Google made itself unique and outstanding by the famous “Don’t be evil” motto since its very beginning. And since then lots of companies esp. in high tech area had adopted it with various versions of how to state it like:
- User/Customer first
- Do the right thing
- Be socially responsible
- Be a good citizen
While there is a problem with all these beautifully stated slogan/tag-lines — it’s so high level and can be interpreted very differently just like our Constitution which need The Supreme Court to fill the gap from the words to the doings. And this type of challenges is NOT just limited to The Constitution, it happens all the time in our life, professionally and daily life. I think lots of times, you will feel like “I can not explain what it is as a concept clearly, but I can tell you whether is the right one if you gave me an example.”
So recently I found a GREAT example from Netflix, yes that Netflix maybe you are just watching on it now!:)
As a key part of FAANG(Facebook, Amazon, Apple, Netflix and Google), Netflix is the small brother compare with other 800-pound elephants in the room, its market cap($188B) is less than 1/3 of Facebook($669B, which is the 2nd from the bottom in the FAANG club), and only 13% of Apple($1.38T).
What Netflix decided to do is to automatic CANCEL subscriptions for the in-active(no use in 1 year) accounts with notification, well done!! This really showed that Netflix do NOT want to make dirty money and I think all paid subscription types of services should follow their move here as a role model!
While things is not that simple, as a for-profit organization, Netflix is also responsible for its share holders by making more profit. Let’s have a look from financial aspect about this decision. Per below blog from Netflix, let’s do a quick calculation for their top line(revenue) from financial perspective:
- Assume 500,000 (“only a few hundred thousand”) accounts will be auto-canceled by this new policy, and averagely $10/month/account, it’s $60M/year (500,000 x $10 x 12 months)
- $60M is just 0.3% of $20B(Netflix’ 2019 revenue)
So with 0.3% loss of annual revenue, what did Netflix gain here? TRUST! Not only all existing customers, but more potential customers now KNOW that Netflix has their interest in heart and they will be well taken care since Netflix is willing to make less money to take care of their customers. I do think this gain of TRUST will get Netflix paid off much better than $60M/year!
BUT, I do want to challenge Netflix to even make it *righter* — Instead of One year inactivity by a user to trigger this auto cancelation, they should shorten it to 3 months. Since who would not agree that you don’t need the membership any more if you have NOT watched a single movie/drama/documentary in 3 months, which is 12 weeks and 90 days!
Again, great job done by Netflix by doing the right thing proactively!
I want to challenge all the organizations out there to follow this move since it’s win-win-win!
- Win for your user/customer: They get more value
- Win for your business long term: Happier users/customers who trust you will guarantee you a great commercial performance
- Win for the society: More organizations will follow.
Last, a pro tips for everyone as a consumer: To avoid unnecessary waste of your hard-earned income, do a regular check-up of all of your subscriptions and take actions to cancel it if you do not need it any more. At the end of the day, you are the one have ultimate responsibility over your actions(it was you started every subscription)!
