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Broken Promises: How Brands Fail

Netflix's decision to make password-sharing more difficult has been in the news a lot over the past few weeks.

When you think about it rationally, the fact we're collectively upset with the company for essentially saying, "Okay, folks, seriously, we need you to stop sharing your password so all of your friends and family can enjoy our content without paying for it" is ludicrous.

Sure, there are very legitimate arguments in favour of "password sharing". I have two close friends, married to one another, who for several years lived in different cities due to work; should they have required two separate Netflix accounts? If I had college-aged kids who remained financially dependent on me while in school, should I need to pay extra for them to access my Netflix account just because they decide to live in a dorm instead of at home? What about a house that serves as a home to multiple (related) families... how many Netflix accounts do they need at that same address?

Of course, these arguably legitimate cases aren't the primary problem Netflix is trying to address.

Netflix wants me to either stop sharing my Netflix password with my friends so they need their own paid subscriptions... or pay a surcharge for allowing them to access my account. Both options would result in higher revenue for Netflix. And why shouldn't Netflix, as a business that relies on subscriber revenue to survive, not take measures to protect its financial viability by cracking down on password sharing?

Because they said they wouldn't.


Six years ago today, Netflix tweeted "Love is sharing a password" from its official Twitter account.

Tweets don't constitute official policies, but those five words were a tacit acknowledgement the company knew password-sharing was happening... and an implicit acceptance of the practice.

In its early days, letting people "share" their Netflix was good for the company: sharing your password with your friends meant they experienced Netflix content for themselves, an easy way for Netflix to advertise all they had to offer in the hopes that incremental subscriptions would eventually result. As long as Netflix subscriber figures continued to grow and Wall Street was happy with the company's financial results, password-sharing wasn't a concern for the streaming giant.

But it became a concern when subscriber growth slowed. And when you already have hundreds of millions of subscribers and you need more, the low-hanging fruit is "people who already enjoy your services but aren't paying you any money for them".

It all makes sense, right?

Except... that tweet. That tweet was an implied promise you wouldn't be penalized for sharing your Netflix password. And now the company was breaking that promise.

That's why people are upset: people don't like broken promises.

A Simple Definition of Brand

When I teach, the simple definition of "brand" I share with my students comes from Muhtar Kent, the former Chairman and CEO of The Coca-Cola Company. He said, quite elegantly, "A brand is a promise. A great brand is a promise kept."

Tide promises clean clothes.

Disney promises magical experiences.

Apple promises technology that looks good and is easy to use.

Each of those promises was made a long time ago, and we know of them today because each of these companies was able to consistently deliver upon their promises over time.

But now that we know and understand these promises, they make choosing these brands over their competition easier.

Which is ultimately the point of having a brand in the first place.

A "Bad" Cup of Coffee

Think of your favourite brand... why do you prefer it to all the alternatives available?

It's likely because you experienced it at some point, were satisfied by its performance relative to your expectations, and then the brand continued to deliver on its promise to you throughout subsequent occasions.

If you walk into an unknown coffee shop for the first time, order a coffee, and don't like the taste, you might not go back to that shop. You had an admittedly subjective expectation as to what "good coffee" tastes like, and that coffee shop failed to deliver upon it.

Conversely, if you had a sip of that coffee and thought it was the best cup of coffee you had ever tasted, it's more likely you'd be back to that coffee shop the next time you were in the neighbourhood. And if that next coffee also met your heightened expectations, the coffee shop's promise to you would be strengthened: "We offer the best-tasting coffee."

That's certainly not to say you can't change your mind. You might forgive that coffee shop for serving you a "bad" cup of coffee on your next visit, especially if you pointed out your displeasure to the barista and they proceeded to make you another cup that tasted better. But several bad cups in a row? That would change how you think about the coffee shop's promise to you, which in your mind, would go from "We offer the best-tasting coffee" to "we sell coffee", which is definitely less compelling on a relative basis.

That "in your mind" part is important. Brands might like to think that they get to decide their promise, but that's only partly true.

Brands get to articulate their promise, both with their words and through their actions.

But consumers get to decide what, if anything, that promise means to them.

Promises Made, Promises Broken

Brand building involves consistent communication over time. If you craft a clear message and repeat it often enough, your audience may eventually take notice. Then, they may accept it. And when they do, they'll come to expect it from you. Your message, if repeated often enough and consistently backed up by performance, becomes a promise.

Here's the terrible irony of brand-building: it takes a very long time to have your brand associated with a given promise and a very short time to have that promise forgotten.

Your parents may have used Tide to get your clothes clean for your entire childhood and, as a result, "Tide means clean" might be what you see as the brand's promise to you. But the first time you use Tide and it isn't able to get that stain out of your favourite shirt, those decades of brand-building evaporate. It doesn't matter that Tide has never communicated "We guarantee that we'll always get every stain out of your clothing, every time" or that such a guarantee would be impossible for any brand to credibly make.

If Tide isn't able to get that stain out of your favourite shirt, in that instance, the brand would have broken its promise to you. And broken promises aren't easily forgotten.

Or forgiven, for that matter.

When Brands Fail

Brands spend a lot of time, effort, and money to establish themselves in the minds of their consumers: to make credible promises and consistently keep them.

And brands fail when they aren't able or willing to deliver on those promises.

When a telecom company claiming "reliability" can't keep you connected to the Internet.

When a "fast food" company takes an unreasonable amount of time to prepare your food.

When a social media company you trusted with your data sells your information.

These are all examples of broken promises. And broken promises aren't good for business.

Mr. Kent said, "A brand is a promise. A great brand is a promise kept."

If you make a promise, keep it.

If you know you can't deliver on a promise, don't make it... or even imply it.

Because when it comes to broken promises, consumers aren't likely to forgive and forget.

I suspect Netflix is about to learn that lesson the hard way.


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