Twenty years ago, I used to trek to a Blockbuster, to rent movies begrudgingly. I hated how they did business, but I liked the convenience of watching movies at home. In early 2000, Blockbuster earned $800 million dollars in late fees pissing off every customer but making their shareholders rich.
When the Blockbuster Board of Directors faced an upstart called Netflix who wasn’t charging late fees, they made a calculated decision to keep the late fees and not change their business model to adjust to the market change they saw coming at them. Why kill the golden goose? Why walk away from all these riches?
Of there 9,000 stores they operated, there is one remaining blockbuster store in Bend, Oregon. I’m not sure why it is still in business but I think it is more of a museum.
Lessons from Late Fees
What business practice do your customers dislike that makes you lots of money? How might changing that model prepare you for the shifts in your marketplace? What could you be doing today so that you could eliminate the pain and friction you create for customers so that in the long run, they want to keep buying from you?
Are your customers reluctantly buying from you because something you do makes them want to scream? Is your customer service a disservice?
A business should delight their customers. If you base your business model on extracting a pound of flesh, you are going to run out of humans who want to buy from you.
Still charging late fees or doing other things to annoy your customers?
You can set up a time to chat with me about your marketing challenges using my calendar. Email me jeffslater@themarketingsage.com Call me. 919 720 0995. The conversation is free, and we can explore if working together makes sense. Try my new chat feature on my site if you have a quick question.
