We’ve all heard the glory stories of raising your prices, losing your worst, cheapest clients because of it, being more profitable, your remaining clients not being so picky, and just loving life after the simplicity of raising your rates… But Netflix losing 800,000 people in 6 months is MASSIVE. Even at their lowest monthly price, that’s a revenue loss of 6.5 MILLION bucks a month!!! WOW!!
You would have to think that number is more than they thought they would lose… I guess that’s only 2% of their clients, but no matter how you divide it, that’s a TON of people who don’t like you anymore.
I think if you’re going to jack your prices up on your clients, you should be monitoring it a little closer to make sure you don’t have a mass exit like Netflix is experiencing. You would think they would have been looking every month at the cancellations and seen a trend.
I am always interested in pricing. What is the perfect price for your services? You price yourself too high and you’re out of the market. You price yourself too cheap and you get more of a price oriented client that doesn’t care as much about your relationship and services. Or worse, a lot of people associate the cheapest price with the least quality service. Obviously the customers of Netflix decided that the new pricing model wasn’t worth it at all!
Something to think about next time you think of raising your prices.
I’m very proud of the fact that we’ve NEVER raised a price on a client. Now we have raised our fees over the years, but we’ve always locked in our current clients in at their rates. NO client of NW has ever gotten a fee increase, and we don’t plan on ever changing that policy. We like to reward clients for being loyal, not take advantage of them like the cable company.