This year we saw many great triumphs as well as many things that companies no doubt wish they could do over. With the burgeoning popularity of social media and the 24 hours news cycle, both the good and the bad seem to be amplified to the point that they gain momentum. It has never been more important for technology companies to listen to their customers and make changes to their products and procedures. These three companies missed the memo that their product or service was causing a substantial amount of backlash and ultimately paid the price.
Netflix
Possibly the biggest business failure of this millennium, Netflix caused an uproar and subsequent exodus after initiating sweeping changes to their price structure. What customers paid $9.99 for at the beginning of the year they would be paying $16.94 at the end of September. Although the price change wasn’t that much, the public overacted and the negative attitudes towards the company went viral.
Netflix lost nearly 800,000 subscribers between July and September, and the announcement put a halt on their skyrocketing stock price. In a move that he later recanted, Tony Hastings announced that the DVD by mail service would become a company called Qwikster that would be a separate entity from Netflix. After another round of customer backlash the company gave in and folded Qwikster fairly quickly.
Klout.com
Over the summer a new social media tool called ‘Klout’ took the internet by storm. Billed as the “standard for influence”, Klout promised to reward influencers with free merchandise and to quantify the influence of users across all forms of social media. The service had its critics, but was generally well regarded until they made substantial changes to their scoring algorithm that dropped the average user’s score between 5 and 10 points overnight.
Users took it as a personal attack on their worth as human beings and many users deleted their accounts at Klout en masse. Even more devastating was the scathing blog posts that called for other users to delete their accounts and pointed out some privacy issues like the fact that people who have never even heard of Klout have a page made up for them there. Klout has since tweaked the algorithm so many users have saw recent gains in their score, but the damage is done.
Apple iPhone 5
In one of the most highly anticipated product launches of the technological era news outlets scrambled to find out what features would be present on the latest incarnation of Apple’s iPhone. Test models were lost by employees, technology pundits made their best guesses as to what the new specifications could be and users arranged to get their phones replaced on the day of the launch.
When Apple launched the iPhone 4s, an upgraded iPhone 4 with a new voice recognition software and improved camera, some users were irate while others were merely disappointed. The death of Steve Jobs a few days later moved the spotlight from Apple’s product launch failure, and it was all but forgotten as legions of Apple users mourned the death of their guru. Apple, unlike other companies who made monumental marketing and procedural blunders in 2011 will have the chance to ruin their company’s image again in 2012.