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Revisiting Qwickster and How Social Media Helped Save Netflix - 9/25/2012 -

Announcing an unpopular service change via social media can set your association up for some ferocious feedback, but a little tough love from your members just might talk your higher-ups out of a huge misstep.

By Ben Berkey

Imagine this scenario unfolds on your association’s blog or Facebook page:

Your CEO himself makes a direct address to your membership, informing them of a significant change to their benefits. The price of membership just went up, and several previously offered services are shrinking or being rebranded. You probably expect a bit of groaning—nobody likes change. But to keep up with rising costs, sometimes you have to make unpopular decisions, right?

The fallout is swift and brutal. Within 24 hours, your social media page swells up with complaints from irate members. Your kneejerk reaction might be to delete the posts, temporarily disable comments, and warn your customer service department to batten down the hatches. But damage control aside, how do you salvage your association and regain your members’ trust in the aftermath?

Netflix Then

Movie rental giant Netflix found itself in that predicament in September 2011. With customers already seething over a recent price hike, CEO and cofounder Reed Hastings used social media and email to announce a dramatic change in Netflix’s services. Netflix would continue to exist, but would exclusively offer cloud-based streaming video. Meanwhile, Netflix’s familiar red envelope DVD-by-mail service would be rebranded as Qwikster, a separate business requiring a unique account and billing.

The onslaught of negative feedback was a legendary Internet debacle. Hastings’ initial blog post received more than 27,000 comments from outraged subscribers. For the first several hundred comments, Hastings attempted to apologize and respond to each subscriber personally, which resulted in customers directly attacking him and demanding his resignation (in much less professional terms). A very small minority of loyal customers was sympathetic, but others promised to cancel their Netflix subscription and sign up for competing online rental services instead.

The Huffington Post predicted Netflix’s growth would come to a halt, and the Washington Post asserted that it was too late for the company to reverse the changes. The toughest responses came from Netflix’s own subscribers. One post on Netflix’s corporate blog read, "Five years from now there will be a Harvard Business Case named ‘The Decline and Fall of Netflix.’”

Netflix Now

Netflix is alive and well, in large part because it listened to its subscribers. Less than a month after making the initial announcement about Qwikster, Hastings issued a new statement that Netflix would remain as one company that offers streaming video and DVD-by-mail. In March 2012, paidContent.org reported that Netflix had fully recovered profit-wise. And on the one-year anniversary of the Qwikster fiasco, PC Magazine announced that Netflix is still growing strong.

After an initially embarrassing wave of negative feedback, Netflix avoided a rebranding disaster. Completely reversing a decision as Netflix did may not always be possible, but if the outcry of its subscribers had not been so public and candid, Netflix might have enacted a big mistake.

The takeaway from the Netflix story is that associations must be prepared to use social media to gauge members’ opinions on potentially polarizing topics in an open forum. If you haven’t had to do that yet, it may only be a matter of time. Looking at case studies of those who have gone there and lived to tell about it may be the best way to figure out how your organization should respond in a similar situation.

Ben Berkey is a copy editor at Oncology Nursing Society and volunteers on the Association Media & Publishing Content Committee.


 

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