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Customer Service is the face of any business. Happy and satisfied customers is a prerequisite for customer retention and creating a positive image for the company. Success of any business highly depends on the services packaged with their products. Whether it is a software program which is developed to provide the services or a customer support representative providing support to the customer, it is very critical not to mess things there. Customer Service should be aligned properly with Marketing, Finance, Product development and other critical operations of the company to make sure the customer is getting served to the optimum standards.

Why is it so important to get this right? Well you can draw parallel between designing and customer service. If anything (be it a complex entity like building, vehicle or software application, or something as simple as a can opener) is designed perfectly, no one notices it. It becomes part of the regular work-flow. But if there is some flaw in it, something that is not as expected or intuitive, it gets highlighted. Same happens with customer service. Everyone expect is to be seamless. So as far as the customer is getting the service he expects, no one notices it. But as soon as the customer service experience is bad, the customer satisfaction index towards the entire company and its products dips down. That’s the nature of the game and everyone needs to accept it.

We can lay out some basic rules any company needs to follow to provide good customer service. First and foremost, don’t experiment in this area. It’s really astonishing to see how companies provide disastrous customer service just because they are experimenting with some cool new tool or technology in this area. The most common example that pops in my mind is speech recognition software to answer the customer calls. That’s a major disaster. Everyone in the software industry knows that the speech recognition technology is not yet ready to deploy as a dependable tool. Still companies use it in answering customer phone calls. No customer in the World is going to call you till they are in dire need of help and then when you ask them to speak the details, and try to interpret it with something which is not perfect, you are basically forcing them to blacklist your company. So let’s first make sure the technology we are using is sound and then use it on the customer. I think this is the last place you got to experiment.

Rule #2, don’t drag the customer to the tipping point. I think the entire reason a company has customer service is to keep the customers happy. A company should put a face in front of the customers so that the customers think that the company appreciate their business, not that you are one of zillion customers we have and we don’t care if we lose one. For instance, try to keep the wait time to a minimum. Companies should deploy good analytical tools to make sure that a customer is not holding phone for ever to be answered, or waiting for technician or delivery personal for too long to show up. Along the same lines, charge your customer reasonably. Asking insane amount of money to help a customer fix his computer on phone if it is out of warranty, or to use a feature that’s not covered in the customer’s opted plan is like burning bridges with them. This is like literally dragging the customer to the tipping point from where they have no option but look for alternatives. I understand that cost is important for the company to take into account, but showing some compassion over here might lead to a long term trust relationship with the customer.

One more thing that’s important in customer service is that the entire company should take this as a priority and stick to the commitment made to the customer. How often do you reach an airport to find out that the plane is overbooked and they don’t have space for you? Or your flight got cancelled for some “unknown” reason with no alternative but to wait? Or you reserved a rental car and that type of car is not available ( Or in Seinfeld’s World – they know how to take reservations, but they don’t know how to hold ’em.)? This should never happen. If as a company you are committing something to your customer, you need to stand behind it. Every company should have system in place to fulfil the commitment made to the customers.

In short, go an extra mile to keep the Customer satisfaction high, because you can have great products, awesome supply-chain and what not, but if you don’t have a satisfied and happy customer, you can not succeed.

Since my blog post about Rights and Wrongs of Brand Extension, I have had lot of interesting discussions on this topic. Some very good thoughts came forward and we were able to classify all the brand extensions we talked about in right and wrong buckets using the three things mentioned there – creativity, innovation and link to existing product line. One point that again and again came forward, which is also the reason for me writing this post, was how a company that had wrong brand extension could have done it correctly? So let’s pick the two wrongs mentioned in the previous post – Amazon and Dell.

Amazon missed two (of the three) very important things in its brand extension, and that were the link to the existing product line and innovation. Here’s an online book store that got famous for its long tail and recommendations. Logically thinking, brand extension for this online store would have been selling products where the long tail and recommendations matter the most. Another logical brand extension would have been showcasing products similar to books to customers who came to their site looking for books. This suggests Amazon should have evolved into an online store selling and renting (in some cases) books, music, videos, computer and video games and software. I think by keeping this link to existing product line in mind, they could have fixed brand extension to a large extent. Trying to sell products like shoes, jewelry, grocery and pet supplies from their online store just broke this link and made it loose its essence. One could argue that this could have limited Amazon from going into a large part of 35 product categories they are involved in today. Well I think, keeping Amazon the extended book store to the products suggested above and spinning partner stores for these other product categories would have been a better idea. Amazon could have had distinct links to these stores from their original store landing page and search results in order to use the credibility and dependability of Amazon, may be shared the shopping accounts and user information and applied some of its innovative shopping experience to these other buckets. The important thing to note here is the segregation to prevent bad experience for a customer coming to the book store.

Another area that Amazon could have fixed during brand extension is innovation. Amazon, which rided on its innovative stinct all through the dot com boom and bust came up with no major innovation in brand extension. Along with creating an extended book store and partner stores, one innovative step Amazon should have taken in brand extension is segmenting its stores more on the customer intelligence and less on product categories. For example, a customer looking for Mystery novels would feel Amazon is a store for me where I can find all Mystery based books, videos and games to buy or rent, a community to get involved with others with similar taste and an extended search feature with categorized results around what I am looking for. Amazon does it to a great extent, but its not well meshed across products due to the wrong brand extension.

Moving on to Dell…I know lot of people believe that Dell did not fly off with electronics because Dell’s primary customer base was enterprises and not home customers. But I think, if Dell would have brought the kind of innovation and creativity they brought in selling computers in the field of electronics, they would have done much better in their brand extension. Dell evidently missed creativity and innovation in its brand extension to electronics. Dell is known for two things – Direct marketing to the end customer and build (or configure) your own personal computer. It went on to brand extension to electronics, a somewhat natural next step for the biggest computer maker in the World after already extending its brand in servers, storage and printers. It did link back to its computer product line by selling directly to the end customer, but the build your own stuff was not there. Well if you are Dell, you got to have that personalized experience in there to satisfy your customers.

How about trying to add it to electronics? I think it will be really creative if you ask your customer to take steps with you to build a digital camera instead of asking them to choose one from the given list of cameras. Literally speaking you don’t have to build one for each customer out there, what you can do is start from the most basic feature (say megapixels) and provide options (like optical zoom, digital zoom, screen size and memory type) to choose from to reach to a final model. It’s basically bringing the customization experience from the personal computers and applying it to electronics. In order to make this happen, Dell will have to (or make the equipment manufacturer they are partnering with) support enough options in each category to meet the customer needs. If Dell is successfully able to do this in electronics like cameras, MP3 players, televisions and so on, it will be a real innovative step to empower customers configure their own electronics leading to a successful brand extension.

Exercise to the reader ;-) please send me cases of brand extension, both successful and unsuccessful, which you think contradicts my thinking on this topic.

There’s not a single marketing magazine or blog out there which has not sung praises of the Virgin brand. And the more I read about Virgin and Richard Branson, the bigger fan I become of both – the brand and its chief. While all the big airlines are going down, Virgin is still thriving. And it’s not only in the airline business, the Virgin Active – its European health-club chain, the Virgin Mobile USA – brand’s extension in cell phone business and many other ventures by Branson are doing great globally. So what’s the secret recipe? Well taking a close look at the brand activities make it very clear…for Virgin, customers come first and there’s no compromising there. Virgin doesn’t give a crap to what the industry trends are, if the customer wants it, Virgin will have it.

Sir Richard Branson is a true visionary. What he thought and implemented two decades ago is now slowly getting followers – people should be having fun when spending their money. He gives great importance to customer satisfaction. And how does he do that? A real simple concept – “put yourself in the customer’s shoes and think is this the way I want to be treated if I were the customer?” Most of the innovations which he brought in his business were based on his own experiences as a customer. Flying in any major airplane was, and is, a really lack-lustrous affair. You are tied to your seat for the whole time, everyone around doing their own stuff and feel really relieved when the flight is over. The same was the experience with Branson. So when he came up with Virgin airlines, he made it a real party airlines…Virgin has fun-loving attendants, stand-up bars and massages and nail treatment onboard! When all the airlines are showing movies to the customers as per their (Airline’s) choice and schedule in the seatback video screens, Virgin went a step further and gave the customer right to choose from the library of on-demand videos. Any market research would have negated the expensive services Virgin provides onboard, but just because customers want them, Virgin provides them, and they thrive.

If you think Virgin just got lucky in the airline business, look elsewhere. Virgin had the same customer focus in its brand extensions and that helped them blossom in those industries as well. It provided customers pay as you use plans for its health clubs in Europe, Virgin Active, instead of locking them in contracts. The customers loved it and Virgin Active became successful. Virgin Mobile USA provided its customers with prepaid cards with no service agreements and contracts. Result – more than 4 million customer base. Both are great examples of customer focus. We can derive a pattern of Virgin’s way of doing business – enter an industry where customers are not satisfied by the existing services, think yourself as the customer and look for pain-points, keep the focus deep on customer needs and strive to provide them with satisfaction.

Moral of the story – take a look at whatever business you are in and ask yourself, if I were the customer, would I be happy and satisfied? If the answer is no, plan and implement changes. If the honest answer is yes, you are set to succeed the Virgin way!

Lot of times we see a company with a strong brand equity in one product grow exponentially when it takes that brand name and extend to other products. Examples that stand out are Apple and GE among others. At the same time, I can point out companies with a strong brand in one field and start going down as soon as they enter another fields. One that comes to mind right away is Amazon. I don’t know how much of their bad days are due to the extension of their product line to everything, but I (and lot of people will agree) that the pleasure of buying books at Amazon is not the same after all the remodeling they have been through. There is a third set of companies, which don’t fall in either one of these sets. They are the ones which use their brand to extend on to other product areas, the new products don’t catch up well, but at the same time the original product that built the brand remains solid and enjoy the brand loyalty. One example I would point is that of Dell. Dell is still the largest PC maker in the World but the numbers of their television and mp3 players are not that impressive.

Here’s my take on the rights and wrongs of brand extension (yeah I know there are a zillion case studies out there, but lets add one more). I think the companies succeed in brand extension if they apply creativity, innovation and link with existing product line during and after brand extension. Lets talk about Apple. Apple Macs and notebooks were always known for their cool factor. Though not adopted widely in the main stream (thanks to the tight hardware-software company and to certain extent Microsoft), the Apple computers were always liked by the people more involved in right brain activities – the artists, musicians, film makers etc. Apple took that same cool brand image and applied it to ipods, itunes and a lot more i…s to see the reemergence of the company with a bigger bang than ever before.

Creativity – same look and feel. The white color scheme and the sleek design.
Innovation – Arguably the best music player and music downloads site out there.
Link – Same hardware-software combination that Apple is known for, but this time it’s a bit loose coupling (they applied this loose link to Mac as well now, which is really the step in right direction).

Now lets switch to “the long tail” store on web. Amazon has been the model book store, or to generalize, the e-commerce site on the web. They are known to find the customer what book they are looking for as well as recommendation based on data-mining the information they have through the pool of customers visiting their site daily. There’s no denying that they are one of the best-managed content store on web. But the Wall Street view of the company and customer satisfaction numbers have been down stream since they started their brand extension to be a general store of everything, not just books. So what went wrong? I would attribute it to a couple of things. One, Amazon just turned out to be another humongous Internet store which sells everything. The uniqueness which Amazon had, to be a store for book lovers is lost. So by trying to be everything to everyone, they are turning out to be nothing to anyone. Another reason, the innovative idea of recommendations is all lost when it comes to the new areas like kitchen supplies and groceries. That was what Amazon was known for, and they lost, or at least misplaced that entire concept.

Creativity – Same “the long tail” concept of finding things you cannot find in physical stores.
Innovation – Pretty much nothing…hard to distinguish from other Internet stores when it comes to more general shopping.
Link – The recommendation link is all broken when it comes to the new marketplaces.

The third set of companies are the most interesting ones. This happens when a company has solid marketing plan for the existing product market, and then tries to go in for extensions. So the original brand product is not disturbed but the new ones don’t fly for some reason. My favorite example in this case is the Direct marketing place – Dell. As much as I love shopping (or at least configuring) a computer at Dell, I am indifferent to the entire new store they have to sell all sorts of electronics. But what Dell managed to do, that Amazon missed, was to keep the experience on the computer store intact. Still Dell is primary known as a computer store that also sells some electronics (to draw contrast with Amazon which is now a store that sells everything, that includes books as well). So what went wrong with the brand extension to Electronics? What I think happened is that people didn’t find what they were looking for in electronics at Dell. When someone goes to Dell, they expect to get a personalized shopping experience. Dell created this amazing build your own computer scene, so when it came to electronics, and they tried to a certain extent one size fits all, people didn’t buy that, or at least didn’t buy that from Dell. Again…

Creativity and innovation – Nothing can be pointed out as far as selling electronics.
Link – Well “Direct from Dell” is still there. But the link of configure your own is gone, or at least diminished a lot in the new space.

So as to sum it all, brand extension goes right if Creativity and Innovation are properly used in the process and the basic link to the original product of the company, or what the company is known for, is maintained intact.

Sales…not Marketing! Many companies focus on sales more as compared to marketing. Marketing and Sales are two entirely different concepts. Sales focuses on the needs of the seller while marketing focuses on the needs of the buyer. Sales is preoccupied in converting the products into cash, marketing is done with the idea of satisfying the needs of the customer by the means of products and a host of services attached with it. Any company that focuses on getting rid of the products through various sales techniques are sooner or later going to be in real trouble. In computer science equation, we can summarize that as –

IF (EXISTS (Sales Focus))
POISED TO BE DOOMED

Well you will argue with me that’s not the case. Many companies just focus on selling their products and succeed. Yes they may in the short run, or even in the long run if they get lucky. One example that stands out is that of the oil companies. When was the last time you saw one of them aggressively marketing their products? Well may be in the days of Rockefeller when he marketed the kerosene to light lamps. Oil is one unique industry where sales overtake marketing. They really just focus on the product. So the equation changes a bit. It looks like –

IF (EXISTS (Sales Focus) AND NOT (LUCKY AS OIL COMPANIES))
POISED TO BE DOOMED

Why is it so? How come there are few industries that stand out to be so product focused but still are so successful? I am very sure that the customers are not dumb enough to just buy products from companies who focus less on them and more on their products. Let’s shed light back on our oil industry example. What I believe is happening here is someone else is doing all the marketing for them. Yes, it’s the automobile industry, the airline industry, the tourism industry and so on. All these industries are incredibly customer focused. To survive in any of these industries, the companies need to place the customer first. These industries are highly marketing based. And they are in-turn directly or indirectly dependent on oil. Oil, luckily again, is placed in a unique position with no alternate source of energy that can be used for transportation. So how long will oil enjoy this luxury? Well till we do not find an alternate source to run our automobiles, fly our planes and run our cruises…or in other words, not anytime soon.

Bottomline – Marketing is the backbone of any company’s success, and if you are lucky enough to get favors from someone else to do all your marketing, you can survive just by sales.

IF (EXISTS (Sales Focus) AND NOT (Someone else doing the Marketing for you))
POISED TO BE DOOMED