Reed Hastings, CEO of Netflix, sent out a heartfelt mea culpa and apology to his subscribers this week. Since they announced their price increases over a month ago, they estimate that they lost over 1 million subscribers. I’d say that’s a pretty big statement that the marketplace wasn’t excited about their price hikes or the way that Netflix had executed on the new strategy. The positive is that when Mr. Hastings realized he had made a mistake, he immediately fell on his proverbial sword, apologized and redesigned the business to make more sense to his subscribers (well, the jury’s out on if that’s true but I’m sure he hopes it does!).
His actions got me thinking about the nature of leadership and what to do when you make a mistake. I make plenty of mistakes. Thankfully for me, they are not on the world stage like Mr. Hastings but they do impact those who work with me, my family, my friends or our customers. Thinking back to my mistakes that have turned out okay (a friendship saved, a customer who becomes a fan for life or a fellow vendor who changes their opinion of us), I’ve come up with 5 Golden Rules for Apologizing:
1) Time is of the essence. One thing that Mr. Hastings didn’t do fast enough is recognize that he and his team had made a major mistake. This gave a million people time to be frustrated, stew over the perceived arrogance of Netflix and take action (in this case, quit Netflix all together). When you make a mistake, quickly own up to it. Even if you don’t have the answer yet, a simple “We made a mistake. We’re looking into what we can do. Thanks for bearing with us,” goes a lot farther than silence does.
2) A humble nature is necessary. One thing that Mr. Hastings did do correctly is apologize in a heartfelt and humble manner. Saying “I’m sorry,” is free. It costs you nothing besides a bit of ego. And, it is often what the other person needs to hear in order to process and move on from their feelings. As we can all attest to from silly fights we’ve had with friends or family, it’s the balm for many an angry or hurt soul.
3) Be Sincere. If you’re not feeling sorry, if you don’t see where you went wrong, don’t lie. Don’t fake it. Keep working on it until you do see where you went wrong. Being authentic is as important as being humble. If you’re only apologizing to save the customer but don’t mean it, don’t bother. People can smell fakeness a mile off.
4) Make sure that your apology is results driven. If you’d like to save the customer, be sure to ask for it. If you’d like to remain friends, make that clear. But (and this is key!), don’t expect anything in return. Your apology needs to stand on its own, without ‘payment’ in return for the apology. But if you’re sincerely and humbly apologizing, do it fast and have a stated ideal outcome that you’d like to see.
5) Be willing to work on it. If you’re apologizing for something you did wrong, presumably there’s a chance you could do it again if you’re not careful, don’t change your procedures or don’t train your team. It’s important that once you’ve apologized and worked on saving the relationship that you hold up your end of the bargain and do the internal and external work that is required to stay out the danger zone again.
Do you have any thoughts about Netflix, about how Reed Hasting handled his apology OR best practices for how you’ve apologized in the past? I’d love to hear your thoughts!
My customer emailed me that his Ghost soaps were turning a “pus-like” yellow gold! I responded immediately that I would pick up the soap that day.
I went to the store and sure enough, the soaps had pink & gold coloring on the edges. I’ve used the fragrance before, but did not ever have a color issue, maybe because I colored that soap aqua.
I brought with me 5 bars of white soap with various fragrances so the customer could choose which fragrance they wanted and see how the fragrances affected the color of the soap.
They chose the new fragrance and I was able to replace all 3 dozen ghosts within 24 hours. He is pleased and I am confident her will keep my company as a valued supplier.
My advice: act quickly, give the customer options to illicit a feeling of control over their outcome and deliver as fast as possible to make them whole.
Great job – and I love that you didn’t blame anyone for the issue – you just got in there and fixed it ASAP. Way to save a customer!
I have to agree with the person above said, the apology is nice, but what are you actually going to DO? THAT’S the part that I care about. And it’s not always about giving an upgrade or something for free (as most businesses think it is, which is why they tend to dole out insincere apologies, just to get customers to shut up and go away…or at least it feels that way), sometimes I just want it fixed so we can both go on our merry ways!
And as for the Netflix thing, I’m sure it’ll work out great for them, and excellent for streaming-only customers, but as a DVD-also person, the changes sound truly terrible, and I bet they’re going to lose a lot more customers. Now, everyone just goes to one website, and either a movie is streaming, on DVD only, or both. Now, if I want a movie, I have to decide whether I’d rather have it streaming or on DVD, and since I prefer streaming (but let’s face it, some movies just aren’t available that way yet/ever), I’ll have to check two completely separate websites to manage two totally different queues. How annoying! So to me (and I’m sure other DVD-also customers) the apology came off as a “we know this sucks for everyone but us, so here’s an apology in the hopes that you’ll continue to pay us while we change our whole entire system.” Not to happy about it. Unfortunately, I love the Netflix service and there’s nothing else like it out there, so I’ll probably end up continuing to fork over $16 for 1-DVD-at-a-time and unlimited streaming (which is more than the 3-DVDs-at-a-time and unlimited streaming plan was when I first signed up in 2005…boo-hoo!)
Wow, I sound really bitter in that comment! I’m not that terrible, I promise! I just have had too much experiences working at places where “apologize” was so emphasized when training for customer relations, but they never actually cared for us to mean it. Even Apple has a system in place so when people call with customer complaints, the amount of money they spent on Apple products is put into a computer program, which then spits out the amount of moneys worth of free stuff the rep is allowed to give you so you’ll go away (they’re instructed to apologize no matter what, and it usually happens while they wait for the number to pop up…how impersonal and uncaring, no?)
And I guess I am bitter about the Netflix thing. I just don’t like it when it seems like companies suddenly start charging more in order to make things more complicated. I guess we’ll have to wait and see how this new system turns out, though! Think positive thoughts!
Wow, that Apple info is new to me and so so so very efficient for them. Interesting.
I never thought of the two differing queues thing. You are right. That is going to be very very irritating.
You didn’t sound bitter to me, BTW, just matter of fact about how the issue would affect you.
I follow Netflix on the Motley Fool stock boards and many many people are saying the apology was insincere, FYI.
Heehee! I don’t know if you’ve ever heard of The Oatmeal, but he just posted a comic today about this Netflix thing, and it’s pretty much how I was trying to say I feel in my other comments. Thought you might get a kick out of it too!
http://theoatmeal.com/comics/netflix
Hil-Ar-Io-Ous!
I don’t think Netflix cares if they lost the DVD portion. I just went from the $10 plan to the $8 one. They win because most of their expense was the mailing portion. I think they find streaming more profitable.
My husband and I are customers as well and we went to the straight streaming option. I can’t remember the last time we actually sat down to watch a DVD together! =) Probably before the baby was born. =)
I am of mixed feeling on this…as a small business owner if we mess up, we immediately try to mke it right…and do apologize for the mess up…as a customer, if there is a problem, I expect it to be handled with speed and efficiency. But sometimes as a customer and dealing with customers I hve found that we often force a business to do more than they should…without thinking…or only thinking of ourselves…In this case I have used Netflix for some time for mail DVD only…the price in the last couple of months went up and down 3 times…Did I post comments, no…Did I leave, no…With no postage on my part, and receiving a new DVD in about 2 days of mailing back, I average 6+ DVD s week…do we are talking over 20 DVD’s a month…so for the cost it beats the boxes, and it is works for me to get them in the mail…saves gas, and time…plus there is no place close to me to rent as the one closed…So I think at times we as customers have to realize that if a company is going to stay in business we have to understand that although we might not like it prices have gone up on a lot of things…
I think you have a very balanced approach – and it’s probably because you’re a small business owner. I know what you mean about needing to really balance out what we can do financially for individual customers versus large groups of customers and still stay in business.
When I was pregnant, I had a very bad experience at a coffee shop chain (that shall remain unnamed) when a barista told me I was “endangering my baby” for ordering a small half-caff latte. Needless to say, I took it to the district manager. Her response was excellent, as it acknowledged the root problem (“we will make sure to address this issue when we train new employees”) and when giving me a book of free drink coupons acknowledged the awkwardness of the offer (“I realize this does not begin to make up for the inappropriate comments, but I want invite you back so we have a chance to prove to you how good our customer service can be”)
I do love that last line – it was masterful! Though, brutal to get that from a barista; I would have been in tears with anger and embarrassment. Glad they tried to make it right for you.
I work in healthcare and though different than retail and hospitality care these are my thoughts since I am a netflix subscriber who is contemplating cutting the service.
If you make a mistake, no cares how sorry you are about it. Honestly, not really they want to know how are you going fix it. For instance if my room is leaking in a hotel, I don’t care for your empathy I want you to give what i paid for a non leaking room.
If you are really sorry prove it to the 25 million subscribers.
Love that opinion – so Reed’s apology didn’t mean much to you because there was no action that directly benefited you. That makes total sense to me. Often, when companies mess up, financial remuneration is something that comes up (2 Day Air this to me for free, give me a discount on my next order, exchange the product for free) and that is one part the apology from Netflix did not have.
This is very interesting. I work in the hospitality industry. A Hotel to be exact. And well, It’s certainly not the best hotel. There is a lot that goes wrong. We as a team always have to be ready for the worst.
One of the key things my organization focuses on, is not Sympathy, But Empathy. Many people don’t know the difference.
So sincerely apologize, we need to have Empathy. Empathy is knowing how we would feel in that situation. It’s a great theory to stand on, and helps the staff make their own decisions.
If I was in this persons shoes, “How would I feel?” “What would I want?”
One of the greatest little books I’ve ever read, “Customer at the Crossroads: From Parable to Practice. By Eric Harvey”
Anyone who deals with customers on a day to day basis should read this book. It is fantastic!
You are SO right. Empathy is huge for apologizing. My husband has this great thing he always says to me that really calms me down, “Your feelings are valid.” That always diffuses me.
Thanks for the suggestion of the book. I’ll check it out for me and my team.