09.26.2011 | Molly McWhinnie
With the recent headlines around the Netflix/Qwikster PR blunder, we are reminded once again the importance of developing effective messaging when communicating to key influencers – particularly consumers. Whether you are announcing a change in your business model, introducing a new product or an update to an existing service, effective messaging allows organizations to articulate its position and reasoning to influence consumer behavior, drive sales and ultimately, achieve success.
Where could have Netflix improved its communication efforts? First, the company could have developed stronger messaging that emphasized the benefits of the changes specific to consumers, not to the company and its investors. This messaging would have provided a stronger, clearer explanation to consumers that while the price change may appear exorbitant, it will enable the company to license even more streaming content for consumers to access.
In July, Netflix first announced to its 25 million subscribers that it was adjusting its offerings, separating the subscriptions for physical disc mailings from its online streaming services, and raising its prices for the monthly plan by 60 percent. In this announcement, the company did not offer any clear reason for consumers to understand the price increase beyond, “it no longer made financial sense to offer streaming and DVDs for $10.” As the U.S. economy waivers on reverting back into recession, consumers have become more conscious of their spending, and the price hike on Netflix’s service propelled many to cancel their subscription.
In hopes to regain the trust and loyalty among its consumers, Hastings utilized the company’s blog and sent an email apology to consumers, acknowledging they have been listening to their feedback over the past two months and offered to explain the changes further. Instead, Hastings combined this message to communicate another disruptive change to its service – the introduction of Qwikster, the new name for Netflix’s DVD-by-mail service. Unfortunately, the message was not positively received by consumers, and only continued fueling the disdain for the company.
Had Hastings used the opportunity to articulate how these rather significant changes would ultimately benefit the consumer, it may have helped to justify the reasoning. Instead, Hastings said the price increase was to remain intact and introduced yet another change: Netflix will spin off its DVD-by-mail feature to a completely separate entity called Qwikster, where consumers will need to create an entirely separate account to manage their DVD movie subscription.
Ask any PR professional and they will say the tactic to address consumers directly to quell any misgivings created by Netflix’s initial announcement was the right move. However, it is equally important to develop effective messaging at the beginning of any campaign, as it is for any follow up communication to key influencers. We have often shared tips on how to identify and develop key messages for any company or product in our blog, which is the fundamental “strategic foundation for success.”
What are your thoughts on how Netflix could have communicated its changes to consumers more effectively? What would you have done to address consumer concerns?