Name the movie that gave us that line. If you said Poltergeist II: The Other Side, you're correct. It's a haunting tale, and it floated into my mind a few days ago when the news broke that MoviePass is attempting a sequel of its own.
I last wrote about the popular but controversial ticketing service in July 2018, when it announced that it had literally run out of money. Conventional wisdom said the beleaguered company probably wouldn't make a comeback.
Enter Ted Farnsworth, CEO of MoviePass's parent company, Helios and Matheson. According to him, conventional wisdom got it wrong. He claims that signups have surged more than 800 percent, and that MoviePass has ironed out the problems that plagued it the last time around.
The gist of those problems, Farnsworth says, is that about 20 percent of MoviePass's customers were actively ripping it off. They would purchase its unlimited plan--which allowed one subscriber to see one movie a day in theaters for just 10 bucks a month--and then share it with family and friends at MoviePass's expense.
I'm not here to say that Farnsworth is right or wrong. I don't have an insider's view into MoviePass like he does. I can, however, glean a few nuggets of wisdom from the company's apparent resurgence:
1. Fire bad customers.
The customer isn't always always right. I learned this the hard way as a young entrepreneur in Idaho. I'd started a sign repair and manufacturing business, and was delighted when a big contract came my way: A restaurant franchise owner wanted me to service five or six of his Taco Times from the ground up.
I finished one location--lots of work, manpower, and materials--and the guy dragged his feet on payment. I was cash-starved constantly, and I begged him to make good on his promises. He always found an excuse to stiff me.
Then, lightning struck. I still remember where I was: Alabama, of all places; and I was reading an article in Inc., of all magazines. It basically said that bad customers are an emotional, physical, and financial drain. That you should prune them as quickly as you can.
I followed this advice, and the dynamic changed overnight. Suddenly, my deliquent client was doing all the begging. I refused to help him until he agreed to pay 100 percent upfront, which he grudgingly did.
Don't let anyone take advantage of you. Identify toxic customers and show them the door.
2. Trouble on the horizon? Be proactive.
Farnsworth says that MoviePass is smarter than it was last year, and that technology will help it fight customer fraud moving forward. I find it hard to believe that the company didn't anticipate the potential for gaming the system from the very beginning.
It strains credulity even more that the company took so long to see what was happening. The abuse was severe and systematic; customers were buying tickets to expensive New York City movie theaters just to use the restrooms.
I wouldn't be surprised if MoviePass anticipated fraud and saw it happening--the data should have been obvious--but reasoned that the 80 percent of users who were honest would float them until they could get a handle on it. But handling it should have been the main focus. The idea had gone viral; acquiring customers was never going to be an issue. The issue was the parasites, plain and simple.
When something's directly in front of you, don't put it off. Address it, solve it, now.
3. Acquire multiple sources of credit.
Farnsworth blames some of the company's embarrassment on its "credit card company," according to TechCrunch. "When one company sold to the other, we had been doing business with them for four years," Farnsworth said. "They decided it was too much credit for them and [I had to] literally call the credit line on a Friday night and ... do a personal guarantee on a Saturday."
My own company, Nav, conducted a 2018 Business Banking Survey--which revealed that 60 percent of small businesses who considered closing up shop did so because of cash-flow difficulties. Nip this in the bud by expanding your credit options.
Always have a source of capital waiting in the wings. If you currently use just one business credit card, make sure you have another couple in reserve. That way, should your financial institution decide that they're suddenly out of the credit card business--which actually happens--you won't go down in flames.
Too much reliance on credit, of course, can be dangerous. Keep your balance low and turn to credit cards only when you really need them.
The Godfather: Part II. Terminator 2: Judgment Day. The Empire Strikes Back. Cinematic history tells us that--every once in awhile--a sequel can improve on its predecessor. I'll be watching to see if MoviePass joins their rarefied ranks.