I’m not going to recount what Neflix did to get into this mess or how other companies avoided the DVD issue altogether through innovation.

I won’t lament about how they made it worse with a sadly backhanded apology or the Qwikster brand failure. And I don’t need to guess why Netflix screwed this up so royally- other have also speculated on the brilliant possibility of an Amazon- Netflix deal.

In fact, others smarter than me have written about all of these things already.

I’m just going to explain to you how a bit of social media finesse could have avoided the entire episode, if Netflix had been so inclined.

A look at the Netflix situation is a case study on what not to do – and from their mistakes, and other company’s successes, we can learn how to insulate our companies against a similar fate.

Community Around Netflix – Not Just Movies

People were passionate about Netflix – people are Still passionate about Netflix, just no longer in a positive way.

We customers were growing to love the experience and options Netflix was giving us, and those feelings were translating to its brand identity. Netflix had the technology to create the review systems, and partnered with Ning to create a film community.

Why not take those throngs of people and start having conversations with them?

Ask for community suggestions and let the community know when you implement them.

Communicate when there will be an outage on pages everyone views, such as the film queue. Or put a ticker across the top of the page when there are unexpected problems.

Hire customer service people to assist in on-site chats, and to write in the blog. And put them and other Netflix personnel from all parts of the company on Twitter, Google+ (under personal accounts of course), Facebook, Slideshare, YouTube – how was the video  apology the first and only YouTube video of a company centered around film?!

Please tell me I’m missing something and that a company that deals in moving images has another long standing YouTube account that I just couldn’t find.

Open Dialog and Transparency

Okay, let’s say Netflix was able to put together a social media strategy, and execute it well on multiple channels – (as well as using it internally, and tying it to CRM, oft-forgotten steps).

Stopping there is just asking for trouble if you don’t tell your public what is going on within the company, when those changes may directly affect the products you’ve sold them and the expectations you set for them. Why ask people to come to the table for dinner, if there isn’t going to be any food?

For example, remember when the first round of really vocal dissatisfaction started, back when Netflix lost the ability to stream The Social Network, even though it was on Starz?

If they’d had a better relationship with their customers, and informed them each step of the way the issues that were coming up, the users still might have been angry.

But it’s possible that instead of directing that anger at Netflix, it might have been directed at Starz, Sony, even the film industry. It’s even possible that Netflix could have spearheaded a public, vocal movement to make more films accessible to more people.

Which technically?

It already did. It’s part of the Netflix story that they helped push legal online streaming ahead in a way that film companies did not see as a threat. But it wasn’t public, vocal, or connected to a community. Could the Starz-Netflix deal gone differently had there been pressure for Starz to stay at the negotiating table? Possibly. Especially if it came from actual customers who intended to walk should talks crumble.

Speaking of the benefits of having a relationship with your customers that goes beyond sales and customer service: that goes to the heart of why the “apology” resulted in such strong reactions – seen particularly in the Facebook comments at the end of the blog post.

This act of contrition was almost universally deemed a failure in the press and it’s not just because it was too little, too late.

Never mind the fact that the apology didn’t feel like one to a great deal of the audience. This apology violated the first law of apologies – successful apologies take place in the context of successful relationships.

Making 11th hour regrets by saying “I’m sorry that you don’t like what we did” not only missed the point of apologizing in the first place, it misses the aforementioned concept to expressing regret that is so basic and central to making “I’m sorry” work, that, most people – and companies- are blind to it.

Had Netflix cultivated and nurtured the long-standing loyalty and perseverance of its most dedicated fans, even if it had still come down to an apology, their audience would have stuck by them with devotion rivaling that of the Apple brand fans.

Successful social media channels give you the opportunity to have that authentic connection in place before you screw up, and the goodwill in the relationship bank for the overdraft protection you’ll eventually need to keep it from feeling hollow.

The Love, Care, and Feeding of Your Evangelists

With a little advance notice even just to various film bloggers with varying sizes of audiences, they could have used the blogosphere and social media to tell their side of the story in the Starz negotiations.

Maybe even without Netflix needing to directing the conversation. They could have just said, “this is what we think is about to happen. Here’s why we want to prevent that. What do you think?”  With minimal prompting, I’m willing to bet that the community would have done one of two things.

The bloggers, and/or the audience that reads them. would have made a public appeal to Starz about why they should come to the table, possibly even threatening a boycott or buycott if Starz didn’t agree.

Or, worst case scenario, if Starz still didn’t agree to continuing the contract, the public would have heard and understood that Netflix did all they could, and sided with them in the agreement. There might even have been a mass exodus from Starz instead of Neflix. If you don’t believe me, just read some blog posts that oppose stunts Apple and pulled, and read the comments from the Apple fans. I’m an Apple fan, I disclose, though I don’t go as far as to defend their mistakes, I am the exception.

Much better than a mass exodus and negative public outcry, yes?

So what’s the lesson in all of this?

Use social media tools, community, PR, even search and marketing, together in one systemic plan to not only guard against issues that may come up when your company is hot water.  But to please your customer so much that you don’t get into trouble in the first place even if you screw up and are clearly in the wrong.

People can be understanding, or even excuse your mis-steps, if they feel trust that your company has open lines of communication, and does what they do with the intention of serving their customers through improving their products. Work with your client base to find out what they want, how to deliver it to them, even to crowdsource ideas of how to overcome problems, and come up with new services.

From the Sony deal forward, Netflix could have dodged this bullet completely, just with better PR, community and better incorporation of social media tools.


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