Sentient Insight: the business blog for consumer psychology and consumer marketing

The “Do as I say not as I do” paradigm may work for Moms and their kids, but when it comes to consumers and marketers, the exact opposite holds true.  Marketers should in fact, follow what consumers do rather than what they say.

How behavioral science could have turned a multi-million dollar mistake into a multi-million dollar topline growth. When Netflix imposed a 60% increase in the prices consumers paid for their movie rental and streaming subscription service, naturally, consumers were not happy. Netflix did the rational math to determine price per subscriber and the percentage of subscribers per distribution channel etc., etc.  The logical math would have shown that only a small percentage of their consumers would be impacted and that they should press on with the increase.  However, underestimating the impact of consumer emotions and not factoring in the degree of those consumers around their willingness to pay more proved to be a critical misstep.