Editor’s note: View the original article at InmanNext: "What Real Estate Agents Can Learn from the Netflix Mess and Clean-Up."
What started as a company’s decision to change their business structure and pricing erupted in a hot debate across the Web. I am referring to the Netflix debacle that is currently raging all over the Internet.
So what happened? To make it super simple, Netflix decided to change its business model. They were always known as "the red envelope" company — renting DVDs. Well, as you know, streaming movies are becoming more and more popular.
So, Netflix decided to:
1. Raise its prices by about 60 percent.
2. Create a new brand: Qwikster (this will be the "red envelope" DVD business).
3. Keep the Netflix name for streaming content.
Can’t view the video from The Washington Post? Click here.
Those changes set off a firestorm across the Internet:
- SF Gate: "The company has lost half its market value since July, when it announced that customers who wanted DVDs and streaming had to pay for them separately — and pay up to 60 percent more."
- Forbes: "Last month, the company tested the loyalty of its subscribers by raising the price of its video and streaming and mail order bundle. Big mistake, as Netflix has no substantial pricing power."
- L.A. Times: "Netflix Inc., just a few months ago considered the unstoppable titan of the entertainment industry, is suddenly looking more like the Titanic."
In addition, stock prices plummeted. According to SF Gate, "Netflix’s market value has plummeted 53 percent from its high, wiping out about $8 billion in stockholder wealth. On Monday, the stock shed more than $11 to close at $143.75."
So how did Netflix respond?
Did they ignore it? No.
Did they delete negative comments on their Facebook page? No.
Ryan Hastings, CEO of Netflix, wrote a personal email to all subscribers today. No fluff, no fancy HTML, just a heartfelt email. "I messed up," Hastings wrote in the first sentence. "In hindsight, I slid into arrogance based upon past success."
They blogged about it — and to date that post has more than 4,500 retweets and 23,000 Facebook "likes," and 21,000 comments.
They Tweeted about it to their 110,000 followers.
They posted on their Facebook page.
They posted about it on their Facebook page to their more than 1 million fans.
They created a video.
This video (below) on YouTube has over 90,000 views.
Can’t view this video from the Netflix CEO and co-founder? Click here.
So what does this have to do with you and your real estate business?
Here are five lessons we can take away from this:
1. Own it. If you are going to change something that drastically affects your clients, tell them as directly as possible. Don’t hide behind it or pretend it didn’t happen. Be upfront.
For example, if you are working with a client and you suddenly need to take a leave of absence, or are not able to work with certain clients, and you pass off your client to another agent, make the transition as smooth as possible.
Don’t just do the handoff and then bail. Buying a home is usually one of the biggest and most emotional purchases someone makes — and the person they choose to represent them is a really big deal. Follow through on the details. Own your choices.
2. Take responsibility. Maybe you made a bad choice. Maybe you referred your clients to a mortgage broker who did not do right by your clients. Maybe you didn’t do enough homework on a specific listing. Maybe you took a listing you probably shouldn’t have taken.
You messed up — apologize, sincerely and quickly, and don’t make excuses.
3. Don’t ignore negative feedback. Netflix has not backed down from negativity. They have aggressively responded to comments and encouraged discussion.
So many times an agent will ask me, "Can I delete something from my Facebook page if it’s negative?"
Technically you can (and I do recommend deleting spammers), but in all honesty, it’s better to respond quickly to a negative statement and let them know you are listening and can take care of it. The benefit is that person feels like you heard them, but also anyone else reading your posts can see you that you responded in a timely manner.
If you’ll see from Netflix’s Facebook post, they have over 700 shares, and thousands of comments. Even the CEO himself was responding to comments on the blog.
4. Think carefully before changing your brand and/or your company name. There is a lot of debate as to why the DVD part of Netflix will be Qwikster and not Netflix.
Some people speculate that DVDs will go the way of the eight-track player and the company doesn’t want to bring down the company with a name associated with something passé. Interesting concept. Is your brand representing the past?
Whether you agree, know that changing your name or brand is a very big deal. The worst thing you can do is confuse your client with a new name and a poor marketing message that doesn’t convey what you are doing.
A good example of this is when you think about changing brokerages. Do people hire you or the brokerage? Agents typically argue they hire the agent. However, when you make that big change, make sure you think long and hard about how you will convey this change to your past and existing clients.
Can you accurately explain why you are making the move? The benefit to them? How it may or may not affect them? Are you conveying this with handwritten cards? Social media? Phone calls? All of the above?
In this day and age, we can’t rely on just one marketing tool — agents need to embrace them all and think carefully before they change their brand.
5. Secure your Twitter handle. This is a huge error that Netflix has discovered: it does not own @Qwikster.
If you are going to change company or brand names, before you announce it publicly make sure to reserve your Twitter handle!
What are your thoughts on this unfolding issue with Netflix? I’d love your feedback, post your comments below or tell us on our Facebook page.
Some additional sources:
- Netflix renames DVD business, apologizes — but doesn’t back down;
- Netflix CEO says he’s sorry, sort of; and
- Netflix stock plunges as subscribers quit.
Katie Lance is the contributing editor of InmanNext, and the social media director for Inman News. InmanNext is a part of Inman News.