Netflix….Hello? McFly?

Oy. Where do I even start with this PR debacle? For those of you living under a PR rock, the online DVD rental/streaming movie service Netflix has been stumbling and bumbling their way through a series messy PR blunders that stretch over the course of the past year. You remember Netflix right? They’re the company that arguably put Blockbuster and other movie retailers’ bricks and mortar businesses in a coffin, single handedly revolutionizing the DVD/movie streaming market with their service.

Seemingly overnight they changed the way we consumed movies with their near genius marketing strategies and business model leaving many people (*ahem* Blockbuster) twisting in the wind and kicking themselves that they didn’t have the foresight to see the paradigm shift in home movie delivery. But their communications strategy? Uh, hello – McFly?

The PR gaffes began in September 2010 when Netflix launched their service in Canada and hired actors to pose as customers, gushing about the service even going as far as to conduct media interviews to extol the virtues. In the wake of a clear breach of ethics, they apologized and we forgave them for their transparency ignorance. A slap on the wrist.

Then, in July of this year Netflix suddenly announced that prices of DVD and online movies were going up by 60%. Although it can be argued that a lot of folks were dismayed at the sudden price increase, I don’t think that in and of itself customers were as upset about this as they were with Netflix’s lack of response when thousands took to the social media airwaves to express their negativity about the sudden increase and the fact that most people heard about the increase through the media rather than Netflix themselves. Oh, but that’s right. Netflix did let us know about the price increase. Through an email. In the middle of the night.

Fast forward to September when Netflix suddenly decided to split their DVD rental business and online movie streaming service choosing the name “Qwikster” for the DVD side. One small problem. The name was already taken on social networks, most notably on Twitter by a guy who shall we say, has less than stellar social skills and taste in recreational activities. Hmmm, I guess I missed the field research to see how customers would react to splitting their service or the crowd sourcing campaign contest asking Netflix customers to chime in with their thoughts on what a good name would be for their DVD business.

There are so many lessons to be learned from Netflix’s dastardly communications strategy. I don’t have enough room to list all of them if I wrote a post every day for the next month, so let’s stick to the basics:

  1. Listening – I know, I know, PR people like to talk. A lot. But at the heart of any successful PR campaign is the ability to close your mouth, open your eyes and ears and listen to your community. I can remember waaay back when in 2007 reading a post by Chris Brogan about the power of listening in social media when we were on the forefront of the social media explosion and thinking, “well that seems pretty easy.” For Netflix? Not so much. There are plenty of free tools out there to help you listen, so take advantage of them. It may just put the kibosh on a new initiative that you thought was the best thing to hit the market since string cheese.
  2. Engaging – There is a reason that a community exists. They are your real time focus group. They can be evangelists to buoy your messages, or critics to initiate product or service changes and modifications. The one thing about communities though is that they need cultivation. Fertilize them by actively engaging for advice, feedback, suggestions and ideas. Stick your head in as often as possible and show people you care. It’s ok to make mistakes, just make sure you fail forward and learn from them. And for Pete’s sake, don’t plead ignorance when things go awry. No one will buy it.
  3. Measuring – When I talk about measuring, I don’t necessarily mean it in the exact context of a wise post by Rebecca Denison reminding us that analytics are the bread and butter of a successful PR campaign. I am talking more about taking stock of your past communication campaigns from a sentiment perspective and learning what works and what doesn’t based on community and media reactions. In other words, taking an estimate of what is to be expected based on what you’ve already done. Few members of your community expect perfection. What they do expect is for you to learn from your mistakes. And not repeat them.

Do you suppose it’s any coincidence that Netflix stock has plummeted from a high of $298.73 on July 13th to a low of $111 as of market close on October the 10th?

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  • Sara

    John,

    I agree with everything you mentioned in your post. Netflix really got themselves in this time. I wonder how many more blunders it is going to take for them to come back up from their rock bottom. For Netflix’s sake, hopefully not anymore. Additionally, for one of my college courses focused on social media, my teacher actually had us read an article regarding Netflix and all of their issues. It is very interesting to me that one company can mess up so many times in such a small time slot.

  • http://twitter.com/John_Trader1 John Trader

    Thanks for the comments Sara. So, Netflix has already become a college course case study on how to royally screw up a communications plan and drive consumer sentiment into the ground. Gee, that didn’t take long. 

    My thoughts can only go to the folks running the show…I mean, at what point do you step back and say, “Hey wait, let’s learn from our mistakes and get this ship steered in the right direction.” Instead, they successfully botched their image, distanced their community and shot themselves in the foot. Repeatedly.

  • Jordan728

    Great post John. I’m interested to see if the crisis with Netflix will have any effect on its competition with other movie rental organizations, such as Redbox or iTunes. In my opinion, Netflix still has the best service and is at the forefront of movie rental organizations, but with its current situation, it seems like they’re on shaky ground. Other rental services may now be able to step in and gain the customers Netflix has lost. 

  • http://spinsucks.com Gini Dietrich

    And now they’ve decided not to split the companies, after all. Hello McFly is right!