Some marketers considered Facebook FREE because there were no advertising costs associated with it. I wrote this blog post to help dispute that myth. Today, marketers need to consider allotting a percentage of their advertising budget to justify the time and money they are spending on their Facebook page trying to generate engagement. Thanks for the discussion point!

Having been in the research stage about movie rental industry, I found this topic of interest regarding brand loyalty. Brand loyalty is a fickle thing with most consumers, but never more than in a recession like this one.

I doubt NetFlix expected over 800,000 subscribers would be lost with the price increase, but price is where brand loyalty ends in a down economy like this. Remember, BlockBuster rulled for years with no competition, then NetFlix came onto scene, and again, low price wins, they started to chip away at BlockBuster, and with a low overhead direct mail strategy, they took tons of customers away, so where is brand loyalty?

The same exact thing happened when RedBox came to market a few years ago, it put the final nail in the coffin for BlockBuster when they put RedBox Kiosks wherever a BlockBuster store was located, and this too was very good strategy, sort of like with the fast food industry, you always see them all located in same area.

The point is, brand loyalty means little in this industry, as with many industries when the economy collapses. Everyone is concerned with one thing these days, lowest prices, period, and loyalty is out the window with most. Consumers are focused on lowest prices for equal products or services, just look at the wireless industry, no loyalty, people will jump to lowest prices at a drop of the hat.

This conclusion is obvious if you research it over the long term. Like with the auto industry, most children growing up attached themselves to the same brand cars their parents bought. Today, brand loyalty is dying in the auto industry. When it comes to renting movies, why would you pay more than the competition, just as Hyundi had gotten a hold on auto industry with lower prices and better warranty, this again proves low prices win.

We all know a movie is a movie, all the same, no difference, other than how you acquire the movies. Retail stores like BlockBuster was first strategy, and a very expensive one in comparison to NetFlix by mail strategy. Then you had RedBox Kiosk strategy, and they became huge success, amazingly so, but with higher gas prices, there is even more pressure on this strategy as people weigh the cost of returning movie on time the next day making a special trip and wasting gas, or paying the late fees. You see, it always comes down to price, not brand loyalty.

The perfect example is this, BlockBuster and NetFlix are $8.00 to $10.00 a month, so if Free-FlixsNow, the newbie in direct to home movie industry comes in at only $2.08 per month, what do you think will happen? I have been researching this with my client base, and everyone says they would use the lower price alternative given the same movies are offered, and to sweeten the deal, they are available 28 days sooner than the competition. If NetFlix lost over 800,000 subscribers over price, I would think these same cost sensitive customers would jump on Free-FlixsNow at a drop of the hat. And when you look at RedBox also raising prices, if you were looking at RedBox and BlueBox Kiosks at same locations, and BlueBox was less money, and had the same movies, which machine would you use, RedBox or BlueBox which has no brand loyalty?

Just my opinion, but having been in the original independent movie rental retail business, BlockBuster killed off independents based on lower prices, and in time, many more locations, and as I see it, the same is happening again and why I got back into industry, I see the trends repeating all over again, low prices wins every time, more now than ever.
Free-FlixsNow.com