Famous Last Words : The Customers Are in Revolt!

In 1995, I wrote "Method Marketing." The premise: To be a successful direct marketer, you must get inside the head and under the skin of your prospects and customers. You have to think like they think, feel what they feel and literally become the person.

In the fall of 2011, if the marketing powers-that-were at Bank of America and Netflix had practiced the Method Marketing concept, they would not have wound up eating large helpings of crow.

The Banks Step in It
In 2009, if you charged a $2 cup of coffee at Starbucks to your debit card and didn't have enough money in your checking account to cover it, you would be hit with an automatic overdraft fee of $35. That year, America's banks raked in $20 billion in overdraft fees, debit card purchases and ATM transactions, plus an additional $12 billion in fees on kited checks.

In 2010, when the Federal Reserve decreed that banks could charge overdraft fees only if customers opted-in to the program, Bank of America announced it would drop such charges on debit card purchases, hoping to spit polish its reputation during a financial crisis.

Then, once feeling a financial pinch from the loss of overdraft fees, Bank of America announced on Sept. 29, 2011, that it was imposing a $5-a-month fee on all debit cards. Customer backlash was swift and devastating. After the announcement, 650,000 customers moved $4.5 billion into credit unions. One depositor collected 200,000 signatures urging the bank to change its policy.

On Nov. 1, Bank of America—tail between its legs—rescinded the monthly charge.

The Netflix Catastrophe
Peggy and I subscribe to the Netflix DVDs-by-mail service. We always have two movies in the works with no late fees and dazzling speed from the Post Office. Unlike some other Netflix customers, we are low-tech folks and do not understand the streaming video service; DVDs are OK with us.

In July, Netflix decreed that it was no longer honoring its very popular combo program of streaming video and DVDs. The two programs were to be split and would cost $7.99 each or $15.98 for both—a 62.5 percent price increase from the original price of $9.99.

Netflix customers felt betrayed and went berserk. As Jason Gilbert wrote in "'How Could Netflix Do This To Me?': Netflix Users Lash Out" in The Huffington Post:

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