Netflix Inc. (Nasdaq: NFLX) recently gave its Instant Play interface a complete makeover. Most users hate the change -- and have been quite vocal about it.
Some users have been even more frustrated, however, by Netflix's lack of public response, concern, or even acknowledgement regarding the issue. Other than an early, arrogant statement from a corporate communications officer insisting that Netflix knows what it’s doing and will not reverse itself, Netflix executives are keeping mum. Comments to Netflix's blog and Facebook Page remain unanswered. Tweets to Netflix employees have been ignored. One user calls Netflix's refusal to address the concerns head-on "a total slap in the face to… loyal customers."
Compare Redbox, a Netflix competitor that rents movies via vending machines instead of by mail or online viewing. Redbox has been facing its own brand crisis (albeit much smaller). Recently, Redbox decided to institute a modest rental price as a "localized test."
Numerous Redbox customers, upset about the change, have taken to Redbox's Facebook page to express their displeasure. Unlike Netflix, Redbox is showing that it is listening -- responding to the Facebook comments, explaining its actions to some degree, and directing customers to customer service.
This last step is very important. Social media should rarely be the be-all and end-all of serious customer concerns. Any customer communication that is, or has the potential to be, brand-damaging should be brought offline as soon as possible for the following reasons:
Privacy. It is bad form for a company to discuss personal transactions publicly, and compliance issues sometimes require companies to take these discussions offline. Besides, neither the customer nor the company benefits by airing their dirty laundry for all the world to see. If the company can satisfy the socially savvy customer offline, that customer will probably let his or her online audience know.
Improved customer response. Customers are likely to be less incendiary and more open to a resolution when speaking with a human voice on the phone. Indeed, they may feel partly appeased right away because the company has cared enough to pursue a two-way conversation with them.
Control. This is the most important reason to engage with upset customers and actively seek to bring the discussion offline. Social media are organic; companies can manage social media, but they cannot control them. They can, however, exercise some control over "regular" interactions, guiding their tone and direction.
Because Netflix has failed to engage its disgruntled customers, it is now paying the price. Not only are Netflix's disgruntled customers continuing to inflict damage on Netflix's brand across social media, but they have even sought to take the discussion offline on their own terms, telephoning individual Netflix executives and leaving them irate voicemails.
This is not even Netflix's most recent social media snafu. On June 13, Netflix Instant Play suffered an overnight outage. As users took to Twitter to vent their frustration, Netflix's response was de minimis (although a full site outage the following week receivedimproved Twitter attention from Netflix).
Unfortunately, this is par for the course with Netflix. For instance, Netflix does not respond to any posts on its Facebook page (not even one customer's recent cri de coeur: "What's going on with my account? I can't access my account information and it's been over a week of trying!").
Instead, Netflix makes amateurish status updates, often pleading, "Click the Like button if you've ever…" (translation: "I don't know the difference between 'Likes' and ROI; thankfully, neither does my boss"). Netflix is hardly more sophisticated on Twitter, actually retweeting itself earlier this month.
Social media are conversations (thus the "social"), not lecterns. Unfortunately, Netflix is too afraid of social media -- too afraid of what its customers have to say -- to truly engage with its audience. By refusing to so engage, Netflix has allowed the organic power of social media to work against it, not for it. Brands, after all, do not define themselves; audiences define brands.
Like its interface change or not, Netflix's disengagement from customers is not just bad social strategy, it is total brand failure.
— Joe Stanganelli is a writer, attorney, and communications consultant. He is also principal and founding attorney of Beacon Hill Law in Boston. Follow him on Twitter at @JoeStanganelli.
Usually, companies use social media networks such as Twitter, Facebook, or blogs to reach their customers, engage with them, give them an opportunity to better know the company, and interact with them in order to make their business better and also to satisfy their customers and prospects. The case of Netflix is very interesting because it shows how the company negatively handled its social networks. It really misused it by letting its customers down and leaving them waiting for a feedback or a response to their comments and complaints. By ignoring its customers' comments, Netflix was not only giving a bad image of itself and its bad management of corporate communication, but it was also showing its customers that they're not very important and that the company does not care. If Netflix was too afraid of social media and of what its customers might say, it is better not to use those kinds of social networks at all. I believe that social media helps companies in so many ways; however these companies need to be careful when it comes to using them properly and for a precise purpose.
Of course the comments are angry; Netflix has jacked up its rates by more than 60%.
Cutely enough, Netflix has couched the announcement of the rate hike in an announcement that it is offering DVD-only plans. They tried to make the announcement seem like it was, "Hey, look at this, we're offering more features and options for you, our loyal customers," neatly tucking away and hiding the information that the new options meant outrageous price increases.
Regardless of what you think about the rate hike, however, one thing is certain: Netflix is too afraid of its customers to openly and honestly engage with them.
Lot's of company's have adopted the Twitter-Facebook "customer service" model . . apparently as a way to distract customers in the hope they will start fighting amongst themselves and forget what they are complaining about.
Joe, I just went over to the NetFlix Facebook page and saw that its latest post, announcing rate changes, has attracted over 30,000 comments... and from what I'm seeing it appears they are all angry comments, and there aren't any replies from NetFlix. A classic example of how the company is using the social medium to broadcast out but isn't addressing user concerns. Basically the company's Facebook page is simply serving as a platform for showcasing negative comments and the company's clear lack of social skills. Pretty bad!
That's a classic example of companies knowing they need to be "2.0" but failing. The CxOs simply don't understand why they need to have online presence.
Joe, Most of the companies is using social medias for advertising their products and health discussion. From your blog, I understood that Redbox had taken the social media to the next level for customer satisfaction too. It’s a creative way of thinking. Addressing and forwarding complaints through social media networks to the customer care department can help them to improve the services.
Dead on. And to those thinkning that monopolies are invincible, over here in Canada there's this company called Bell, and they thought they were invincible as well. For a long time, they had a monopoly.
Then another big company called Rogers decided to take a piece of their pie by expanding their services.
Now Bell calls to try to bring people back claiming they've changed. Sure, Bell isn't dead and it's still powerful, but they lost a huge amount of business and now Rogers is the dominant player as far as I know.
Not to say that Rogers is perfect by any means (there's a common hashtag of #rogersfail) but the sad part is that as imperfect as they are, many people think Bell is worse.
If I were one of those major players, I'd think right now would be perfect to introduce my new services to these vocal (soon to be my new) customers with a free trial, using the same social media services Netflix is ignoring.
Chris, you're right -- that's how companies think, and you're right that customer service from other Web companies is terrible as well. Netflix isn't a free service, so I think it owes its subscribers more in the way of customer service than a company like Facebook does (this isn't to say that I think Facebook's complete disregard of customer concerns is OK because it's not!). Also, Netflix shouldn't really rest on laurels. It's not as if another competitor can't arise. Nevertheless, your points about why they don't care all seem on target to me.
Great points and great post all around, Joe. What you're describing is reminding me of JetBlue's reaction during the whole arrested-flight-attendant debacle. Companies really don't have an excuse anymore to not use their social presences properly. We've had plenty of "lessons learned" in this space.
What is it about the Web that makes companies think that rash, arrogant responses to customer inquiries are appropriate?
I agree...for example, I would be loathe to use such an interface to:
Manage my queue
Read reviews
Submit film commentaries
Those I would prefer using a more complex, web 2.0 - ish, desktop interface that emphasizes text input.
So, this points to the thought of asymmetry in the Reading and Writing experience.
For Reading (Watching, Viewing, Immersing) we tend towards big bright buttons, large clean text, and chunky stuff. For the Writing, Creating, Developing experience, we wants lots of little tiny clicky things, and controls, and windows.
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