What Branding Has to Do with PR and Reputation ManagementPosted by Heidi Strom Moon under Branding & Print Design
Update 10.10.11: Turns out customer backlash (and sagging stock prices) had the final word; Netflix announced Oct. 10 that it would be abandoning the Qwikster plan and site and keeping both DVDs and streaming at Netflix.
Just when you thought Netflix had shot itself in the foot back in July with its ham-handed rollout of price increases on both DVD rentals and streaming, along comes an “apology” email from CEO Reed Hastings—in which he aims for the other foot.
Now you not only have to pay higher prices to watch movies at home, you’ll have to get them from two different companies—one that delivers physical DVDs, and one that delivers online streaming. Oh, and those two companies? They have two different names. And two separate websites. Confused yet?
It would be a slight understatement to say that customers are not happy. In addition to thousands of negative stories, comments, tweets and Facebook status updates (not to mention groups) generated by these two announcements, the company has lost half its value since July.
All of this bad PR has hurt the reputation of Netflix, the company. And that, in turn, hurts the value of Netflix, the brand.
As if that wasn’t bad enough, the new brand Qwikster, which is taking over the DVD rental side, has been thoroughly and publicly tarnished—before it’s even launched.
To loyal Netflix customers, the Qwikster brand now represents a cumbersome annoyance. It’s that new website they have to go and deal with if they want to continue renting DVDs by mail.
New customers will hear about the Qwikster launch through the slew of negative media coverage—if they don’t first stumble on the profane Twitter account of the same name that Netflix failed to secure in advance.
So while Netflix lies bleeding from its most recent self-inflicted wound, let’s take a minute to assess the lessons you can learn from its troubles:
How Your Brand is Influenced by PR and Customer Service
- Brands don’t stand alone. As this example unfortunately demonstrates, a brand’s value is directly related to the reputation of the company behind it, and the reputation of its goods and services.
- Bad PR can kill a new brand. Will Qwikster survive? It’s too early to tell; Netflix’s subscriber base is large enough that it might be able to sustain the hit. But then again, many people thought Blockbuster was too big to topple—until Netflix came along. (And Blockbuster’s now fighting back; they’re taking advantage of the story to promote their own mail rental service.)
- Good PR can make a brand better. Imagine if Netflix’s announcement of Qwikster said that they were renaming their disc rental service to more clearly separate your two queues while keeping them both within the website you already know and love, they were enhancing it by including video game rentals—and that as a thank you for being a loyal customer, Netflix was giving you the first 3 months of Qwikster service free? Would we be telling a different story today?
The takeaway from all of this? Be aware of how PR for your company drives the value of your company’s reputation and brand. Involve your PR and communications professionals in any new brand development and launch. Whenever possible, get early feedback from your customers; once you’ve launched, it’s too late.
- What do you think of the evolving Netflix/Qwikster saga?
- Are you a Netflix customer? Will you be keeping or canceling your account?
- What’s your PR advice for Netflix?
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