The question is… can trust be revived in a brand that is seriously damaged? Almost every year there are brands that amaze us with incredible stupidity… mostly generated by a drive for bigger sales numbers. Volkswagen not only misled consumers and dealers about emissions and gas mileage claims, but
tried to make it a small and inconsequential issue until investigators uncovered an ever-growing circle of management and leaders who actually knew exactly what was going on. [Read more →]
September 30, 2016 No Comments
One universal characteristic of market leaders and powerful brands is that they are authentic. Business leaders should challenge if they have embraced what authenticity means.
Authentic brands do what they say. Their behavior is consistent with their promises. That means that the organization making the brand promise must be congruent: its business processes have to be designed and aligned to ensure behavior that supports and delivers the brand promise. So ‘brand’ goes way beyond communications or image. It is an organizational mandate.
There have been three recent examples of brands that have broken this trust. Volkswagen completely diluted its brand by not only installing software in cars to cheat on emissions standards, but also hiding and denying this behavior for years. They impeded and obstructed regulators and provided misleading information, and thus violated not only customer trust, but also employee affection for the company. It will take years for VW to recapture its market position.
Takata, a leading supplier of air-bags, tried to duck responsibility for airbags that can explode when deployed by implying that it was a data manipulation issue. The truth did come out, and after years of denial, Takata is now paying the price for misleading customers. Their brand has suffered immeasurably. To quote the lead plaintiff, “The only thing they did not know was the names of the individuals who were going to be injured or killed, and the date it was going to happen.” Ouch.
Chipotle did not appear to react fast enough when it learned about a Norovirus outbreak. Apparently, the procedure for “washing down” produce didn’t seem to be effective. They have subsequently apologized, closed some restaurants and put in place new procedures. The question is whether consumers will believe that they will continue to act in a truthful manner. We give them praise for not denying the problem, but time will tell whether consumers believe Chipotle acted fast enough in the best interest of their consumers. For a brand based on credibility, they are dancing very close to the edge.
One of the benefits of being authentic is word-of-mouth recommendations and repeat purchases. In other words… loyalty. Whether B2B or B2C, understanding what authentic means and living it every day is a mandate in today’s complex markets.
February 19, 2016 No Comments
“What really drives customer loyalty?” is a straightforward question that many CEO’s are asking themselves. A popular response is to employ a loyalty program. This is not necessarily the right answer.
Every airline, hotel, credit card, and grocery store has a loyalty program, and they spend in aggregate $50 billon dollars a year on rewarding customers according to Forbes. Just look at the numbers:
– 83% of consumers participate in a loyalty program
– On average each U.S. household belongs to 29 individual programs, but are only active in 12
– The airline industry alone in North America earned $9.6 billion by selling miles to partners in 2013.
Loyalty programs are big business.
But if you peel back the onion, you’ll find that only 42 percent of program members are active, engaged or participate (The 2015 Colloquy Loyalty Census). That’s a lot of wasted dollars that could be put to use elsewhere. This is not to say that loyalty or reward programs don’t work. They should be used as a form of recognition for valuable customers. But marketers need to reframe how they view these types of programs. The purpose of the programs, including the common practice of providing awards to all customers – good, bad and even unprofitable ones – needs to be rethought. [Read more →]
June 22, 2015 No Comments
Heineken is introducing a new, taller bottle in the U.S. in order to help it’s flagging sales. It is a smart move on many levels, and it will be successful. But imagine the internal debate about change.
Heineken Lager Beer was established in 1873 in the Netherlands, and still uses the same recipe. It was the first beer imported into the U.S. after prohibition, in 1933, and has been a consistent bell weather brand. But while they once commanded a leading share of imports, Corona, craft beers, and even traditional competitors have introduced newer packaging and flavors, and Heineken has suffered. Today, Corona outsells Heineken almost 2 to 1. So it was out of necessity Heineken considered an alternative to the squat green bottle that has been their structural heritage. Funny how competition pushes a brand to better understand it’s equities.
September 20, 2012 No Comments
I have been a loyal Citigold customer for 20 years. But last Friday they really put a chink in my loyalty. Citigold is the “premium banking” part of Citi, a step above the masses. It has been very convenient for all these years. Here’s how they violated my affection.
First, they called me at home to market something. I guess there should be nothing wrong with that, but then again, I expect better than retail treatment as a Citigold member. Perhaps they were calling about a fraud issue, or an observation about how I could manage my account better. But they weren’t. [Read more →]
June 21, 2012 No Comments
DYMO, one of the leaders in providing label printers, just treated me the right way, and retained my loyalty at a critical moment. I had recently upgraded to a new operating system for my Mac. As a result, my computer couldn’t communicate with my label printer. After trying several options, I finally called DYMO customer service, and they used that moment to secure my loyalty for a long time to come. When they realized that my label printer wasn’t compatible with my new OS, they generously said they would replace my printer with a new one… at no cost to me.
February 10, 2012 No Comments
While Automated, Electronic Customer Service 'Voices' are Getting Better, some Brands are Missing a Bigger Opportunity.
Companies around the world continue moving customer service to automated systems to cut costs. But in doing so, they may be damaging their brands instead of helping them. A recent Wall Street Journal article highlights the recent moves to shift these automated voices from “cold to homey”.
In some business categories, customer service is the critical touch point where the brand is actualized. While marketers have been focused on advertising and other traditional marketing tools to define brands, it may well be that customer service is the one place where a company has control of shaping the brand in a tangible and powerful way. The service interaction is an enormous opportunity to build the customer relationship with the brand and engender deeper loyalty and advocacy.
November 4, 2010 6 Comments