Your Brand is Defined by the Customer Experience, Not the Slogan

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When the 2007 holiday season kicked off a little over a month ago, US-based electronics retailer Circuit City introduced a series of TV commercials focusing on the simplicity of the digital lifestyle. With the ads, Circuit City introduces their latest moniker “Simplicity Guaranteed“. According to Circuit City’s Chief Marketing Officer, the new spots “illustrate how Circuit City makes it simple to Shop (on-line), Buy (in-store) and Enjoy (firedog services) your digital lifestyle this holiday season and beyond”. ”Simplicity Guaranteed” is the latest in a series catch phrases used by the retailer over the last few years. Previous slogans have included “Imagine That” (2000-2001), “We’re with You” (2001-2004), “Just What I Needed” (2004-April 2007) and “Circuit City Makes it Simple” (2005 Christmas Season)

All of these past slogans describe brand perceptions that Circuit City aspired to but failed to achieve. Why? Because a company’s brand is not defined by its catch phrase, logo, aesthetic style or culture. A company’s brand is ultimately defined by the experience they deliver to their customers and Circuit City has been unable to consistently deliver experiences that supported those brand promises.

The latest revival of the Simplicity theme is part of a larger strategic framework that I helped develop for Circuit City a few years ago (you can hear about it here). Making it Easy for customers to shop, buy and enjoy is one of the four key ingredients to the vision my team proposed. We also recognized that delivering experiences consistently supported the “Make it Easy” idea would require significant changes in processes, culture and internal success measurements. Almost two years after those recommendations were made, Circuit City has “re-branded” many of the same operational features that they have been touting for years with the “Simplicity Guaranteed” label, but has not done any of the heavy lifting required to support the long-term strategic vision of sustainable growth through exception customer experiences.

Marketing strategist Scott Glatstein suggests five steps for building a strong brand and optimizing customer experience:

  1. Identify your reasons to believe.
  2. Identify customer touchpoints.
  3. Determine the most influential touchpoints
  4. Design the optimal experience
  5. Align the organization to consistently deliver the optimal experience

Reasons to believe are those things that the customer experiences that support the brand promise. Circuit City has decided that Simplicity is one of their reasons to believe, but they have not executed any of the other steps suggested by Glatstein. Without those crucial components, the customer experience can easily fall short of the brand promise. Here’s an example:

nano.jpgOn Christmas Eve, we decided to purchase an iPod for a relative. In the weekend tab, Circuit City was advertising a free $15 iTunes card with purchase of a Nano priced at 149.99. Electing buy on-line and pickup in the store (A feature that usually does live up to the Simplicity promise) we went to the web to place the order. We were surprised and delighted to see the web price of $142.49, but noticed that there was no mention of the free iTunes card on the web. Here is the first indication of a problem. The tab touchpoint and the web touchpoint are not aligned in terms of the offer. This generates confusion and apprehension for the customer.

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We made the purchase and left, with tab in hand, for the local store. When we arrived, the iPod was waiting for us as promised, but there was no $15 iTunes card. Our concerns about the conflicting offers are validated and we are now entering confrontation zone.

We showed the tab to the customer service associate who wasn’t sure how to deal with the situation. Someone else was brought over to correct the problem. He suggested to “return” the web order and resell it to get the iTunes deal. The CSA did that, but in doing so, the price went back to the advertised price of $149.99. The CSA called the assistant back and the process of “fixing the order” began. At one point, we were told that we owed another $0.70. At another we were going to get $).09 back. Clearly, the front line associates; the ones that come face-to-face with the customers every day, are not prepared to deal with this problem. The processes have not been optimized to deliver a great experience.

With the line backing up behind us, the CSA team finally found a way to make deliver the transaction with the free iTunes card at the price advertised on the website. The total in-store transaction time was over 20 minutes. Our expectations were not met and the other customers in line behind us got to share our experience as well.

So did Circuit City satisfy their 24/24 guarantee. Technically, yes as the web order was ready in less than 24 minutes. Did the experience reflect “easy to shop, easy to buy”? Absolutely not! Circuit City has not identified and evaluated all of their touchpoints against the “Simplicity Guaranteed” reason to believe. They have not designed optimal customer experiences that include these touchpoints, and they have not aligned the various channels and business functions to deliver an optimal experience. This may sound like an isolated incident, but it is not. Where else is dealing with Circuit City not Simple? How about rebates, scheduling an in-home service or getting a product repaired under warranty if you didn’t buy the extended service plan?

Circuit City was once a retail powerhouse. They practically invented the “Specialty Superstore” concept. Today they are struggling to remain relevant in what has become a commodity market. They have to compete with mass marketers like Wal-Mart and Costco who can price aggressively, niche players like Gamestop and Verizon who can beat them at the “authenticity” game and web marketers like Amazon and eBay who can always deliver a better selection and competitive prices. At $4.62, their stock price is trading a 52-week low and is flirting with a 5-year low. Circuit City will have to find a way to build a truly differentiated brand if they are going to survive. Simply adopting a new slogan that says you “make it easy for me” isn’t going to cut it. They must also consistently deliver a customer experience that supports the claim. Without that, the slogan only serves to set expectations that won’t be met and further erode the brand.

Many of you may have shopped Circuit City in the past couple of months. I would love to hear about your experiences and your ideas regarding how Circuit City could improve the customer experience.

Circuit City 2.0 in Second Life

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Looks like Circuit City is finally developing the four island Second Life estate that was purchased back in May ’07. As some of you may know, I was in charge of the Second Life project before my job was cut, so I’m really interested to see if what they build follows the strategy that I proposed.

IBM developed a Circuit City store on IBM10 last December which generated a good deal of press, but like most corporate sims, its usually empty now. The store was never really intended to be a permanent home for Circuit in Second Life. It was primarily for demonstration purposes to allow IBM to showcase what could be done for retailers in SL. The content of the store has not changed at all in the last six months and there has been no effort to develop community engagement at the store, primarily due to contractual hurdles with IBM (its their island).

As a starting point for planning a larger SL presence for Circuit City, I did extensive research on early real world brand entries, speaking with counterparts in other companies as well as marketers, branding experts and others. It didn’t take long for me to come to the same conclusion of many prominent Virtual World observers:

Most real world brands just didn’t understand how to approach the medium.

It would not be appropriate to reveal details of the strategy I proposed as Circuit has not done so and it may not be what they are going with in the end. I will say that the strategy leveraged lessons learned from other real brand builds and was specifically designed to promote engagement on several levels. I have not been in contact with anyone from Circuit since I left, but from the 30,000 ft. view on the map display, they seem to be close to an announcement.

More Thoughts on Sprint

sprintlogo.jpgTo my regular readers, I’m sorry that the blog has gone a little stale over the past week, but I’ve been a bit preoccupied trying to find a new job. Nevertheless, traffic is way, way up on the Sprint post and I have been having lots of great conversations with people who have commented on it. In lieu of a new topic, which I promise to get to this week, I’ll pass on some of those additional thoughts from my conversations. Perhaps if Sprint were a Sense & Respond organization, they would be joining in the conversation or at least be actively listening. My guess is they’re not.

Of all the comments on the post, no one defended Sprint. To the contrary, all but one had negative things to say about them. The other guy just had negative things to say about female cellphone users. Thought certainly not a statistically valid sample, I would wager that few people really love their wireless provider. It’s the nature of the industry in the US. With limited competition due to the high cost of entry, the wireless providers aren’t compelled to differentiate on customer service and in my experience, Sprint is the poor service leader.

You may have noticed that this story has gone mainstream with coverage by the Associated Press, ABC News and Brandweek . The details, if you haven’t seen them are mind-boggling. David Reich wrote a great summary today on his blog, “my 2 cents”, but here’s the big thing to consider:

Out of Sprint’s 52 Million customers, only 1000 received the letter saying they were calling customer support too much. Do the math. That’s less than .002% of their customers. There is no way that that small percentage was adding any material cost to their operation. (update:  As a friend pointed out, the actual cost of these calls could have been material; however, the methodology for counting is unclear.  For example, the ABC story indicates that a single call with 5 internal transfers might have been counted as 5 calls). Sprint says that, on average, these customers were calling in 40-50 times per month. Perhaps that’s true and given my personal experience with trying to get my own Sprint bill fixed, I can appreciate that.

Nevertheless, Sprint made the decision to go after them in a way that became very controversial, very public, very fast. The cost of this action in terms of bad PR is on par with Circuit City’s recent bungle. where they fired 3400 of their most experienced store employees to cut costs. Several months later they are still trying to explain that one, but it’s too late. In both cases, the damage to public perception has been done, although in Sprint’s case, it was pretty low to begin with and their defensive spin machine is just getting fired up. In my opinion, it was a failure of leadership in both of these companies to make such shortsighted decisions without considering how their customers would view them.

One of my conversations this week was with the Conversation Agent herself, Valeria Maltoni. She pointed me to a post she wrote about the wireless business in the US and speculates that Apple may be just the disrupter needed to shake up the industry. It’s a great post and has some David Letterman Top 10 humor to boot.

Niche Marketing: Narrow, Not Small

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An article published today in Advertising Age really resonated with me. It makes the case that the maturing marketplace, combined with the hyper-connected, in-control consumer “has created a seismic shift from one-size-fits-all mass markets to millions of markets of self interest.” That assessment carries huge implications for retailers who are trying to move product that was once a specialty, but is now a commodity. Strategy consultants Booz Allen Hamilton explain it this way:

As every market matures, choice increases. Then competition drives up quality and convenience to the point at which offerings become commoditized. The only businesses that then thrive are those that move beyond “me-too” or incremental offerings to marketing more-relevant and more-differentiated products and services. The only way to accomplish this is to focus on a narrower target.

Technology & The Long Tail

Technology has played a major role in facilitating this shift. Marketers are now able to micro-target specific groups, engage customers with more frequency and intimacy, and customize to consumer specs. Moreover, technology has enabled consumers with the tools to seek out suppliers that offer just the thing they want.

Think about it. If you are a retailer focused on selling lots of stuff to lots of very different people, you are probably fighting a loosing war of diminishing margins, market share and profitability. On the other hand, brands that have figured out how to excel at attracting and keeping loyal a narrowly focused niche will probably continue to do well. And why is that? Once you, the customer, has experienced having your ever-increasing levels of self-interests met by a niche provider, you have a hard time going back. For example, why would I continue to go back to a retailer for accessories that I know from previous experience, they probably will not have (not even on their website).

As even a senior Wal-Mart official recently said, “no customer today will stand to be treated as part of a mass market anymore.”
This is a major disruption and marketers who fail to respond to it quickly will suffer. According to Advertising Age, the value propositions of those who ignore niche marketing…

“…will be less relevant than those of competitors. For those slow to adopt niche marketing, the future also is bleak. Attempts to recoup share will be difficult because competitors will have preemptively established closer customer relationships.’

A number of brands and marketers have embraced niche marketing. Names like Target, Crocs, Red Bull and American Girl. The all have the same objectives as any other marketer, but they have sensed the disruption and have responded by finding a new way of going to market.

Narrow, not Small

The other thing that has changed is what niche marketing really means in today’s environment. It’s still “the targeting of a more narrowly defined customer group seeking a distinctive mix of benefits”, but niche markets are not the “marginal opportunity” that they were once viewed to be. Today, niches are viewed much more positively.

In today’s marketplace, niches are flourishing. Some niche brands are generating hundreds of millions in sales. Sometimes, narrow niches, fueled by mavens and connectors, become the next big, disruptive thing. The big point of the article is that niches should not be equated with small. Instead, think of narrow. Then target very specific groups who will relate to and find differentiation in your offering. At this point, you are no longer a commodity and you can increase your margins by charging a premium. Do this over and over with different products and services, and you can generate volume and growth that makes up for your narrow targets.

Smaller targets, larger focus
Ten years ago, the medium was still the message. Eight years ago, we could still think of the 4P’s — product, pricing, place, promotion — as essentially independent strategies. Five years ago, everyone started to buzz about customer-relationship marketing. About two years ago, we got really excited about digital-marketing tactics and started to apply them without any real strategic purpose. All this has changed.

So what’s really new about the new niche marketing? It’s realizing that while our targets have to narrow, our definition of marketing communications has to broaden. Today, everything communicates what a brand stands for, all the time.

It’s like the old saying: If you are on the wrong train to begin with, every stop along the way is the wrong stop.

The article closes with 10 principle to harness the power of niche marketing:

  1. Position your brand as narrowly as is economically possible.
  2. Become the specialist that anticipates the needs of your target.
  3. Rapidly work with the target niche to co-innovate.
  4. Set as your goal such consumer centricity that the target niche will want to co-brand their identity with yours.
  5. Live by a higher standard of ethics.
  6. Embrace a business model and metrics that grow the most valuable assets of the new niched economy.
  7. Reap first-mover advantage by learning how to identify a niche of opportunity.
  8. Re-imagine your role as that of entrepreneurial founder of a special interest group.
  9. Forget push marketing; excel at pull marketing.
  10. Realize your brand is now “media” competing against all other media

What do you think? Does this make sense to you ? Can you think of companies that could immediately benefit from leveraging niche marketing?

(Source: Advertising Age)

A Clean Slate is a Beautiful Thing

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I typically don’t write about my professional life, but today is different.  After 23 years as an IT professional for a Circuit City Stores, my position was eliminated.  For the first time in 23 years, I am going to be actively seeking employment.  With today’s revelation, came a dark rainbow of negative emotions: frustration, anger, uncertainty, fear, sadness.   Over the course of the day, I reflected on those feelings, the pros and cons of my former job and the implications of the event.

Where I’ve Been

If you have explored my blog, you may know that my “day job” has been management of IT development.  Not very sexy stuff and frankly, not a very creative outlet for the stuff I am passionate about.  Nevertheless, after 23 years, you can get really comfortable with a 3 mile commute, a good salary, and lots of longtime friends, so I have never seriously looked elsewhere. 

About 2 years ago, I was asked to join an internal innovation team.  This cross-functional team, made up of all sorts of people with other day jobs, was given time and resources to design and test as many new ideas as they could come up with.   Recognized as someone who was never content with the status quo and who frequently pointed out opportunities to improve the customer experience, I was later invited to join a special team who worked with company execs and Gary Hamel’s consulting firm, Strategos, to develop an new strategic framework for the company. 

What I Learned

It was the most invigorating 10 months of my career.  I learned how to synthesize consumer insights, emerging trends, orthodoxies and competencies into a differentiating strategic architecture.  I researched and developed 7 year forecasts for consumer technology, social trends, retail store design, and the American retail workforce..  The team delivered several solid proposals, all of which had differentiating customer experience models, and eventually selected one to move forward with.

It was during these last few years of Innovation and Strategy work that I really discovered my passion and point of view around delivering great customer experiences.  It’s also when I became acutely aware of the shift of power from supplier to customer, and the need for companies to start using social media tools and other emerging channels like virtual worlds to engage their customers and employees in conversations.   These are the things I had become passionate about.  IT Management was my job and one was getting in the way of the other. 

 Who I’ve Met Along the Way

The same social media tools that can enable this amazing conversation with customers and employees has also allowed me to make connections and share insights with like-minded people all over the world.  A few months back, David Armano wrote a “emotion” piece entitled “Shared Experiences”.  In it, he asked if the digital relationships that we are forming through social media can ever be as close those we create through actual interaction.  I think they can.  I watch the banter between digital friends on Twitter.  I learn what people like, what they eat, what makes them laugh, their musical tastes, their kids names; and I share the same about myself.   Those of us who have adopted these vehicles of personal publication tend to share our thoughts much more freely than those who haven’t.

When I Twittered about getting laid off this morning, I was both surprised and delighted by the replies and offers to help from my digital friends.  You know who you are and I really appreciate you reaching out.  Though most of us have never met, I really do consider you my friends.

Clean Slate

Now before this post careens completely out of control (is it too late?), I think I need to get to the point.  I was dealing with all sorts of negative feelings this morning, but why?  Was it because I wasn’t going to be managing financial applications development projects any more?  Or perhaps I was going to miss that next meeting where we go over, in excruciating detail, why one team needs to adjust a testing schedule? 

No. 

These are the uninspiring elements of my former day job that were a necessity because I had not taken the time to look for other opportunities where I could do work that I really cared about.  Now I’m sitting here with a clean slate and it’s a beautiful thing.  I have been given the opportunity to find something new to do; something that I want to do.  The negative feelings from this morning are being offset with optimism, excitement, hope, happiness.

Having to find a new job is a challenge.  Contemplating a career change after so long is daunting, especially when you don’t really have a resume that reflects what you want to do.  My newfound positivity might erode in the coming weeks if the opportunities don’t pan out.  But for now I feel really good.  I love new challenges, I know what I am passionate about, and I know that I have a network of new, like-minded friends, who’s opinions I respect, ready and willing to help.

The Little Stuff Redux

Earlier this week, I wrote about the opportunities in addressing the sources of customer dissatisfaction. On Friday, APs Technology Writer, May Wong, published a report citing difference in the service levels between Circuit City and Best Buy. The report was insightful and absolutely reinforced the points I was making earlier in the week. I’m including some quotes and commentary below.

This customer’s past experiences have let him to solid opinions of the two retailers. Who do you think he recommends to his friends and family?

Ralph Devoe’s hunt for a new computer monitor didn’t include a stop at Circuit City, even though one of its stores was only a few doors down from the Best Buy where he went shopping this week. “They often don’t have what I want,” the retired physicist said. “And Best Buy just seems a little better. The salespeople actually know what they’re doing.”

Having a large inventory selection and “knowledgeable associates” are really important, but they are big and potentially costly things from an operational stand point. In my earlier post, I focused on the smaller sources of dissatisfaction, like how the customer is treated in the store. The following really drives that point home:

For sure, bargains and good rebates could be found at the stores of either chain — an important draw for the price-conscious American public.

But other times, it’s as basic as how a store feels, how the products and aisles are laid out, how the workers there treat you.

A friendly greeter is stationed just inside Best Buy’s front door.

“How’s it going? Welcome to Best Buy,” he repeats.

Within a minute of browsing in a section, a Best Buy associate swings by to offer assistance. The staffer casually dispenses product info or comparisons, and just as quickly lays back if you decline the help.

A visit to Palo Alto’s Best Buy and Circuit City to pick up a component-video cable illustrates the differences.

At the Circuit City, it took some effort to find a store employee to ask where to find the cables — and the red-shirted employee who was tracked down misdirected this shopper to cables for TVs.

At Best Buy, the greeter at the door quickly responded with a more specific question, “What kind of component video?” By asking, he learned the cable’s purpose was for a game console and pointed to the video game section.

The desired Sony-branded cables were sold out, but the Best Buy associate did double check the store inventory.

That kind of attention to detail goes a long way in a shopper’s experience.

I also talked about ensuring that your interactive displays are always functioning. Ms. Wong points out this difference between the two retailers:

At another Best Buy in Sunnyvale, for instance, the music MP3 players on display were in good working order, and a patron could test the controls and use headphones to listen to them. By contrast, the Palo Alto Circuit City’s portable players — with the exception of a separate display for Microsoft Corp.’s Zune player — were not powered and lacked headphones so a shopper couldn’t get a good test run of the devices. Product information placards were also missing from some models.

The bad news for Circuit City is that this “little stuff” is rampant throughout its stores and it all adds up to a pretty crappy experience for customers. Both companies recently reported results for the previous year and the differences were like night and day. I am not an analyst and I can’t tell you to what degree Circuit City’s continued lagging performance is attributable to the sources of dissatisfaction in their stores, but my gut tells me that it is a significant cause.

The good news is that these problems can be overcome and for the most part, the solution doesn’t involve a big capital investment. What it does require is much more valuable, and perhaps more scarce, than money. It requires people that care. Store associates that take the time to look for things that aren’t right with their store and fix them. Support associates that are not only responsive to the needs of the people in the store, but are proactively looking for ways to improve the operation so that the store associates can focus on the customer and not the infrastucture.

Remove the Sources of Dissatisfaction. That’s the fourth item in my Prescription for Building Loyalty but after Listening to your Customers, it’s the next most important thing that retailers must do.

Storytelling – Geeksquad vs firedog

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I have several official and unofficial jobs at Circuit City.  One of the “official” ones is that I am heading up our entry into the virtual world of SecondLife.  Partnering with IBM, we have a “demonstration store” on one of IBM’s islands.  It’ was in no way designed to be a compelling SecondLife experience, but was intended to be an interesting device to show the “art of the possible” to our executives.  The “store” has been up for a little over 3 months and we are starting the process of envisioning the second generation experience.

Our IBM partners told us that our competitors from Minneapolis were inquiring about SecondLife at January’s CES.  Today, I saw that Geeksquad island has opened in SecondLife.   That’s a fast implementation and points out the strength of BestBuy’s Sense & Respond capability, but the big story here is something else entirely. 

Looking at the Geek Squad SecondLife announcement page, I came to a realization about the different marketing approaches for Geek Squad and firedog.  For months, I’ve been trying to figure out why I didn’t feel comfortable with the firedog brand.  Today it hit me. 

In today’s “experience economy”, it’s not enough to simply make your products and services available.  To win in this market, you need to be able to tell compelling stories.   Lots of promiment Marketing types like Hugh and Seth, have discussed this concept recently.  I think Geek Squad has that ability.  They have created this “geek mystique” that resonates with the masses of people who know they are not as technically savvy as some folks (like the geeks).  With their SecondLife marketing, they carry this “story” forward:

“While this announcement is expected to help Geek Squad’s customers by offering an extension of Geek Squad’s 24-hour service, it is also expected to cut further into its Agents’ already meager social lives.”

“I’m constantly asked about what it is that Geek Squad Agents do in their free time,” said Robert Stephens, founder and Chief Inspector of Geek Squad. “While it used to be a pretty clean mix — divided between poring over computer manuals and sleep — we’ve seen the balance shift in recent years to poring over computer manuals and immersion in digital worlds like multiplayer online games and environments like Second Life.”

Sure, most Geeks have probably never even been to SecondLife, but the story that has been build around the “Geek” makes it easily believable.  It makes sense that “geeks” would be out on the technology edge.  Contrast that with firedog which uses the metaphor of man’s best friend to represent the brand.  The big word here is “Loyal”, but there are a whole series of other words that are used to describe what “what makes a firedog a “firedog” including “Tidy”, “Real”, “Grounded”, and “Fresh”.   firedog.JPG

The problem is that these are just words.  They don’t really tell a story.  They don’t say “these guys live for the technology problems that drive you crazy”.  There is no “mystique”, no story about who these guys are and why you should use them.  It’s simply not as engaging as the “Geek Mystique”.

I’ll probably get some serious grief from my Circuit City family for this post, but I have to call it as I see it.

What do you think?