Monthly Archives: February 2012

Qwikster Flops Due to Social Media Mishap:Can Netflix Recover?

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In previous posts I have discussed companies that have really put social media to work for them, however social media can be devastating to a company if not used effectively; just ask Netflix.

In 2011 Netflix was set to launch a new service called Qwikster, which would have offered a DVD only service to it’s customers. On October 10,2011 Netflix announced that they would not be going ahead with it’s separate entity in Qwikster only three weeks after it had announced it’s plans to create it. What changed the companies mind so suddenly you ask? Three words: Social Media Mishap

Netflix advertised a Twitter account for @Qwikster before they quickly realized that user name already existed in the Twitter database. Not only did it exist, but also it belonged to a user not associated with Netflix that talked about drugs and cursed a lot. Even though he was not associated with Twitter the damage was already done and Netflix bad reputation had been created and poor judgment would be associated with the brand.

Additions to this Disastrous Recipe

Although the social media mishap was bad, and caused an enormous amount of negative media and opinion of the company, it had an equal counterpart in the downfall of Qwikster. Netflix got to greedy within their success and tried to separate their DVD by Mail package and their online streaming package. Although risk is associated in every setting, including the risk of failure,  a company of this size should have conducted the research and gotten to know it’s customers better, so that they would have known Qwikster was a terrible idea and would not garner support amongst their customers. The customers did not want to pay and have their existing services separated. Although they canceled the separation of services, Netflix still intends to keep its price increase.

Consequences of Their Actions

After Netflix announced their Qwikster plan, their stock price dropped 25% from $155 to $117. After announcing the 60% price increase earlier in the same year, their stock dropped from $300. On website cited “ The cost of this particular blunder was 800,000 lost subscribers, or $192 million in $20/month subscriber fees.”

Whenever a company introduces a new product or innovation there is always some sort of risk involved. How with this affect our existing product sales and customer opinions will our customers be open to the new product will be competitive in our market? Unfortunately for Netflix their marketing team, social media team, and risk management team failed causing them to lose many customers, company value, and money while gaining negative publicity and poor brand recognition.

I think that since Netflix offers a convenient product, and therefore it’s customers will move on from this social media disaster. In the future I feel as though Netflix will be it’s own biggest enemy.

Are you a Netflix customer? If so, did you continue your service when the price increased? Do you feel like Netflix can bounce back from this social media mishap?

Smith, S. (2012, January 20). What the Biggest Social Media Blunders Have Taught Us. Ragan.com. Retrieved February 26, 2012 from http://www.ragan.com/Main/Articles/What_the_biggest_social_media_blunders_have_taught_44253.aspx

Kafka, P. (2011, October 10). Qwisktter is Gonester: Netflix kills it’s dvd only business before launch. All things D. Retrieved February 26, 2012 from http://allthingsd.com/20111010/qwikster-is-gonester-netflix-kills-its-dvd-only-business-before-launch/

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Is “Pinning” the New Social Media Trend?

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According to an article published December 15th, 2011 44% of Americans now own a Smartphone, up from 18% two years ago, and 62% of the users have downloaded an application for their phone. It is safe to say that with the growing popularity of Smartphone and applications, that it is a smart choice as a business to utilize the expanding technology if possible.

 My past two entries have discussed the benefits of social media for businesses and how the travel industry effectively utilizes social media. Today I’m going to discuss how Pinterest, a social media online pinboard, is helping to drive business services and products to consumers. The website allows users to discover new things and get inspiration from people who share the same interests.

 The main website allows users to log in through their Facebook or Twitter account to browse and/or pin either on your own pinboard or one that someone else created. These pinboards help the creator to organize things they find on the site they like as well as helping other Pinterest users to find ideas when the search. For example, if I ‘m decorating my new home and I can search for living room ideas, and find themes and pieces of furniture I like and where I can buy it.

 The mobile application for Pinterest is free and allows one to take all aspects of the site with them while they are on the go. It allows users to browse pins from people and pinboards you follow, repin, like, and comment on your favorite pins, and pin on the go with your Smartphone camera. The application provides users with a great sense of convenience. It can also be used to search for businesses in the area. For example, one could search on Pintrest, best bakery in NYC and find suggestions from other users and then stop at the bakery to judge with the possibility of repining.

Measuring success and Pinterest’s Impact

The Pinterest app in the ITunes store received a rating of 4.5 stars out of five and users of the application raved about the app and Pinterest. The success of Pinterest can also be seen in it’s ability to drive traffic to websites. Piccy is the 18th most shared site on Pinterest and the companies founder Daniel Eckler is happy with the popularity on the site. According to Google, Pinterest has sent over 600,000 users to Piccy’s website in the last year and 50,000 in the last month. The traffic comes from over 200,000 users who spend an average of 4 minutes on the site and Pinterest is the company’s 3rd largest traffic driver. Lastly, Pinterest’s mobile app contributes to 20% of the activity while Facebook’s mobile app only contributes about 8%. Eckler believes that Pinterest will over take Facebook’s referral traffic within a few weeks and will be their number one referrer by the end of the year.

Below is a chart tracking referrals to Piccy’s site by Pinterest. The heavy growth seen over the recent months is parallel to the growth the website has seen with their users. 

piccsy Pinterest traffic

Chart was retrieved from San Francisco Chronicle article published on Friday, Feb 17, 2012, accessed online.

Shontell, A. (2012, February 17). Chart: This is how much traffic pinterest really send sites. San Francisco Chronicle . Retrieved from http://www.sfgate.com/cgi-bin/article.cgi?

Horn,L. (2011, December 15) U.S. Smartphone use on the Rise, With Andriod Leading the Charge. PC Magg. Retrieved from http://www.pcmag.com/article2/0,2817,2397688,00.asp

Social Media Flying High in the Travel Industry

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I believe that here in New England we have been blessed with a wonderful winter, with little snow and only a handful of days with temps below 20 degrees, however like many others, I still have warm, sandy beaches on my mind. It was these thoughts that led to my post today on the travel industry in social media.

Customer Service

The travel industry has always been based on great customer service, and when the industry uses social media, it keeps this mentality where the customer always comes first. One big aspect to joining the online social media community, as a business in the travel industry, is that you become susceptible to consumer reviews. The new trend with hotels and airlines is to be confident within these reviews. This means linking your website to related travel publications to show confidence and to show consumers that they are not afraid of customer reviews. Along with confidence, companies are using techniques to lead conversations on their site to avoid negative comments. Carnival Cruise line does a great job of this. http://www.facebook.com/Carnival KLM, an international airline set the customer service standard in 2011 when they promised to respond to customers within 60 minutes on both Facebook and Twitter. Delta Airlines then raised the bar when they vowed to respond to all customer inquiries within 10 minutes. By promptly responding these companies are providing fantastic customer service, which will attract new customers and keep the old. Lastly, airports are using Twitter and Facebook accounts to provide a concierge service to travelers while they are at the airport.

Promotion

Of course companies in the travel industry are using social media sites to promote their products and in return consumers can find great deals. Southwest Airlines https://www.southwest.com/flight/subscription/cns-email-subscribe.html?int=GNAVCNSDNGSWA offers a great widget that provides its customers with exclusive deals. The downloadable features allows customers to select certain cities as top destinations, and are then notified when deals come through for selected cities. Estonian Air has created a program where customers are reward for “liking” a link, sharing with friends, posting a review, booking online, sharing a flight itinerary, etc. The program, AirScore, rewards members for completing such actions. These rewards can then be used for flight discounts and Air Goodies. If you reach the top level your points can be used for free lounge access or a meet and greet with the airlines CEO. http://estonian-air.ee/en/loyalty-programme/

Innovation

Lastly, companies in the travel industry have been using social media for innovation. KLM announced at the end of 2011 that they would be releasing in early 2012 the ability to book airfare through Facebook and pick whom you would be sitting next to based on their social media account. They would allow social media users on the same flight to examine fellow travelers profiles and select who they would like to sit night to on the flight. If the other person confirmed the request, they would be placed next to one another during the flight. When the company called Finnair launched a new flight service, they attract fliers using the Angry Birds game. The customers on this flight played the fame for 15 hours and were the first to compete in the Angry Birds Asian Challenge. This not only attracted customers, but an incredible amount of media attention as well. Lastly, the airline SAS became the first airline to get its social media followers to vote and decide on one of the new routes for 2012.

Check out this link as it depicts how social media has taken off within airline companies.

http://www.hudsonhorizons.com/pub/images/howairlinesusesocialmediainfographic.jpg

Sources:

Nigam, S. (2011, December 29). Top 11 Marketing and Social Media Innovations by Airlines in 2011. Simplifying. Retrieved February 12, 2012 from http://simpliflying.com/2011/top-11-marketing-and-social-media-innovations-by-airlines-in-2011/

Nigam, S. (2011, December 29).Customer Service 2.0. Simplifying. Retrieved February 12, 2012 from http://simpliflying.com/2011/customer-service-2-0-top-10-airlines-and-airports-performing-customer-service-through-social-media/

Manzo, M. (2011, November 29). Why Airlines Are Cruising Social Media. Social Media Today. Retrieved February 12, 2012 from http://socialmediatoday.com/marymanzo/397935/why-airlines-are-cruising-social-media