Too Bad Netflix Didn't Have a Customer Advisory Board!

I'm a Netflix subscriber, so, when I received my "personalized" email from Netflix CEO Reed Hastings on September 19, with the first line stating, "I messed up. I owe you an explanation," I thought to myself, "Too bad Netflix didn't have a Customer Advisory Board!" 
Hastings said that he should have been more communicative about the changes and why the company was making them, which he said was that the two divisions were becoming very different businesses, and the company wanted each to grow independently. Enter "Qwikster".

Then, on October 10, I received my second "personalized" email, this time from The Netflix Team, informing me that it was clear that many Netflix members didn't care for the "two websites" idea, so they were going to keep Netflix as one place to go for streaming and DVDs - no change: one website, one account, one password ... in other words, no Qwikster.

Wow ... again I thought, if only Netflix had a Customer Advisory Board.  They could have avoided all of the above mess ...  they would have saved themselves much time, effort, embarrassment, lost revenue, and lost subscribers.  With a CAB, they would have proactively sought feedback and learned how the market would react to their "two separate websites" idea. Additionally, CAB members could have provided guidance on how best to communicate changes to their customers.  

A recent LA Times article stated that Netflix shares recently plummeted nearly 35% after it reported a loss of 800,000 U.S. customers in the third quarter. Even more troubling is that the defections have continued through October, leading Netflix to predict lower-than-expected growth through the end of 2012.

You would think it obvious that a price increase of up to 60% would not bode well with customers, but add to that the rebranding attempt of its DVD service, and you have a recipe for disaster. Still, had these ideas been vetted to a group of customers in an Advisory Board setting, there is no doubt Netflix would have heard the "voice of the customer" loud and clear and could have avoided the losses they have experienced.

Customer Advisory Boards have proven results for ROI.  Our clients not only see increased revenue from CAB member companies, but also receive guidance on how NOT to invest dollars in the WRONG places.  As an example, a new product in development was presented to members at a recent CAB meeting for feedback; it was "nixed" for being off-target and simply not a fit for the company.  That one recommendation alone saved our client $2 million.

Just think what a CAB could have done for Netflix ...

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