The Valuable Complaint

Many employees, especially those that work in customer service, find customer complaints to be a nuisance. Complaints are often looked at as a negative aspect of doing business; a component that simply needs to be addressed and dealt with on a regular basis. However, a customer complaint is an opportunity to understand what really matters to the customer, and to gain a deeper understanding of the target audience. Companies should look at complaints as a blessing in disguise, and use customer complaints to improve their products and services; helping them to achieve greater market share and customer loyalty. 

It's all smiles for Michael as he increases his number of stores, and his profits.
But when will consumers catch on? And when will it catch up with Michael Kors himself?

Lets discuss a recent experience I had at a Michael Kors store in the Eaton Centre downtown Toronto. I was gifted a Michael Kors watch that was quite large and needed to be resized. Fortunately for me, Michael Kors offers free watch resizing at any of their locations. I simply had to visit one of the locations to get my watch resized on the spot. Sounds easy right? Wrong. On my first visit to the store, the sales associate asked me to wait four hours to get my watch resized, because she was just "too busy." The next day, on my second visit, the tool that they use to do the watch resizing was apparently broken. Long story short, on my third visit to a different Michael Kors store (no longer the Eaton Centre location), I was able to get my watch resized. 

I was dissatisfied with the level of customer service I received from Michael Kors and consequently, emailed their customer service department. Unfortunately I received the typical "we value your concern" email. Needless to say, I am concerned for Michael Kors' financial health moving forward. After a recent IPO, they now have the funds and resources required to grow their number of stores to approximately 400 retail locations. If they can't appropriately manage customer complaints with their current locations, what makes them think they can maintain their level of customer service, and inherently their brand image, with 400?

Brand Ownership

"One of the most common mistakes in business is assuming that the brand is owned by marketing. Marketing owns the brand because they develop it through advertising, or promotions, or logo work, or merchandising, right? Wrong. Marketing is the quarterback, calling the plays for the brand, but every person and every department is crucial to the brand's success." - Donna Heckler, renowned brand researcher and Fortune 500 branding executive

The quote above is an excerpt from the book The Truth About Creating Brands People Love, written by Brian Till and Donna Heckler (a must read, by the way). They have a solid argument in saying that a brand message needs to be delivered consistently by all employees within an organization. Without a consistent, coherent, and impactful brand message, customers will lose sight of what the brand represents. Unfortunately, delivering a single brand message is difficult for so many large corporations.

Let's look at one company who does it right.

Walmart

Sam Walton, and his first store, located in Bentonville Arkansas. 

Sam Walton founded Walmart in 1962 with a 'no frills' mentality. This mentality helped him provide consumer packaged goods to price conscious consumers, and ultimately led to Walmart becoming the largest retail operation in the entire world. In order to provide Walmart customers with Everyday Low Prices and consequently, great value; a 'no frills' mentality still exists amongst all employees today. How is this message communicated by all facets of Walmart?

1. Merchandisers. Merchandisers at Walmart continue to select reasonably priced products for everyday people. Price is oftentimes the communication of value for a brand. Subsequently, Walmart's products are true and tested, great value brands. 

2. Marketing. Marketing passes the test through their enactment of the price match guarantee program, implemented this holiday season. If a customer found a retailer in the area offering a product for less than what Walmart does, Walmart would honour the other retailer's low price while simultaneously providing the customer with a gift card. (This is definitely marketing genius; sends a strong brand message to the consumer while encouraging another visit to one of their stores).

3. No Frills Headquarters. In Walmart Canada's head office, there are no marble floors and granite countertops. The head office is kept fairly plain and simple, but that is what makes it beautiful. Although Sam Walton has passed, his legacy lives on in the linoleum floors of the head office, and is a signal of Walmart's dedication to value.

4. Sustainable Actions. Walmart is probably greener than you think. Although the recent green movement experienced by the western world over the past ten years is deemed as trendy, Walmart has adopted it for both social and financial reasons. Through switching to renewable energy in its stores, Sam's Clubs locations, and distribution centres, Walmart has been able to decrease their operating costs and pass their savings onto customers. 

My discussion of Walmart's merchandise, marketing strategies, headquarters, and sustainability department represent only a small portion of all the departments that contribute to Walmart's strong brand message. Despite Walmart's behemoth size, they successfully continue to unite employees to communicate the following message: great value.

Comfort can be a four letter word.

This week the movie rental retailer Blockbuster closed its remaining 253 Canadian stores. Victimized by pay TV, online rentals by companies like Netflix, and illegal downloading, Blockbuster could no longer compete successfully. 


Why did this happen?


Blockbuster got too comfortable. They became too comfortable with their typical brick and mortar locations and were too late to innovate and adapt to the changing habits of consumers. Competitors realized there was an opportunity - an opportunity to capitalize on the convenience factor of not leaving the couch to watch the newest flick (now made possible by technology and speed of delivery). 


Another example of a company that got too 'comfortable' with their strategy was The Gap. Think back to around the 2000s. The Gap was a cool, fashionable place to shop. I remember my mother giving gift certificates to The Gap to all of my cousins for Christmas, and watching smiles spread across their faces as they opened their gift. Unfortunately The Gap became boring and continued to offer the same clothes season after season.


Why couldn't The Gap and Blockbuster alter their strategy and get back on track?


By the time a company realizes they need to change their strategy - it's already too late. I'm a true believer that if you're too comfortable in the marketplace, you're doing something wrong. 


Check out Gap's recent rebranding efforts:


http://www.youtube.com/user/Gap?blend=11&ob=5#p/u/0/ER-iKU0pntY


I like purchasing from companies who are original. As far as The Gap's rebranding goes, it's a little too 'American Apparel' for me (Helvetica bold anyone?). But you decide. Is Gap too comfortable? Or is their rebranding strategy a winner?

The Effectiveness of Traditional Mass Media

I've always thought that traditional mass media was losing it's effectiveness. More specifically, I had this preconceived notion that television commercials and newspaper advertisements are ineffective.


Why?


We as North Americans lead hectic lives. We have so much going on, so much to think about, that we tend to tune out unimportant advertisements and commercials because our brains are constantly thinking about what task we will tackle next. Not only are we busy, but we are exposed to so many advertisements that we eventually tune them out. In the world of marketing, this is referred to as "noise."

Think about this, recall three advertisements from the latest newspaper. Can't recall any? Well neither can I.


How about television commercials? Can you recall three commercials from the last show you watched? I can't either...


An article I read a few days ago from the Globe and Mail completely changed how I thought about television commercials. If television commercials are so ineffective, then why did 30 seconds of Super bowl air time sell for a record price of over three million?


I then realized I have it all wrong. I am not being specific enough about the ineffectiveness of television commercials. What I have been meaning to say, is that the effectiveness of television commercials is seriously reduced when the audience is indifferent between watching the programming live or recording the program to watch at a later date. 

The Super bowl is watched by millions of fans in real-time. Therefore, many fans are sitting there, glued to the television set, intently watching both the programming and the commercials. This is also true of the olympics, various sports programming, the news, and popular reality TV shows. 


Are television commercials still effective? Or are you simply increasing your cost per customer acquisition?

You're All Thinking It.

"Innovation distinguishes between a leader and a follower."

 - Steve Jobs

As you probably already know, Steve Jobs recently resigned as Apple's CEO. Pretty startling news saying that Apple is dominating in the smartphone market, and seeing major success with its Ipad.

Do leaders really determine the success or failure of a company? Or is a strong team of hardworking, dedicated employees with innovative ideas enough to maintain number one market share? 

Jobs' leadership has had significant influence over the Apple brand throughout the years. There was a time when Jobs left Apple, but later returned as CEO in 1997. Six months after his arrival, the Apple brand seemed to take off. Prior to his return Apple was struggling financially- they weren't profitable.

In 1998 Jobs was able to restore profitability and significantly increase sales through launching a marketing campaign around the slogan 'Think Different.' This campaign spread the idea that people who used Macs were "dreamers that could change the world." While Microsoft was focusing on selling the attributes of it's products, Jobs was focusing on the feelings associated with the purchase and use of his products. (As I blogged about before, if you can tie an emotional feeling to your product, you have a winner).

        How does this tie into leadership? 

This summer I read the book Onward, written by Howard Schultz, CEO of Starbucks. He spoke about how Starbucks lost its way after he resigned as CEO. It was not until his return as CEO that the company started to see the same successes they had once been familiar with. I'm wondering if the same will happen with Apple. We've seen a strong correlation between Apple's success and the return and resignation of Jobs as CEO. 

        Will Apple continue to 'Think Different'? Or will they slowly creep into the status  
        quo? 

Pita Put Off

I love the Pita Pit. I think they have a lot of good things going for them. They have capitalized on the healthy eating trend and established their retail locations when this trend was exponentially gaining popularity. Not only have they capitalized on the biggest nutritional phenomenon of the decade, but they have a slogan that says it all:

"Fresh Thinking, Healthy Eating."

Well yes... Their ingredients are fresh and their product offerings are healthy; but I'm not sure about the "fresh thinking" aspect when it comes to their advertising efforts. Below is a picture that I snapped with my camera phone during my weekly visit to my local Pita Pit.  

I've been visiting the same location all summer on lunch hour, and this sign has been bothering me for the past four months. Well, it's not just one sign, there are actually ten of these signs. 

So what's wrong with them?

These signs are located in front of Pita Pit parking spaces. By the time I see the sign, I've already made the decision that I'm going to Pita Pit to devour delicious food. These signs aren't compelling me to buy more pitas, and they're not driving me to visit Pita Pit when I wouldn't have otherwise. Therefore, I see these signs as a waste of Pita Pit's advertising budget.

Assuming that each sign costs ten dollars, that means that this location spent approximately 100 dollars on these signs. I know it doesn't sound like a lot, and in the scheme of things, it isn't. However, this 100 dollars could have been used effectively. For example, Pita pit could have given away ten free pitas spontaneously throughout the year. Imagine walking into Pita Pit, ordering your pita, reaching for your money, and the cashier saying "Don't worry, this one's on us." I think that this approach would evoke one of the two following emotions from customers:

1. The customer would insist on paying, and think that it's absurd that they are trying to give you a free pita. 

Or

2. The customer would be more than grateful to accept the offer, and enjoy the delicious, free food.

Regardless of what reaction the customer has to this offering, they would most likely tell a friend, family member, or colleague about it; therefore helping to spread positive word of mouth about Pita Pit, and achieve more than a 12" x 12" vinyl sign ever would.

Fix Or Repair... A Toyota?

Brand association is anything which is deep seeded in the customer's mind about a brand; whether it be positive or negative. Brand association can really help improve the image of a business, or drastically hinder it. For example, Donald Trump licenses his name to numerous different business projects. In one case, he had licensed his name to a real estate development in the states. The real estate development ultimately failed, and investors in this development were outraged- 'I thought Trump was behind this, how could it fail?' When in reality he had nothing to do with the development, rather than the name "Trump" falsely backing up a poor business venture. Poor judgement calls (like this one on Trump's part) can seriously devalue a brand. 


Enter Toyota and Ford. They recently signed a deal to jointly develop gas-electric hybrid trucks and sports utility vehicles (SUVs).  To me, this sounds like a great partnership!... For Ford, and not Toyota. Is this a poor judgement call on Toyota's part?

Here are the details of the deal:

• Ford and Toyota will share development costs in order to make the technology more affordable for customers and bring it to market faster [than if they had both pursued this development independently].
• Will help both companies meet more stringent fuel economy and pollution standards in the U.S.
• Toyota gas-electric trucks/SUVs will have same engine as Ford gas-electric hybrid trucks/SUVs

Areas for concern:

• Ford has many negative brand associations. There are numerous acronyms for Ford, such as: Fix Or Repair Daily, Found On Road Dead, Fast Only Rolling Downhill, and Fork Over Repair Dough, just to name a few. (Visit http://www.abbreviations.com/FORD for more acronyms).
• Toyota has a strong brand image; an image of reliable and well built automobiles. Toyota has engineered it's operations to produce quality products, and as a result, they have seen huge financial success. Ford on the other hand, has not seen the financial success of its Japanese competitor. 

I believe that Toyota doesn't need Ford, but Ford needs Toyota. The only benefits that Toyota is receiving from this business partnership (in my opinion) is the increased speed to market and reduced costs. But in the end, if you have number one market share and are producing the best product, who cares about reduced costs in the longterm?