How Netflix Could Have Avoided Social Media Disaster

Yesterday Netflix announced new plans and price changes for its DVD and video-streaming subscription services. And with it came a barrage of comments and complaints from the social web. Netflix received at least 4,300 comments on their blog, over 40,000 Facebook comments of which thousands of new fans joined the page just to express their outrage.

Although Netflix has been an enviable consumer brand and appears to have some formidable Social Media savvy (they have a fanpage of over 1.5 million members and a Twitter following of over 80,000) it is more than a little head-scratching (some might say mind-boggling) to witness how they handled this latest announcement. Although Wall Street was initially impressed (+7.46 at the Wednesday Close), the lack of apparent preparation for this announcement along with an appalling response to the barrage leaves you wondering if this will leave an indelible mark. There are numerous examples indicating just how unprepared Netflix was in every phase of this event – planning, testing, communicating, and responding.

First off, they didn’t leverage the social web to pilot their new plan and pricing ideas. With so many fans, followers, and customers, Netflix could have easily sourced a group of passionate individuals to give feedback and contribute ideas on how to approach changing plans and pricing.

Second, in its e-mail announcement to all customers, Netflix didn’t offer up a venue for customers to give feedback and didn’t link to their blog post that better explains the changes. This could have been an initial “line of defense” in managing negative feedback from customers. They also did a horrible job in explaining why the pricing was going to change. Had they gone to their advocates in the testing phase, they would likely have received that feedback.

Third, and maybe most importantly, they’ve gone silent, which is one of the biggest mistakes a company can make in managing a Social Media program. At the time of this post neither their Twitter account nor their Facebook fanpage, nor the Netflix blog has been updated by the company in over 24 hours. Not even a “we hear you and we’re working on it” post. According to a few replies to their July 12th blog post, Netflix even temporarily disabled the comments feature, but then turned it back on. Preventing customers from voicing their opinion on your digital properties certainly won’t stop them from voicing them elsewhere and actually gives them something else to add to their list of complaints.

Fourth, from an internal standpoint, we can only assume what Netflix is experiencing right now:

Overloaded call centers and customer support channels
Gathering various teams who are trying to formulate a public response to this event
Working on coming up with an alternative solution to this business problem, that could be more pleasing to their customers

With a social media listening tool and dashboard, Netflix could have received early warnings of the first comments via the social web and taken action right away – responding to individuals, listening to their concerns, reporting those concerns back to marketing and product, and in effect reducing the scale of this public crisis; and perhaps even converting some angry customers into satisfied ones along the way. This surely could have helped to relieve pressure from their customer support channels.

With an internal social collaboration tool (Chatter, Jive, Yammer, etc), Netflix would have the potential to quickly crowd source ideas for a public response, find subject matter experts who could contribute, and activate teams to get a response out the door. They could apply the same approach to finding an alternate solution to this business problem. As it stands right now, there’s no public response from Netflix and no published alternative.

It would seem easy to criticize Netflix with the benefit of hindsight. However, this lesson has been learned enough times by now by enough prominent companies to honestly say that the steps listed above are the bare minimum for any Social Media foundation.

So in the spirit of constructive criticism, and the words of Rahm Emmanuel (“Never let a crisis go to waste”), here are a few things (regarding social) that Netflix could do going forward to help manage this crisis.

Listen and monitor

Using a social media monitoring tool like Radian6 Netflix can help to identify a target audience to respond to. Not all the people voicing their opinion are their ideal customers. For example, if some of the people sharing complaints via Twitter just want videos for free, then Netflix could filter them out of their audience. Netflix could never offer up their services for free and still be in business, so it’s best to spend their time elsewhere (e.g. long-term customers who are actually proposing solutions to the problem)
These same tools can also help to pinpoint the main problem – which customers are experiencing the most pain. Customers who will opt just for the streaming plan actually have a reduction in price based on the new plan – from $9.99 (DVD plus streaming) to $7.99 (just streaming). But the customers that want to continue to use both services that are feeling the pain with this change.

Post a response – for goodness’ sake!

Don’t wait a moment longer – get something out there on the channels. Even if it’s just a “we hear what we’re saying and we’re working on it” post as mentioned above. CBS News was able to produce a whole story on alternatives to Netflix, complete with a custom “guy with an axe and Netflix DVD” photo. If they can get something out the door, Netflix ought to be able to as well.

Provide a great and personalized experience, and make it transparent

Leverage a Social CRM program – segment customers to uncover trends, respond to individual customers, and energize your biggest fans and advocates to spread word on what they think is great.

Get an internal collaboration tool

Internal collaboration tools can facilitate information and idea exchanges, expose conversations to subject matter experts that may not have otherwise been included, provide rich context to a conversation, and allow for asynchronous work to happen virtually. With all of these benefits, decisions can be made more rapidly, ideas can be shared more freely, and solutions that involve several parties can be derived more easily.

What would you recommend for Netflix?

Cyndi Zaino (17 Posts)

Cyndi is a senior consultant specializing in Cloud Sherpas' Social Enterprise division. She has worked on a variety of online interactive, social media and technology and community-based projects with several major publishers, consumer brands, global financial services firms and smaller service-based businesses.