I hate to get on a bandwagon, but this one’s just too much to pass up. The past few months have seen a flurry of activity at Netflix. Just to catch you up (if you’ve been under a marketing rock), here are a few highlights…
First, talks broke down with their largest content supplier. Then they jacked up prices by as much as 60% – without any significant change in service (except, well, that loss of content). Next up was a 1990’s ATT-like breakup – one company was going to handle your streaming, one was going to handle your DVD delivery – resulting in two accounts to manage for the typical customer. The new name for the company that was going to handle the streaming service? Qwikster – a Twitter handle that was already occupied with a picture of a pot-smoking Elmo. Now, they have decided to drop all those plans, and Netflix will continue to do both things, sparing subscribers (myself included), from having to set up and manage (or cancel) two accounts.
When I read about a company going through these gyrations, and getting nailed time after time in the press (and subsequently their customers), I try and look at it as if it were one of my consulting clients. Where did they go wrong? What would we tell them?
1.) Testing is not just for tactics. As an agency, we are constantly telling our clients to measure all of the tactics we’re engaged in. From our perspective, it allows us to do a few things: Evaluate the whole strategy, fix any tactics that aren’t working, and direct us toward tactics similar to those that are working. But, from a strategy perspective, there’s a great way to test new strategies – take your ideas to the people! Facebook and Twitter aren’t just ways for companies to embarrass themselves – they are channels for companies to involve their customers in the process. When a company realizes that their customers are stakeholders too, they can involve them (even on a limited basis) with new ideas and new directions for the company – and I’m not talking about a mall intercept – involving them in the process is never easier than when you have almost 2 million “likes” on Facebook, as Netflix does. Engage a fraction of those 2 million people – get their feedback, involve them in the conversation, and you’re going to get strong direction on your customer sentiment.
2.) Plan ahead for everything – even if it means asking around. This one’s easy. Ignoring the advice from #1, you get your senior management team in a room. You choose a whole new direction for your company. You pick a name. You pat yourselves on the back. Someone says “Hey – let’s check that URL – whew…we got it.” Done. Well, except for Twitter. This had to have been hugely embarrassing for the senior management. It showed them as insular – in that they made these decisions without input or vetting from anyone who really thought about the digital space, and more importantly, why didn’t Reed Hastings (CEO of Netflix and…umm…board member of Facebook) think about it??? This is a company that has been leading the way in the digital sphere, helmed by a Silicon Valley force, and they forgot about Twitter? Have a plan. Get eyes from lots of disciplines to cross that plan to make sure you have everything covered. You will miss some things, but hopefully not Twitter.
3.) Announce wisely. If you ask some opinions, get good feedback, and cover your bases, announce your business changes to your customers – not to Wall Street and hope your customers hear about it. Every fumble, mea culpa, up and down through this process has been handled largely via press release – few if any of these changes have been received by customers before they were broadcast in the news. A few examples…as a customer, I got an email from Netflix days after they made the rate increase public; subsequently, I got an email Monday afternoon – hours after the story broke about the division not happening. They just posted their blog on their Facebook page. This was a golden opportunity to either build or fix relationships that have been damaged in this mess. They have all the tools possible to build community in the 21st century, and they consistently flouted them for the press release that was picked up, pored over, and trounced by news outlets, bloggers, and general pundits at large, leaving their customers going “huh?” or worse – “bye!”. Tell your customers first. Let the press find out later.
4.) If your title is “CEO”, you lose the right to complain on Facebook. Back in late September when this mess was beginning to really roll, Reed Hastings posted on his Facebook wall, “In Wyoming with 10 investors at a ranch/retreat. I think I might need a food taster. I can hardly blame them.” And your lunch is what you need a second opinion on? Want to guess what else your customers don’t want to know? That you’re at a retreat with a bunch of mad investors whom, the only thing most of us have in common with is that we’re all a little tired of the bad decisions (though, for two entirely different reasons). Put simply, as the CEO of a publicly traded company, maybe keep the brave face up, and don’t let us see how bad the reactivity of your organization has become by posting your weekend investor retreat woes.