Wired is reporting on the recent AdWords CPC increases that have taken a toll on arbitragers and others. The argument in favor of these increases is that it allows Google to display fewer (but more relevant) ads, thus increasing the CTR. On the flip side, some ad buyers are saying that it simply costs more now and the traffic isn’t converting to compensate for the difference.
I am curious if this increase also took effect across Google’s AdSense network?
Piper Jaffray added Netflix (NFLX) to its Alpha list, signaling that the stock displays potential for solid near-term appreciation [link]. To back its outlook, Piper cited Blockbuster’s weaknesses and the fact that rent-by-mail currently makes up only 20% of the movie rental market.
I totally agree, in the short term. However, in the long term, I think Netflix has its work cut out for it, if it is to continue growing in the age of bundled cable/internet/phone/whatever packages. I have no data to back this up, but it is my initial reaction that as “on demand” watching becomes more accessible with cable packages, folks will be more inclined to just click a button and watch the movies that their cable provider is offering.
I realize that NetFlix has an excellent “watch instantly” feature, but most folks aren’t going to be bothered connecting the computer to the television. And television still is the reigning champion when it comes to watching movies.
So I wonder: Will NetFlix continue to innovate its way out of a potential pickle? Or will it go the way of Napster and become irrelevant?
Disclaimer: I don’t have a position in any of the companies mentioned, though I am a NetFlix subscriber.
Matt Heaton, the founder of BlueHost (the firm that I use to host this site) wrote in his personal blog about the difficulty in balancing customer service needs of hundreds of thousands of customers [link]. He writes that the vast majority of folks contact customer service as needed, and don’t exceed the normal unspoken boundaries that a rational person would adhere to (we’re talking 50 calls/emails to customer service a month).
Then he writes about another group, I call them customer service greedy, who leap over this boundary:
These are the people that are generally new to web hosting and have expectations that are almost impossible to meet. They demand the world, don’t/won’t understand what responsibilities fall under their control (domain issues, script security, etc) and what is under our control (servers, network connectivity etc). Often they will call as many as 50 times in a single month for support and hand holding. These are the people that REFUSE to learn on their own and constantly require us to do everything for them. For their $7 a month they expect instant answers to their questions via phone, chat, and email, and tolerate no faults on our side as if they have a cluster of managed dedicated servers. These customers cost us 10-50 times what they pay us and threaten to leave when things don’t go their way.
I believe it is of the utmost urgency for businesses to provide the highest level of service to all their customers (something BlueHost does very well). That being said, as part of my work, I’ve always been in communication with customers/clients, both on a close level and at the periphery. And there can definitely be a *very* small core of folks who are extremely greedy with the finite customer service resources available. These people can be a drain on the system, causing delayed service for everyone else, and not only eat into profits, but potentially resulting in price increases for everyone.
Sprint recently went so far as to terminate the contracts for thousands of these ‘bad customers’ [link]. Now, I don’t think this was a necessary step – maybe it should have been a last resort. A more rational approach would have been to notify the greedy group that if they wish to continue to receive exorbitant service, they will have to pay a premium for it. I think BlueHost should consider doing that. Hire a few extra customer service reps to handle these trouble accounts, and charge them each an extra x amount per month for a premium service package.
Try to make some lemonade out of those lemons, Matt.