When Users Rebel
23andMe is a well-known consumer genetic testing company based out of Mountain View, California.
The Situation
Awareness surrounding the consumer genetic testing market reached new heights in 2007 through the exposure of company’s like DeCode Genetics, Knome, and Navigenics. As the number of companies in this space grew, so too did public interest in the consumer genetic testing (CG) business. Yet, despite this rise in CG testing, many companies continued to struggle with defining a sustainable business model; a problem that only persisted following the FDA’s probe into several CG service companies.
With those looming threats in mind, in November 2010, service provider 23andMe opted to move their Personal Genome Service (PGS) offerings from a flat service fee business model to a subscription-based one. From a business perspective, some experts viewed this change as a smart one on the part of the company. In theory, it would offer 23andMe more stability with a steadier revenue stream, and by proxy, the capacity to avoid those financial pitfalls, which tended to gut other CG testing companies. Following this new model’s introduction, most customers were generally accepting of the change. Others who initially disapproved came to begrudgingly accept it since they assumed its implementation would not have a severe impact on their use of 23andMe’s PGS. Those assumptions would later come back to haunt them, however, after a series of miscommunications between 23andMe and their user would go on to become a key source of controversy in early 2012.
The Move
Near the end of December 2011, 23andMe updated its FAQ page to include clarifications on the conditions of its subscription policy. As these details explained, for either those PGS members whose original yearlong membership had expired or those users who opted to cancel their subscription, they would:
“No longer have… access to [the] hundreds of comprehensive reports that interpret your genetic data, continual updates to those reports based on the latest research discoveries, [the] ability to share and compare results with friends and family, and tools to discover new relatives and learn about your ancestry.”
The policy clarification goes on to explain that users will still able to download their genetic data after canceling the subscription. The site FAQ reads as follows:
“Canceling your subscription means you no longer have access to features that rely on your genetic data. [It] has no effect on features that do not rely on your genetic data, such as user-to-user messaging, 23andMe Community, Family Health History, Research Surveys or Research Snippets.”
At first, the company made no announcement that this clarification had been implemented, leaving many customers to discover it for themselves through word of mouth. More importantly, it was only mentioned on the FAQ page, but not within the company’s Terms of Service. As word spread, so too did dissatisfaction over the matter. According to certain 23andMe users, this clarification directly flew in contradiction to what they had been told in the past by company representatives. One such example of these contradicting stories can be found on the “Your Genetic Genealogist Blog.” It is worth noting that the site also appears to be the first source to note the change before 23andMe’s official statement was released a few weeks later in the New Year.
The Result
As news of the policy clarification reached the public in late December, some of 23andMe’s most committed community members – from genealogists to everyday subscribers – banded together in their disapproval over the company’s decision. From their perspective, 23andMe was retreating on its previous promises made in 2010.
Initially, this frustration went through a brief gestation period, during which the public first learned of the clarification and voiced their outrage in return. An official statement from the company on the matter would not be released until January 5th 2012 via its co-founder and CEO Anne Wojcicki, roughly 2 weeks after the changes were first noticed by customers.
The frustration levels even reached a point where many customers felt compelled to file an online petition requesting the company adhere to “its previous commitment to let customers who discontinue its Personal Genome Service (PGS) retain their existing Relative Finder matches as long as the customers fulfilled their PGS commitment.” The goal of the petition was to garner 500 or more signatures from service users; however, they never had the chance to see the matter go that far. The petition closed with only 345 signatures, shortly after Wojcicki took to the company’s online blog, The Spittoon, within days of posting their January 5th letter to customers. In this updated address, the company directly tackled the source of their customer’s frustrations by offering solutions both parties could find agreeable. Examples of updates included:
“No changes will be made to any accounts until July 31, 2012. If your subscription is set to expire before then, you will continue to receive updates and will not be charged for the additional time. For those who have continued commitments, those will continue. After July 31, 2012, if your account has met it’s commitments, you will have the option of subscribing, buying a Lifetime subscription or canceling your subscription;”
and
“If you choose to cancel, you will be able to download your Raw Data but will not be able to use the Browse Raw Data feature.”
To read the full list of updates from 23andMe, click here.
Our Perspective
We have often espoused to the notion that a brand’s traits and values are only real when the consumer believes in them. Typically, one hears this idea stated thusly, “A brand is not what you say it is; it is what they say it is.” In other words, consumers dictate what a brand stands for, not the company. Using the case study of 23andMe’s recent, albeit brief fallout with customers, we see a clear example of just how critical a role that notion plays in a brand’s success. More importantly, it says a great deal about how a company can overcome its mistakes, retain the approval of its consumers and still press forward in achieving of its primary goals.
One cannot deny the merit either parties’ arguments. On one hand, you have a group of consumers (genealogists mostly) who feel they were deceived by 23andMe. Couple this sentiment with the fact that 23andMe did not make an official statement until two weeks later, and it only adds fuel to their fire. On the other, you have a company that is desperately struggling to make a profit for the first time since its inception.With a current subscriber base of approximately 125,000, there is still plenty of market potential yet untapped. Naturally, attracting new users requires a more attractive service, but as it stands the company cannot be expected to continue at this pace, constantly reducing prices without a steady revenue stream to stabilize their business and finally generate a profit. Throughout these ongoing efforts to develop a sustainable business model, it is to be expected that some procedural shuffling will take place.
Regardless of the direction 23andMe chooses to take their business in the near future, and in spite of the methods it implements to move one step closer to those goals, communicating the policy changes to their users sooner – preferably immediately – would have gone much farther in allowing their brand to save face with the public as opposed to quietly making the change and leaving it for users to spot on their own. Keep this in mind: For a company that performs little to no marketing activities, 23andMe has garnered mostly positive feedback from their users while simultaneously building a lot of awareness around their brand. Due to the absence of such activities, it stands to reason that word of mouth marketing must have truly helped make the company as publicly recognized as it is today. Therefore, when mistakes such as this recent PR snafu takes place, one cannot help but jump to the conclusion that the presence of a dedicated marketing team might have gone a long way toward preventing the situation altogether. That being said, recent news suggests that the company is finally moving in that exact direction. According to a Business Insider article, 23andMe is in the process of building a dedicated marketing team, which is exciting news indeed.
For a short while, it looked as though 23andMe was putting its brand reputation in jeopardy. But thanks to their handling of the situation with calm and poise, the company emerged from the situation relatively unscathed. Now with a dedicated marketing team on the way, it appears that 23andMe has not only learned from its mistake, but plans to finally latch onto that accrued positive brand awareness and start reinforcing those traits with both new and prospective customers.
Timeline
- April 2006 – 23andMe founded by Anne Wojcicki and Linda Avey
- Nov. 2007 – 23andMe begins offering services directly to consumers with sequencing kits that start as high as $1000.
- Nov. 2010 – 23andMe introduces a new subscription based business model
- June 2011 – 23andMe surpasses 100,000 users
- Dec. 2011 – 23andMe clarifies service policies on FAQ page; users grow upset with the change; start online petition requesting that 23andMe rescinds its changes.
- Jan. 5th 2012 – Anne Wojcicki releases a letter on 23andMe’s blog explaining the policy change and the company’s attempt to address the problem
- Jan. 8th 2012 –23andMe announces their plan to address recent user complaints over policy clarification
- Feb. 2012 – 23andMe surpasses 125,000 users; kickstarts marketing team development
