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Lessons in Social Marketing Given By NetFlix Predicament

If you are a successful online movie streaming service with a DVD rental wing, facing incredible pressures from competition and changing technologies and needing to increase your prices and differentiate your service, then it’s only natural that you will be using social media marketing with every breath, right?

Well, erm…maybe not. This is a lesson Netflix simply forgot to take into account. When it decided to change its name to Qwikster and put its prices up, not only did it lay itself open to just about every joke you can imagine concerning the company’s literacy, but it also seemed to forget to trademark the name and failed to check to see if the Twitter handle was available.

The result of the oversight is nothing less than disastrous. Qwikster is a handle already owned by a Twitter user who has a joint-smoking Elmo (the Sesame Street character) as his avatar. The account belongs to a student by the name of Jason Castillo, whose Tweets around recreational drugs, sex, games and music have a surreal, hypnotic quality all their own and are a world apart from the mundane concerns surrounding the renting of DVDs or the streaming of movies.

Without a trademark on the name and with Jason Castillo actively posting that Twitter can do nothing to make him close his account or hand it over. Amusement aside, what all this illustrates is first, that even a company like Netflix, which in many ways ‘gets’ the web, has not yet made social media marketing part of its DNA. Second, that the moment you take your eye off the ball and forget that we live in an age where social media is pervasive and capable of creating a massive boost or being an unforeseen hurdle, that’s when you are most likely to stumble.

Reed Hastings, Netflix’s CEO, recently had to use Google’s social network, Google+ to apologise to Netflix users for the rise in Netflix prices and also explain why it was necessary and why the company had no option but to do it.  And he also posted an apologetic note on the Netflix blog - His opening confessional tone aside, it is clear that had there actually been thought put into social media as a valid means of communication from the very beginning Netflix would now not be in the hot water it's in with its users, nor would it be the butt of jokes concerning the pot-smoking Elmo’s Tweets.

On the Web, no misfortune goes unnoticed, which means that we can learn a lot from this as social media marketers advising companies on their set up:

1. Use the social media channel correctly. Social media is a communication channel first and foremost. Marketing on it is incidental and incremental, requiring a lot of effort for relatively little appreciable return. Communication, however, is instant.

2. Make communication with your public a core activity
. Do not treat social media communication as something you bolt on as an afterthought. Social media is about creating transparency and a two-way conversation. Try to use it as a new form of Press Release and it is likely to explode in your face.

3. Create a dialogue. I do not yet know of a single company that has a 100% grasp of its customers. Yes, they all work with a marketing persona in mind, yes they all have a certain demographic profile they operate with and yes, again, every company has some idea of the age-range and income of its core customers, but all of these figures make sense only when viewed from a distance. Through a twenty-five year career in the retail and corporate sectors, I have yet to meet a single person who precisely fits any demographic, marketing persona or even age-range income combination (though, it has to be said the latter are usually the ones that come closer because of their built-in imprecision). To suddenly have the ability to really talk to customers on a daily basis about what they like and dislike concerning your products and services is something which last century we could have only dreamt about.

4. Be enthusiastic. Communicating like there is a gun being held to your head hardly makes for successful online communication in any channel. This is the real-time Web! There are great opportunities to utilise social media correctly! Do it like you really care.

5. Respond to feedback. There is no point in saying you are listening if your behaviour then shows you are prepared to do nothing about it. You have to show what you are prepared to do and why, when you take no action, that is the right thing to do.

6. Show you are human. You may be corporate. You might be a one-man operation. You might even be part of a large conglomerate worth over $7 billion a year (like I found myself part of for a while). If you are not prepared to put a human face to your communications, admit mistakes, explain faults and give well-reasoned arguments for everything.  The only thing you’ll do is manage to alienate your customers.

Social media is still new. Communicating with customers is not though it has always been governed by what has been possible through the channels used for communication. We should expect many more mistakes to be made in the near future but as we learn from each one, the excuses for us getting our social media strategy wrong will, at some point, begin to wear a little thin.

Join The Conversation

  • David Amerland's picture
    Sep 21 Posted 5 years ago David Amerland

    Courtney, thank you for taking the time to reply here and the link to the group. You are quite right that when social media failings of this magnitude are revealed the underlying reasons lie much deeper. In many cases I have seen companies whose managerial style and management structure belong, more properly, to the middle of last century. When they attempt to jump on the social media bandwagon there are always problems because they are simply paying lip-service to another marketing notion they do not understand. 

    I believe that social media has not even yet began to made much of a dent in this regard. As we see more and more horror stories there will, at some point, be impetus for real change.

  • Courtney Hunt's picture
    Sep 21 Posted 5 years ago Courtney Hunt

    I just shared this piece with the Social Media in Organizations (SMinOrgs) Community via LinkedIn and Twitter. I think Netflix's failings extend well beyond social media, however, and have also started a discussion about the leadership aspects (both individual and organizational) in the LinkedIn group of the Global Center for Digital Era Leadership (GCDEL). I invite folks to join that conversation as we watch this case study - and cautionary tale - unfold. Here's a link to the group:

    Courtney Shelton Hunt, PhD - Founder, Social Media in Organizations (SMinOrgs) Community and Global Center for Digital Era Leadership (GCDEL)

  • David Amerland's picture
    Sep 21 Posted 5 years ago David Amerland

    Bob, it is the nature of journalism to be humbled by readers noticing typos. You are totally right about the gnashing of teeth (add pulling out of hair and kicking oneself, too). I appreciate the message, though. 

  • Sep 20 Posted 5 years ago Clare (not verified)

    Great article.

  • Stacie Walker's picture
    Sep 19 Posted 5 years ago Stacie Walker

    David, this is an awesome article. I received an email from the CEO today about the change and really did not think much about the new name. But then the news spread quickly about the name not being trademarked. What a big whoops! I can not believe a company that huge would not even think about something so simple. It is humbling to know that even big companies can f*ck up.


    Stacie Walker

  • Sep 19 Posted 5 years ago Bob Jeffers (not verified)


    Far be it for me to mention, since I'm lame at spelling, but you had some typos.  But you probably already know that and are gnashing your teeth.


  • Sep 19 Posted 5 years ago Angela Hausman, PhD (not verified)

    Good catch.  I didn't even think about that -- although I certainly check availability before I select a name for myself or my clients.  I had a different take on the whole Netflix disaster, that of poor communication and what that says about the company.  You can read it on Hausman Marketing Letter.

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