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Netflixincrisis:ateachablemomentformarketingleadersByMikeGospeMondaymorningIawoketofindanemailinmyinboxfromReedHastings,co‐founderandCEOofNetflix.I,too,amaNetflixsubscriber.Thesubjectlineread“AnExplanationandSomeReflections.”Iwassurprisedandintrigued,soIopenedit.Iexpectedtofindashortemailthatacknowledgedthecustomerfirestormthathaderuptedandofferanempatheticresponse.Thiswasnottobethecase.Inresponse,Ragan.compostedaveryinsightfularticle,WilltheNetflixmeaculpawork?AsIreadtheirarticleandreflectedonmyownpersonalexperience,Irealizedthatthereisadeeplessonforallmarketingleadershere‐‐thelessonofwhathappenstoacompanywhennooneownsthemarketinghighground.First,let’sseparatethebusinessdecisionsfromthemarketingdecisions.Byallaccounts,expertsagreethatstreamingisthewayofthefuture.Toembracethat,Netflixischallengedbyawholeseriesofdifficultbusinessdecisionsthatincludeseverythingfromnegotiatinglicenseagreementstocapturingandcreatingcontenttoprovidingtop‐notchcustomerservice.ButitisthemarketingdecisionsthatintriguemebecausetheonlythingIcansayforcertainisthatnooneatNetflixappearstoowntheirmarketinghighground.Iftheydid,Mr.Hasting’simpassionedemailandvideopostwouldhavebeendifferent.Themarketinghighgroundrepresentsthat special place where marketers know the market so well that they become acknowledged and valued within their company as the customers' advocate. I can only surmise that as Netflix has grown so quickly, somewhere along the line the path to the marketing high ground was abandoned, becoming trumped either by demands from investors or the complexity of running the business – challenges that are common to every business.FailuretocommunicateFailuretoownthemarketinghighgroundleadstodecisionsthatcustomersdon’tunderstand.Forexample,Netflixcontinuestodefenditspricingdecisionsusinglanguagethatappealsmoretobusinessinvestorsthanitdoestoconsumers.AndyetNetflixhasnotacknowledgedthedeeperissuethatangercustomers,namelythatthestreamingservicecurrentlylackscontent(value)worthyofitspricing.InMr.Hasting’semail,hefailedtoaddresstheseissuesandinsteadannouncedthelaunchofQwikster,furtheringcustomerdissatisfaction.IfNetflixhadknownhow

customerswhereusingthequeuestojuggleboththeirDVDandonlineviewinghabits,perhapsthedecisiontoseparatetheDVDandstreamingqueuesintotwodifferentbrandedwebsiteswouldhavebeendifferent.WhytheMarketingHighGroundmattersControlisanillusion.Intheageofsocialmedia,customershavemorepowerthaneverbefore.Thisisevenmoreimportantwhenwerealize,perhapsmuchtoourowndismayasmarketers,thatemotiondrivespurchasedecision(ordecisionstocancelservices),notlogic.Theonlywaytosucceedinbusinessandholdontoamarketleadershippositionrequiresbusinessleaderstoempathizewiththeircustomersbecausewhoeverunderstandsthecustomerbest,wins.It’sassimpleasthat.Themostseasonedmarketingleaders,fromtheCMOtoproductmarketing,productmanagement,andcorporatemarketingleaders,mustbeabletochannelthesentimentofthecustomerandrelayittoothersinsidethecompanywhenparticipatinginbusinessdecisionsandformingmarketingcampaignsandplans.Thebestmarketersmakerecommendationsnotbasedonpersonalopinion,butonanunderstandingofmarkettrends,customerusecases,andcustomerfeedback–threekeyelementsthatcanchangeatanytime.Standinguponthemarketinghighgroundmeansbeingthecustomer’sadvocate.Onlythencancompanyleadersmakethebest‐informeddecisionsthatwillguidesuperioractionsineverythingtheydo.About the Author:Mike Gospe is a marketing strategist, co­founder of KickStartAlliance, and the author of Marketing Campaign Development. His new book, TheMarketingHigh Ground, is a B2Bmarketer’s playbook describing the best practicessurroundingpersonadevelopment,positioningstatements,andmessaging.Thebookisloaded with illustrations, figures, templates, and examples. Both books are nowavailableontheKindle.

September2011