Netflix, consumer surplus, and brand loyalty
www.bengaines.com 12 July 2011
Having lived through the occasional PR disaster in my previous life as a Community Manager at Omniture, I sympathized with the people responsible for managing social media for Netflix following the company’s rate hike for those who receive DVDs by mail. Today cannot have been a fun day.
It led me to think about the relationship between consumer surplus and brand perception. I’m not an economist, but one of my favorite principles of economics is the study of the difference between the value from a product or service and the actual price that customers pay for it.