Differences in Crisis Management: Netflix vs. Apple


Netflix's distribution system hasn't worked properly since Monday evening.

Earlier today, CNBC’s Jim Goldman broke the story that Netflix, the online movie rental company, was having problems with its shipping and distribution system. Netflix alerted its 8.5 million customers this morning with an email. Then it began to implement the company’s crisis communications plan.

According to Goldman, Netflix didn’t ship any DVDs on Tuesday, only a few on Wednesday and none today. Goldman gave Netflix spokesman Steve Swasey high marks: “[He] was candid, forthcoming and easily accessible; hallmarks of good damage control when a company is under the gun.”

Customers are usually forgiving with companies when they are upfront in a crisis and admit what’s wrong and take responsibility. In all the stories I’ve read, Netflix and Swasey have done just that.

For the most part, my counterparts at AT&T have done the same thing in recent stories about problems with the new iPhone 3G. Whether it’s initial activation issues, the poor battery life or the inexplicable switching back and forth from AT&T’s 2G to 3G networks, AT&T has been forthcoming, although brief in their comments.

Interestingly, the PR team at Apple has taken a different approach in responding to any of the iPhone 3G issues. Over and over again, I read where they are not available for comment. They seem to believe that the millions of Apple fanboys and fangirls, many of whom are personal technology columnists at major news outlets, will forgive them for these problems and sweep these failures under the rug, kind of like a wife forgives a cheating husband despite her better judgment.

I think Dr. Phil might say: "Silence isn't helping any of us, Steve."

As Dr. Phil would ask, “Apple, how’s that working for ya?”

If Apple were commenting on this blog or anywhere else, I’m guessing they would say, “Just fine,” and then point to the iPhone 3G sales figures and their new deal with Best Buy to distribute the iPhone 3G.

OK, point taken.

But Apple’s great strength is its devotion to its customers. That’s why customers come back over and over again for everything Apple. Because Apple’s customers expect so much more from the gang in Cupertino, Apple has farther to fall when they screw up.

I have to think that the open and honest approach that AT&T and Netflix have taken would serve Apple better in the long run. Customers understand that even big companies make mistakes, but that aren’t as forgiving when companies don’t take responsibility.

As David Pogue, the personal technology columnist in the New Yorks Times put it, “the real problem is how Apple is responding. For a company that’s so brilliant at marketing, it seems to have absolutely no clue about crisis management.”

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Since I work for Sprint Nextel and I am writing about my employer’s competitors, let me remind you as I have in the “About this Blog” section elsewhere on this site, the views expressed on this blog are solely mine. They do not reflect Sprint Nextel’s positions, strategies or opinions.

There, now the lawyers at work feel better.

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3 responses to “Differences in Crisis Management: Netflix vs. Apple

  1. I found your site on technorati and read a few of your other posts. Keep up the good work. I just added your RSS feed to my Google News Reader. Looking forward to reading more from you down the road!

  2. Thanks Sue. I’m hoping to write on some internal communications topics soon, but so far media relations issues seem to have captured my attention.

    Again, appreciate your kind words.

  3. What a story. You are right. Companies some how seem to think that they should bluff their way out of crisis situations instead of being honest up front. Classic case of underestimating their customers. Customers would simply say, they understand and perhaps even volunteer to help. This has been my personal experience.

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