Lost Opportunity: Netflix’s Reed Hastings blows the apology Part II

Posted By on September 21, 2011

The second in a two-part series on Netflix CEO Reed Hastings’ attempt to apologize to subscribers for recent changes to the Netflix service and fees. In July 2011 the company announced the DVD-by-mail and streaming video service would be charged for separately and that the combined Netflix fee increases would be up to 60% higher than the previously bundled fee. Netflix subscribers were outraged and left in droves (over 1M at the time of the apology) and the Netflix stock price dropped from $292 to $130 per share. In the previous post, we talked about what he did wrong in the video and in this post we’ll talk about how to avoid his communication mistakes.

Let’s imagine we’re Reed Hastings and preparing to deliver this important Netflix apology. How should we start?

By asking:

  • What are the goals for this communication?
  • What do the subscribers want to hear? What’s on their mind?
  • What should the message be to subscribers? To the public?
  • What feelings do we want to evoke in the subscriber or John Q Public?  What tone should be struck?

Establish your goals

The goals might be to:

  • Stop the loss of subscribers
  • Win back lost subscribers
  • Quiet the criticism
  • Clarify the change and why it was made
  • Build support for the new services
  • Regain respect for the brand
  • Clarify the value of the services
  • Reinforce the company’s loyalty to its subscribers
  • Reassure people that the DVD service would continue to be available

Subscribers may be thinking: “Why the dramatic price increase?”; “What am I getting now that I didn’t get before?”; “Why should I stay a Netflix customer rather than go to Blockbuster or Redbox?”; “Is Netflix going to fail since everybody’s leaving the service?”

Prepare messages and delivery

Using just these two items – our goals and what we know about the audience – we can craft our messages, the right tone and decide how best to evoke the desired feelings and actions.

Address resistance

We should prepare to address the resistance of the subscribers to our message. They’re mad, frustrated, confused, annoyed, etc. and don’t feel inclined to accept our apology at the outset. We need to acknowledge that. It is key to evoking the empathy that is needed to win their trust and motivate them to take action.

Give them a reason to forgive

Then we need to give them a reason to forgive. Finally, we need to pledge not to repeat the mistake and thank them for the frank feedback.

In summary, know what you’re trying to accomplish; understand the point of view of the audience; acknowledge their resistance; give them a reason to forgive; ask for forgiveness; pledge to do better; thank them for their feedback. Remember, speaking for impact is not an  accident. It’s a skill.

Share your thoughts

Have you ever had to apologize on behalf of your department or company? What advice can you share?


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