Loyalty Truth

Of the many investments that a business can make, one of the most precarious is its corporate brand. Investment in brands run into the millions of dollars and, on the heels of the Ad-Fest known as the “undercard” of Super Bowl Sunday, the extent to which companies will spend to have their message heard is abundantly clear.

Millennials (Generation Y) are the most technology enabled generation yet. They take advantage of the tools available, staying immersed in their devices and social networks, always connected.

The investment of millions by Super Bowl advertising brands (US 3 Million per 30 second spot) creates an unspoken promise that must be kept on Monday morning. Millennials constantly reevaluate their favorite brands consciously or not. Over time, brand equity is established through a series of positive impressions. Human nature being what it is, this intangible equity can be wiped out through one disastrous service experience.

Competition is just that fierce these days, and the velocity of information collected by this increasingly powerful group of consumers enables a “react, reevaluate, and decide” cycle that can have multiple revolutions even before your Monday afternoon Marketing meeting can address a single issue. How many in the Millennial Generation do you think will pick up the phone and call to complain? How many less will take time to write a letter? If they have a negative customer experience, they just simply move on down the road to the competitor.

Here are two examples of companies whose flourishing brands suffered irreparable harm based on poor customer experience. I know, the sample of this study is small. It is nonetheless poignant and meaningful. As they say, “out of the mouth of babes…comes truth”. In this case, Loyalty Truth!

Not too long ago, Dell had a cache to its brand and their sales showed it. In our house, we made several purchases of desktops and peripherals only to grind teeth as a series of hardware failures ensued, subjecting us to time consuming calls to customer support. No call to the Help Desk is fun, but speaking with offshore support desks that grudgingly escalate the request up the chain of command can be infuriating.

The culmination of several of these negative experiences caused the Millennials in my house to swear never to buy Dell. I have attempted to convince them to reevaluate as the company has largely rectified service shortcoming through Gold Service packages that offer US based support, short hold times, and rapid problem resolution.

Just before the 2004 Olympic games, DHL lost a racing bike that I shipped to a race site. How ironic that DHL was the official shipping partner of the games and continually aired a commercial showing professional cyclists warming up on the ramps behind a DHL truck. Each time the commercial aired, a chorus of “Daddy, there’s your bike!” came from the couch, chiding me for my perceived poor choice of shipper. Now that DHL has announced it’s exit from the US market, maybe the issue is moot. Nonetheless I have a legion of young ones that wouldn’t trust DHL with a fruit cake.

On the positive side, JetBlue’s introduction of personal videos and a selection of interesting in-flight snacks served to delight my gang of Millennials. In all, JetBlue has consistently executed well and has created brand loyalty without my Millennials ever noticing their advertisement efforts.

Apple is a slam dunk example of product quality and retail execution cementing the brand message. Yes, their early ads featuring dancing silhouettes were cool, but the Millennials I know first identified with the brand via their innovative music playing device, the iPod. No wonder that iTunes accounted for about 80% of all digital music sales in the US during 2008. The excellent service provided by Apple retail stores and well-executed promise to migrate PC user data to an Apple PC have attracted legions of new customers.

There are two points of learning from these tales:

Groundbreaking marketing strategy and million dollar investments in brand campaigns are all easily trumped by poor execution. More time and investment should be allocated to employee training and incentives to realize flawless business operations.

Brand is important, but the super-glue known as a loyalty program needs to be in place to overcome service problems. Conceived correctly, a loyalty or customer strategy can cause customers to think twice before bolting for the competition.

How secure is your brand investment?