting with his digital feet, so to speak. But Owyang’s comment brought to mind one very real complaint about Google+ as a social media platform from my perspective as a former Community Manager at Omniture/Adobe. Here it is:

I don’t understand how Google+ at present allows the creation and growth of community.

Round one. . . fight!Jeremiah is right that Google+ is less fragmented. But at the same time, it has no concept of free-flowing conversation organized around a topic. You can say something about, say, web analytics. Anyone who has added you to his/her circles can see your thoughts and comment on them. But unless your post is “reshared” by others, it ends there.

One of the great benefits of Twitter is that any of the service’s millions of users can see the world’s stream of consciousness on a topic. I don’t necessarily need to be following @usujason or @vabeachkevin there to see and respond to something interesting that they say. At least a handful of real-world friendships have developed out of the #omniture and #measure communities on Twitter among people who may never have found one another via a “less fragmented” service such as Facebook or Google+.

When I wake up in the morning, I check out #measure to see which new blog posts are causing a stir, and to read the conversation among a huge variety of practitioners, vendors, agencies, etc. I can’t do that on Google+. I can see what Eric Peterson is saying, and I can see what Keith Burtis is saying, but their reach only extends to those who have explicitly added them.

That’s a key element to community building, in my experience; you need a platform that crosses all lines and allows people to interact around a topic of shared interest—not simply because they happen to already be in one another’s circles.

Similarly, as a community manager I needed a way to follow the conversation about my brand. My angle was one of technical support. How could I have reached out and engaged with frustrated users unless I could see their complaints? For example, Rudi Shumpert (@rudishumpert) is a web analytics superstar. Three years ago, he was brand new and was struggling to understand some Omniture documentation. He complained. I was there. I didn’t see him because I knew who @RRS_ATL (his former handle) was. I saw him because he mentioned my brand and I had a Twitter search running all day long. Brand detractor became brand advocate within a matter of minutes.

Also, why I hate Hootsuite

This is actually a tangent. I hate Hootsuite. I tried it a few times, but the idea of keeping a browser window open all day so I could monitor the conversation has always been abhorrent. It’s too easy to close a browser window to work on some other task and then realize four hours later that you’ve been sitting out of the conversation. In my particular role, I could never do this.

But that really isn’t my point. Google+ apparently has a rudimentary API, but nothing that developers have used to build their own apps for organizing Google+ content in a way that is conducive to community-building. This is, of course, related to the previous points. (In fact, maybe I only have one point, but, by Jove, I’m going to stretch this thing out.) With a solid API and some additional ways to organize conversations, developers can churn out enterprise-ready social media management tools and integrate Google+ into existing social media management tools. Until that happens, Twitter’s API still rules. It remains, by far, the easiest source of raw social media to work with.

Longer comments = more windbags

Look, this is a blog. It’s the ultimate celebration of windbaggery. But at least you know what you’re getting with blogs. Jeremiah seems to think that the ability to pontificate at length in the comments on Google+ is a good thing. I think it has its place. (Blogs? Facebook? Google+? Probably all of the above.) But I really feel that—at least in the communities where I participate on Twitter—the 140-character limit is a good thing.

It’s not that I don’t want to hear more from my friends in the community, but the exercise of whittling down a thought into 140 (or 280, or 420, etc.) characters forces you to be succinct and straightforward. This often makes it easier for community members to process conversations with minimal distraction. I can read a tweet in about three seconds. I can read a four-paragraph response to an Avinash posting in, what, two minutes? Too often, the three second investment provides equal or greater returns than the two minute investment because the author has been forced to say in 40 words what he could have drawn out into 500.

(Of course there are crappy tweets, too, but at least they’re short.)

He’s 100% right about the ease of sharing on Google+

Yep. No argument from me there.

Conclusion: In defense of Google+

Later (still on Twitter, somewhat amusingly), Jeremiah pointed out (correctly, I’m sure—after all, this is what he does) that Google+ will undoubtedly add the missing community elements in the near future:

I’m sure those features, APIs and hash tags will come.

I’m not opposed to this at all. I will embrace Google+ for community when it is ready, but it certainly isn’t there yet. So what am I saying?

I’m saying that, right now, in my opinion, Twitter still has tons of value for business.

I’m saying that, right now, in my opinion, the best place to connect with brands and get help or provide feedback is still Twitter.

I’m saying that, right now, in my opinion, the best place to build communities around topics that matter to you is likely still Twitter.

As for what the future holds, I’ll defer to Jeremiah and other thought leaders. And I’m certainly playing around with Google+ so I’m ready if/when the shift happens.

So am I “doing it wrong?” Am I missing some feature that makes Google+ a boon to communities? What else do you think Google+ needs to do before communities are possible there?

Netflix, consumer surplus, and brand loyalty

Having lived through the occasional PR disaster in my previous life as a Community Manager at Omniture, I sympathized with the people responsible for managing social media for Netflix following the company’s rate hike for those who receive DVDs by mail. Today cannot have been a fun day.

It led me to think about the relationship between consumer surplus and brand perception. I’m not an economist, but one of my favorite principles of economics is the study of the difference between the value from a product or service and the actual price that customers pay for it.

I haven’t studied this, but I’d be willing to bet that Netflix (at least prior to the announcement earlier today) had a tremendously high consumer surplus. Until recently, I got unlimited streaming and one DVD at a time for something like $9.99. My family uses streaming constantly, and we’ve discovered some gems via DVD. All of this happened without us ever having to leave our home. High perceived value, low price.

Why did Netflix raise prices? There are likely several reasons. I like my friend’s suggestion: “Netflix needed to divorce mail and streaming so that it can compete with future streamers on their level.” Certainly possible.

When you change the price without changing the perceived value—which is exactly what Netflix did to so many of its customers today—you are inevitably going to price out some segment of your customer base. They slip below the line and no longer receive enough perceived value to justify the cost, and they drop your service. But as long as Netflix maintains enough customer surplus that the increase in prices more than offsets the loss of some business, it’s a good move—at least on paper, in the short term.

But even if customers keep paying, changing that relationship has an impact on their perception of your brand. I spoke with a former colleague who has been a Netflix customer for eight years. She’ll remain a customer (begrudgingly for now), but her loyalty to the brand is shot. Granted, that’s a sample size of one. However, the venom and bile that the public relations and social media teams at Netflix must be feeling today is certainly not limited to this one customer. My Twitter feed has been literally filled with justifiably angry complaints against Netflix because consumer surplus decreased for literally every user.

I’m not sure how you come back from this. Trust is hard to earn and easy to lose, and even if the coming weeks and months demonstrate added value—such as improved quality of service or a larger library of streaming content—when a brand alienates its loyal followers by screwing with the relationship between perceived value and price, it’s hard to win them back.

So, how could Netflix have prevented this? I would start by articulating the value to customers a little more clearly than this statement from Chief Service and Operations Officer Andy Rendich, found in the company’s press release today:

Netflix members love watching instantly, but we’ve come to recognize there is still a very large continuing demand for DVDs by mail. . . By better reflecting the underlying costs and offering our lowest prices ever for unlimited DVD, we hope to provide a great value to our current and future DVD-by-mail members.

Consumers don’t care what your costs are. You can’t sell a price hike to consumers by complaining about your costs. They care about the value they’re receiving for the price. If the issue is cost (and note that Netflix has a solid net profit margin), then your business model was flawed from the start. Netflix torpedoed its own brand equity by decreasing consumer surplus.

Can you think of any other individual companies that have thrown caution—and brand perception—to the wind by increasing prices without satisfying customers’ need to understand how they benefit from the change? (I can think of at least two. I used to love unlimited data on my cell phone.)

For now, Netflix can rest assured that many or most of its customers will likely still see enough value to justify the price. I certainly feel that $16 a month is a good deal; most of the complaints I’ve seen include the disappointed recognition that we’ll all have to pay at the new prices. We can’t live without our movies. Netflix basically has a monopoly, giving it some flexibility to play with consumer surplus.

Netflix is trying to cash in on its tremendous consumer surplus while it can. Is it a myopic strategy? Where a loyal customer base could have helped Netflix survive a future onslaught from Apple, Google, Amazon, or another challenger, they’ve sacrificed much of that loyalty today for a quick boost in revenue. The real danger is that, by impeaching its own brand, Netflix has created a sizable market of former loyalists who are now begging and pleading for a competitor to arise with greater consumer surplus than Netflix offers.

And I can’t imagine a more terrifying scenario for a brand manager than one where your customers are clamoring for the competition to succeed.