Why saying ‘sorry’ results in more customers

Its funny, but we are amazed at how many Brands complain about poor customer retention or negative reviews online but when you look into things further, they haven’t actually resolved the issue in question or made any attempts to listen to the customer and make appropriate changes to avoid similar instances happening again.

In a recent survey we conducted of 800 shoppers, out of stock products and pushy/rude staff were the most annoying factors when it came to their shopping experience, and for many, price was not even a major factor. What is clear is that no matter how good an experience a brand provides, customer complaints will always exist. The way a complaint is resolved is critical to the reputation of your brand. Successful Brands proactively demonstrate a genuine desire to resolve the problem and explain the steps they take to resolve the customer’s problems.

We often recommend that Brands implement a Severity Index to deal with the most pressing issues first. This enables them to see where the really major issues lie in the customer experience and thus where to focus their efforts and attention first as often, customer complaint analysis involves so many factors, most businesses don’t know which problem to tackle first.
 
Customers want to feel that they have been listened to and recognised – it isn’t just about money – in our experience customers with a genuine problem will be happy to accept a lower value of compensation if they feel they have been listened to. Demonstrate that you are listening. Show that you understand. Ask the customer how they would like the matter to be resolved. If you can show that you have listened and made it clear that you have taken action then you have the opportunity to generate advocacy - if you go “over and above” the customer’s expectation then customers will advocate your brand more than they would have before they had the problem.

Sleeping out for Crisis

 This Saturday I will be one of a number of people who will be sleeping rough to raise money and awareness for Crisis – the national homeless charity.

If you are homeless or living in hostel accommodation, Christmas can be a lonely and depressing time. For the past 38 years, Crisis Christmas has alleviated that loneliness. It provides Christmas Centres across London from 23 – 30 December that offer vital companionship, hot meals and warmth, and a wide range of essential services that homeless people often miss out on.

Did you know that...
•    Last year 3500 people slept rough in London.
•    The life expectancy of a rough sleeper is just 42
•    Homeless people are 13 times more likely to be a victim of violence
•    More than 12,000 people have been housed through Crisis since 1997

Donating through JustGiving is simple, fast and totally secure. Your details are safe with JustGiving – they’ll never sell them on or send unwanted emails. Once you donate, they’ll send your money directly to the charity and make sure Gift Aid is reclaimed on every eligible donation by a UK taxpayer. So it’s the most efficient way to donate - I raise more, whilst saving time and cutting costs for the charity.

Please visit please visit http://www.justgiving.com/sleepout4crisis to sponsor me.  You can also visit http://www.crisis.org.uk to find out more about Crisis.
 

Are Marketing Directors scared of the truth?

Marketing Directors who want to understand their customers better should simply spend more time in store, so why don’t they?

We often hear many Marketing Directors say “I’d like to do store visits but I haven’t got time”, “I know all I need to know about my customers from my market research”. But that Management Information is at best going to be several months old and in a rapidly changing and evolving economy, that data is likely to be outdated already. In reality, I believe that Senior Marketers are scared of what they might hear if they did go in store.
 
Whilst monitoring customer sentiment online is a necessity and a more current way to keep track of brand sentiment, nothing can beat actually speaking to customers and employees directly and finding out what they really think. In reality, Marketing Directors should spend a minimum of 2 days a month; out in stores and that all members of marketing teams should spend at least 10 days a year in store, but that very rarely happens.
 
Store visits are not just about talking to your customers, (although this is vital) but also getting feedback from store teams and observing customers. Do they read your point of sale? What types of customer are coming to you? Who leaves with nothing? Who only cherry picks promotional items? Where else do your customers shop? How easy is it to shop the whole store? What could you work with Operations on to optimise the customer’s experience? What products and brands do your customers want that you’re not stocking? Is a lack of product availability frustrating your customers and sending them elsewhere? It is these questions which are often not fully answered through traditional Management Information processes and is why having a presence in store is so vital.

Consumers show web is King

 With Christmas just around the corner, we are urging retail brands in particular to take stock of the changes happening in the sector and adapt their strategies to take account of the multiple influences that are now affecting consumer purchase decisions, in particular the use of the web as a place to gain insight prior to making a purchase.
 
In one of our recent whitepapers, we revealed that traditional consumer insight methodologies are no longer sufficient in understanding buyer behavior and brand owners need to have a significantly deeper level of understanding of what motivates and influences consumer attitudes. A customer that has a good experience will typically tell 3 to 5 people, but a customer who has a poor experience will tell more than 20. When this is trend occurs via the web, these numbers can rapidly multiply and could spell disaster for brands that don’t have strategies in place to combat online negative chatter.  

A couple of months ago, we quizzed over 800 consumers about the influence of online reviews on their purchase decisions during August and September, and revealed that they relied heavily on online reviews for:
 
Consumer electronics                  56%
Home Furnishings                       33%
Apparel                                      21%
White Goods                              45%
DIY & Gardening                         18%
Entertainment Products              12%
Sports Goods                              9%
Food                                           2%

But this isn’t just about adopting trendy new social media strategies or having a fan group on Facebook. It is about directly interacting with your customers wherever they choose to have conversations about you. Customers expect and want to engage in two-way dialogue with the brands they use. The Internet should not just be viewed as a sales channel or an additional way to advertise your brand but as a method of communication.

Why Listening Should be your First Social Media Objective

 It is increasingly apparent that brands that have created relationships with influential bloggers have developed powerful and effective advocates, who have helped extend the influence of the brand's marketing activity, often way beyond that possible with more 'traditional' marketing activities.

This approach (sometimes referred to as 'Crowdsourcing') has been used to cut the development time and cost of bringing new products to market and, for those who consumers are involved, helps create even more brand loyalty.

Out there in blogs, forums and in all sorts of places consumers are expressing real frustrations and, hopefully, joys and ideas about brands.
Listening to these consumers online enables brands to tap into what they are saying about the brand: spontaneously and not mediated through a research process. They will hear exactly what they think and, if they use the right approach and technologies, be able to assess how many people are expressing this sentiment and how influential they are.

It is widely accepted that consumers will continue to use social media to actively take control away from brands; a trend that will only increase.
Listening to consumer sentiment about their and their competitors' brands allows companies to track discussions, understand sentiment, identify influencers and use the resulting insights to improve the effectiveness of marketing and customer service.

Ongoing listening to sentiment does not have to be an expensive exercise.
It compares favourably on cost with research methods, such as tracking studies, that brands may know well because they've worked with them for years, but these were never created for an age in which sentiment can change in a day, and you might know nothing about it.

Is a competitor on the horizon for the Post Office?

There has been much debate in the press regarding the impact of the strikes on the Post Office’s reputation but I wonder how much thought has been given to all the businesses that rely on the PO to deliver on their behalf? Amazon for example, have an exclusive distribution agreement with them and the continued postal delays are having an equally detrimental effect on many brands which rely on the Christmas trading period to buffer sales through the rest of the year. For some, sales during Oct-Dec make up 70% or more of their annual profit and it will be their brand reputation on the line as much as the PO’s.

Ironically, some brands are taking active steps to help reduce the impact on those who rely on the postal service like Ebay, which has temporary altered its feedback mechanism so that you can no longer rate sellers on the speed of delivery. But let’s face it, many businesses are struggling to survive the downturn and initiating strikes which could potentially put more out of business is likely to damage the PO’s reputation, perhaps permanently.

What is clear is that the longer it goes on, the worse the impact will be on the PO’s brand reputation, but to be fair this means little as what alternative do we have for consumer mail? All of this would be far worse for the Post Office if they had a direct competitor so maybe it is time to open up the market a little.

Richard Branson might be interested?

Building Brand Advocacy – too late for Christmas?

Retailers across the country will be now be fully prepared for Christmas trading and many will be working towards 2010. Targets based on last year’s performance will vary. The economy is showing (albeit slow) signs of improvement and initial predictions for the Christmas trading are better than would have been expected 12 months ago. We often advise the brands we work with to evaluate just how successful they have been at building brand advocacy through the year before their busiest and most profitable time of the year.

One of the problems facing retail is that there are multiple influences – not only the economy and the continue increase in Tesco’s market share, but also technology and consumer expectations of brands to engage with them on specific issues and to conduct their business in an ethical, responsible and sustainable way.

Traditional marketing is dead. Advertising media has fragments and PR is much less impactful than in the past. Consumers see more communication messages each day than they have ever before and are increasingly cynical. Technology means that every consumer is now an opinion former. Successful brands have to focus on their reputation to increase their brand value and improve commercial performance.

So is it too late for some brands to build advocacy in time for Christmas?

Yes – it takes time to build advocacy and whilst even in the current economic climate, price, whilst still a key consideration, is not viewed by customers as the most important aspect of the whole customer experience. Brands need to focus on delivering the best possible customer experience. If this is done successfully then retailers can expect higher levels of advocacy for Christmas trading 2010. We have just released its whitepaper ‘building brand advocacy in retail’. If you’d like to read more about this subject you can request a complimentary copy by contacting enq@brandrep.co.uk

Global Brands Should Look at SME’s for lesson in Brand Reputation

Why is it that small and independent customer facing businesses often understand the role and importance of brand reputation so much more than larger brands? These smaller brands seem to have a much clearer idea of how their brand is perceived than larger brands do. What is it that causes larger brands to behave this way? Is is corporate arrogance? A tradition of the small business?

Only last week, I discussed the emergence of ‘Google-Enabled Choices’ and the fact that just three negative reviews are sufficient to deter consumers from purchasing and this is a classic example of how the web can cause negative brand perception to spread like wildfire amongst consumers globally, and all whilst the brand goes on thinking its reputation is impeccable because its annual Corporate Responsibility report says so.

Reality Check. Your brand reputation is only as good as the word of your customers and so how the brand is perceived by all of your stakeholders and this is something that means more than corporate views on what they think their brand reputation is.

I thought it would be interesting to find out your views on this so please do participate in my poll.

Educating the consumer

This week has been National Consumer Week and on closer inspection saw that the focus this year has been about businesses knowing about their consumer’s rights. This struck a chord with us because we know only too well that when it comes to managing brand reputation, or more to the point, managing disgruntled customers, knowing where you stand is critical to managing the communications process and minimising brand damage.

The increasing use of the internet as a place to voice opinion means that more than ever, brands need to manage their customers needs and expectations in a way that leaves customers feeling satisfied and not inclined to chastise the brand online. Consumer rights, trading standards, sale of goods act etc, it’s all pretty standard practice in business but vitally important that brands really get to grips with what these actually mean and potential implications for the brand as well as complying with legislation. In addition to this, consumers are often misinformed about what their rights actually are or make assumptions about the remit of trading standards and this can often lead to entirely avoidable conflict between the brand and the consumer.

Consumers respect brands that are open and honest, and it is this honesty that breeds trust, loyalty and advocacy. The strongest brands will be those who take the time out to educate their customers on what their rights actually are, whether this is online, in print or via a telephone helpline. By providing this transparency and vulnerability, brands will instantly nurture feelings of trust from their customers, who will feel that the brand is genuinely going the extra mile to try and keep them informed.

When brands are devising their customer communications strategies, we typically advise them to look at their brand from the perspective of a customer, identify areas that they may question or perhaps could be misinformed about and find ways to educate customers. A brand that shows it has its customer’s interests at heart will gain the trust of their consumers, who will be more likely to stick by them in the event that something does go wrong, rather than resort to smearing the brand online.

Change happens...

 As we enter into September and leave the "silly season" behind, our attention has been drawn back to brands who may now be knuckling back down into their strategy and planning for next years campaigns. With this in mind it is probably the time to remind brand owners of the importance of up to date consumer insight and why it is so important to take the time to find out exactly what it is that people think about the brand in the current climate.

A lot has changed in the past 18 months and so any consumer data that hasn't been gathered since this time is probably not likely to help as much given the changes in the economy. Although there are signs of recovery reported, it is unlikely we will never go back to where we were before and consumers have different mindsets than they did before the recession.

Now it is true that some brands have weathered the storm pretty well and are even stronger than before, but equally, some brands that it may be thought would be around forever have crumbled and many smaller brands have fallen off the map completely. But probably the biggest shift has been that big brands are no longer necessarily King and many smaller brands are now able to pose quite serious competitive threats to brands which previously were in a completely different league, at least in terms of consumer perception.

Marketers need to remain aware of the environment that the brand is participating in before they can create an appropriate brand building strategy. We've seen a noticeable increase in the number of clients using our monthly Sentiment Reports, which help them to monitor what is being said about their brand on a month by month basis and in the current climate it is this kind of frequency that is needed to fuel a successful post-recession brand strategy.

This week sees the release of the latest Nationwide Consumer Confidence Index and brand owners should use this as an opportunity to take a good look at what customers think about their brand right now, because what they thought last year is frankly irrelevant. And if they find that their messages aren't hitting the right notes with them, they need to start finding opportunities to engage with their customers in ways that do.

Who’s King of the Breakfast Bowl?

This week is Kellogg’s National Breakfast Week, which will now doubt be reminding consumers of the health and dietary benefits of eating breakfast every morning. Cereal brands have probably one of the most difficult mix of consumer interests to satisfy.

A few months ago, one particular cereal brand was considering removing all of its cardboard packaging to become more environmentally friendly and help reduce their carbon footprint. Great you may say, but then with the upcoming salt reduction campaign from the Food Standards Agency, consumers are bound to expect these same brands to also stand up to the line and pledge to reduce the salt content in their cereals.

Cereal brands have the biggest challenge because their customer base includes both adults and children, both with completely different interests and desires from their breakfast cereal. It is a long known fact that children tend to be the influencers for the purchase of particular breakfast cereals, yet as the purchaser, the adults still need to be happy that it is reasonably healthy and suitable to give to their children. Along with this, you then have issues which are of interest to adult consumer buying for themselves, such as price, eco-friendliness and taste (with less regard for salt or sugar content).

Any consumer brand should be transparent in their messaging to their customers including cereal brands. No brand will be good at everything or get everything completely right and deep down, consumers get that. The secret is to show them what you are doing right whilst accepting areas that need improvement and detailing how you intend to address these issues in the future. Being open and honest about the brands strengths and weaknesses displays a vulnerability that consumers appreciate and respect and helps create trust in the brand.

Consumers are loyal to brands they trust, so work on the trust and the customers will follow.

Will another market smell as sweet?

This week marks the launch of Stella McCartney’s new floral fragrance STELLA NUDE, the latest in a long line of fashion brands, celebrities and pop starts to release their scents onto an awaiting mass market.

Many brands have been successful in adding a fragrance of two to their portfolio, however any brand looking to enter this market for the first time should really take a look at the effect on the brand of adding a retail fragrance as it can be both positive and negative.

The biggest danger for a top level brand expanding into perfume is that it can sometimes serve to downgrade the brand to a lower retail standing. If you look at many of the brands on the market associated with fashion brands, the price points for the perfume aren’t particularly high and so it is questionable how this readily available and affordable way of accessing the brand sits with a brand message that is supposed to be seen as ‘luxury’ and ‘aspirational’?

It could be argued by some that CK, Diesel and even Jean Paul Gautier have traded some of their brand value for an increased presence on the high street and has that done them any favours?

The Adidas Legacy

On the 18th August 60 years ago, Adidas registered its trademark three stripes. What is it that makes the brand so successful over what is an undeniably long tenure in the fashion world?

When you look at the Adidas brand over the years, it has certainly has its up and downs. Despite early success, the brand suffered in the early 90’s due to the marketing efforts of brands like Nike and Reebok, which became the fashion choice of the next generation. These young consumers viewed the Adidas brand as an older, more traditional brand associated with their parents generation and it just didn’t hold the same modern, funky image as other sports brands of the time.

However the Adidas legacy is now stronger than ever and is positioned as the brand of past and the present. They seem to have found a successful way of merging tradition with modern interests and their core proposition of Originality.

They have adapted the brand to encompass the needs of a changing audience whilst staying true to the brand’s original values. In the early years, their focus steered more towards associations with major sporting events and celebrity endorsements, but are now moving towards collaborations in the music scene which can permeate a number of age and cultural groups to achieve maximum engagement.

This point is about recognising when it is time to reposition a brand to keep in tune with the needs and desires of customers. Brand heritage is an extremely useful asset in building long term brand reputation, but equally, brands must adapt and recognise that the market is changing and expect brand evolution. Change is inevitable and customers are invariably fickle, so brand owners should never assume that brand legacy alone is enough to survive the test of time.

Don’t come down too hard on Tesco...

Having seen the recent news item on Tesco misquoting their carrier bag reduction figures we think it shouldn’t detract away from the other eco-friendly achievements and positive initiatives that the company has put in place.

Even though the percentage was inaccurate, Tesco has been actively working to become more socially responsible, particularly through the use of their clubcard points loyalty scheme to reduce the number of carrier bags being used. Tesco hasn’t really performed any worse overall than any other supermarket brand in terms of carrier bag reduction, but one simply misrepresented figure has brought the spotlight onto them.

It does raise the important issue of honesty, integrity and transparency when it comes to maintaining brand reputation though. many brands are trying to jump on the eco-bandwagon, only to be exposed for greenwashing later down the line. We don’t believe the incident with Tesco counts as greenwashing but it should certainly send a warning to other brand owners to ensure any messages (and especially green or community-action related ones) are accurate and remind them of the benefits of having a consistent brand management strategy in place to prevent things like this happening in the future. And no before you ask Tesco are not one of our clients.

Brand Reputation isn’t just for the Large Brands

It has become clear that many smaller brands feel that investing in building brand awareness is only something for large brands and isn’t really accessible to them.

Smaller brands should be the last type of company to think about cutting their marketing budget in the current climate. The problem is that they usually need to invest larger percentages of their turnover to compete against their larger competitors and so it can seem like a far riskier decision than that made by larger brands. The idea of increasing marketing spend is likely to be counterintuitive to many small and medium sized business owners, but failing to invest is a wasted opportunity and risks jeopardising the viability of the business going forward.

Brand reputation cuts through company size, location etc. Some of the biggest brands on the high street have disappeared in recent months, paving the way for smaller businesses to get a foothold and build valuable market share. SME’s are being given a golden opportunity to gain a presence and need to take advantage before the market improves and prices inevitably rise.

Rather than shying away from activities like advertising, smaller businesses should aggressively look for opportunities to reach their target audience through this medium. The cost of advertising media is the lowest it has been for several years, which means that SME owners can get a greater ROI than they would have got 18 months ago. Combine this with a larger investment and they can achieve greater brand awareness and cut through compared to their larger competitors.

If you are evaluating your marketing budget, spend some time considering how activities such as advertising, pr, exhibiting and direct marketing could help you build brand reputation. The pay-off is likely to be well worth the initial investment.