Kiwiblog links to an interesting story about Vodaphone Vodafone (fixed for my illiteracy). In the story Vodafone begun charging for sending out paper statements after setting up a text statement service. Sure enough customers were unhappy – so they reversed the decision and now are not charging for the statements again.
What was important for me wasn’t what they are doing – but how they are doing it. They termed the change their mistake and that they were now listening to what their customers told them. Whoever decided to make this u-turn obviously knows what happened with New Coke.
In the case of New Coke, the Coke company replaced Coke with a new receipe – but some deeply loyal customers were hurt. When Coke turned around and stated that it made a mistake and changed the formula back they experienced an increase in market share (beyond initial levels) – and customers said they felt “flattered” that Coke actually listened to them.
Who knows, Vodafone might experience the same thing here! It just goes to show, building a differentiated brand both lets the company extract rents and allows customers the “value” associated with having a role in the brand. Sounds good to me!