Okay, so the Netflix debacle is definitely not a recent story fresh off the presses, but before you dismiss us as being behind the times, we’d like to invite you to read a quote from a communication Netflix produced for its shareholders (focus on the very last sentence):
“$7.99 for unlimited streaming and $7.99 for unlimited DVD are both very aggressive low prices, relative to competition and to the value of the services, and they are the right place for Netflix to be in the long term. What we misjudged was how quickly to move there. We compounded the problem with our lack of explanation about the rising cost of the expansion of streaming content, and steady DVD costs, so that … many perceived us as greedy. Finally, we announced and then retracted a separate brand for DVD. While this branding incident further dented our reputation, and caused a temporary cancellation surge, compared to our price change, its impact was relatively minor.”
-“Netflix Loses 80,000 Customers in Quarter” mashable.com
Taking a look back since August when the sudden drop of 80,000 customers occurred, Netflix is certainly still a top competitor in the content streaming world. In fact, Netflix posted above forecasted earnings for Q3 despite all the drama. We live our lives by the numbers, but it is important to make sure we step back and scrutinize those misleading little digits and find the whole story.
The bottom line is that ALTHOUGH Netflix’s bottom line is doing relatively well, its customer base is none too pleased with the company’s lack of effective communication. In the article by Sam Laird of Mashable.com, “Amazon Wins, Netflix Loses in Holiday Customer Satisfaction Study” Laird points out that the effects of the miscommunication have gone far beyond that fateful August decision. Customers remember feeling distrust and Netflix’s reputation has suffered long-term damage.
The mistake is not so much that Netflix changed its pricing structure (companies do this all the time); it is that the company botched engagement with its audience on the proposed changes. The communications department failed to give warning, take into account customer feedback, and create a dialog with their audience to ensure an understanding of the proposed changes. Do you remember the fifth “P” from our first blog? Once again, the human “people” communication factor was severely overlooked and social media caused the crisis to go viral.
I think you all know where the lesson is here, but if you are already half asleep or would just rather us tell you, well…here it is: technology mandates that your messaging involves both communication to your audience and audience feedback. The second element is where you can build a relationship with your consumer base through interaction. You can get insights into the opinions, likes, and dislikes of your customer simply by communicating and listening.
Whether you are a nonprofit designing a promotional product line, or a film festival gearing up for your festival’s events management, clear communication with your customers not optional; it is marketing law. Make sure that your customers are part of the communication process and not simply receptors of your messaging.
Let us leave you with a few tips we’ve bumped into along the way:
- Tell the Truth:If you say your product is recyclable make sure that it is. Period.
- Tell the Whole Story: If your product is recyclable, share your materials, which parts are recyclable, and how it is recyclable. Check out Recycled, Recyclable, and Green…Oh My for more info.
- Nonverbal Communication Is Worth 10,000 Words:The designs you select for your product do, and will, have an impact on the way your customer perceives you.
- Engage Your Audience: Use your social media, your website, your product, and your event to communicate the nature of your brand and your value proposition. Feedback from your customer base is important so answer questions, create a dialog, and augment your message if need be.
- Engage Technology: Your company website or Facebook page is a great way to find out just how your customers perceive you. Leave the focus groups to the market research stats gurus and do a bit of your own sleuthing by browsing your comments. You may find your next great promotional idea from within that dialog.