Course Correction
Nothing quite tops a perfectly written letter. I’m drawn to letters, so I stopped to read a letter from Dennis Pence, the Co-Founder and Chairman of Coldwater Creek, printed on the cover of the most recent catalogue.
He retired after 26 years. He came back a year ago and found something was wrong. He refocused the brand on what it once stood for. He asked former customers to come back. He did it graciously.
In stark contrast is the recent e-mail and blog entry from Reed Hastings, Netflix’s Co-Founder and CEO. Hastings began with: “I messed up. I owe you an explanation.” His blog entry addresses viral customer complaints about price increases. It then abruptly announces that Netflix will focus on streaming video and a new company, Qwikster, will offer DVD service by mail.
Reaction to Hastings’ letter has been vehemently negative. The company stands by its decisions. CFO David Wells stated: “We have a long history of having been transparent with our customers… We’ll take our licks as we get them.”
There is a lesson here. People hate drastic changes, particularly given today’s uncertain environment. Coldwater’s leadership is course correcting, acting as a brand steward on behalf of its customers, and Coldwater is in control.
I get that Netflix doesn’t want to go the way of Blockbuster. Its leadership acted boldly to evolve the company, and I hope they succeed. Still, their actions were on the company’s behalf, not its customers’. As a result, its customers, or former customers, are now dangerously in control of the brand.
I understand that change is sometimes necessary, and sometimes wise. This week’s letters just make it clear to me that the more selfless a brand’s motive, the better.
