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3 Lessons PR Pros Can Learn From Netflix

ClassroomWe’ve all heard the saying, “You can learn from your mistakes”.  The adage is undoubtedly true and much easier to apply when the mistakes you’re learning from were actually made by someone else.   A cautionary tale can be a valuable learning tool when taken to heart.

Recently, Netflix became one of said cautionary tales.  Their miscues have shaken the company to the core – causing their corporate value to drop drastically between July and October 2011.  Just as badly, Netflix damaged, some say beyond repair, its relationship with customers.

Check out the fall-out behind some communication decisions and the 3 small business marketing lessons you can learn:

1. Price Increases

There’s no better way to alienate current customers than to introduce perceivably unwarranted price increases.  Netflix did that masterfully by hiking prices up 60 percent.  The result – the video service lost one million subscribers in just three months.

Price hikes may be inevitable, but the affects to your marketing success make them decisions that should be made carefully.  If you have customers paying their bills regularly, chances are they’re not focused on price.  Raise your rates and you put a spotlight on customers’ perception of your value.

  • Be prepared to explain your reasons for an increased cost, especially if the service remains the same.   No consumers want to pay more for an existing service.
  • Explain the value you continue to bring.
  • Let them know you understand how the shift can impact them.

2. Lack of Transparency

Our online world is all about getting everything faster and easier.  When Netflix split their service into two different sites, users everywhere rebelled immediately.  In the past, a customer could visit the website and find their movie choice.  With the launch of Qwikster, which suffered an early demise, customers had to visit the Netflix streaming site first and then go to Qwikster to find DVD mail rentals.

Not only was this an inconvenience for customers, they had to pay separately and more for each site.  Netflix CEO Reed Hastings tried to soothe his audience’s frustration, but the damage was done.  Customers lost trust and Netflix lost face.

  • Remember that today’s consumers are more savvy than ever.  They are better educated and informed about products and services and are connected to a global community that can provide instant feedback.
  • Don’t assume customers will go along easily with changes you make, especially those that add complications to their lives. They most likely won’t.
  • Communicate your changes with transparency.

3. Strategic Planning

Once the Netflix fiasco was underway, the company tried back-pedaling as fast as possible with apologies and revamps.

The dynamic nature of the net speeds up everything in marketing and business.  Your message goes out faster, consumers respond faster and stresses on your business come in faster waves, too.

  • Don’t just plan for mistakes; be ready to deal with mistakes at hyper speed.
  • Be sure your business decisions are accompanied by proactive marketing preparations.
  • Watch to see how competitors deal with problems.
  • Stay on top of crisis PR training and have a plan.

The relationship between businesses and customers can be one that fosters a long path of loyalty.  Keep in mind that buyers drive the process; let them know you understand that.  You’ll find that even when mistakes do occur, the emotional currency you’ve built with honesty and respect will serve you well in the long run.

Have you been in a similar situation? What do you recommend to keep relationships with customers strong, even in a changing environment?

(Photo Credit – Flickr Creative Commons: wzrdsfav)

About Cision Contributor

This post was written by a guest Cision contributor.

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