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Friday, 25 November 2011

Love and Betrayal on the UK High Street: A Tale of Two Brands

By Nuno da Camara, Director, ReputationInc

How long does it take to win over the loving adherent of a rival brand? Well, in my case, I thought it would take years for me to consider betraying my favourite provider of consumer electronics, the much loved John Lewis, to go with anyone else. I love John Lewis with a passion. They have excellent customer service and product knowledge and are polite and charming. And they always give you such good advice on what to buy. Then there‘s the free guarantee, always longer then you get at other stores. What’s not to like?

Well, nothing, but as I sat on my sofa last weekend watching TV I was intrigued by PC World’s latest advert: staff that are trained to deliver amazing customer service is their hallmark, they claimed. Really? Surely not as good as John Lewis though, I thought. Nevertheless, having decided that it was finally time to get that home cinema sound system I had been dreaming about for months, I set off to my local PC World. Is this the beginning of an amorous betrayal, I hear you cry? Well, no. And, actually, yes. You see, I only dropped in to assess the lie of the land, an initial reconnaissance mission if you will, because the PC World store is near my house. The plan was to go to John Lewis next. However, as the autumn leaves whisked around the high street, strange things started to happen to PC World. I wanted to ask a question and a member of staff was immediately on hand. I told him what I was looking for and he gave me a useful tour of the products. I asked for an opinion on the best quality products and received a quick and sensible evaluation.

Slightly taken aback, I pressed on with my barrage of increasingly deft (or so I thought) questions, trying desperately to test his product knowledge to the core. I fully expected this informational assault on the senses to floor him at some point. But it did n’t. He just carried on being really polite and giving knowledgeable answers.

By this point, I was confused. “Is n’t he behaving just like a John Lewis person?”, said a little voice in my head.  He homed on his prey. He asked me what I would use it for: mainly TV and films? Loud music for parties? X-Box? It was a sensible attempt to fit the product to the person. The little voice got louder. And the cognitive dissonance started to get painful. I was on the ropes and he delivered the sucker punch:
“The Panasonic will be perfect for you, Sir. It’s great quality and has everything you need. And it’s £30 off, so it’s a great price as well.”

So, that was it really. How could I possibly stay faithful to my favourite retailer? A few minutes later and I am inserting my PIN at the point of sale. The betrayal takes place to the tune of £258.51. I feel slightly guilty. But the facts are irrefutable. A quality product at a great price bought on the back of good advice.
So, how long does it take to win over the loving adherent of a rival brand?? In my case, about 17 minutes. Yes, it took PC World exactly 17 minutes to convert a vociferous adherent of the John Lewis brand to a paying customer of their own. Don’t get me wrong, I still love John Lewis. But now I would recommend PC World as a good alternative option. What’s the secret? Something to do with training staff to deliver amazing customer service I guess...

Friday, 18 November 2011

Russian Dolls Time or the Beauty of Simplicity

By Anastasia Chernoivanova, Consultant, ReputationInc

Yesterday it was announced that Northern Rock was to be acquired by Virgin Money. We thought Mr Branson had already left his footprint on every possible industry: from mobile, radio, media, to trains, planes, spaceships. And now banking. We cannot help but ask: how far could the Virgin Empire be stretched? And most importantly, what lesson has been learned from Sir Richard’s failures such as Virgin Cola, Virgin Cars, Virgin Brides.

In today’s world, the business environment has turned from complicated to complex with rapidly changing consumer behaviour, rising stakeholder activism, technological revolution, social media boom, unpredictable competitor landscape, toughening regulation. The list goes on and on. Financial crises don’t make companies’ life easier either. The level of complexity only grows with the number of markets your company operates in.

No wonder more and more companies are struggling to make sense of the situation. Sooner or later diversified businesses are overwhelmed by pressure from different fronts, and treat each issue as a separate matter. However, once this happened, it t becomes very easy to lose focus on why they are running all these streams of work in the first place.

Here is where our Russian Dolls come in. Every child knows that the most important doll is the smallest one and that is why it is hidden inside all other dolls. In a similar way a company’s mission (why you exist), values (what you believe in and how you will behave) and strategy (what your competitive game plan will be) should be put at the heart of everything it does: from stakeholder engagement to risk forecasting. All other larger dolls are different in colours and sizes but they are the same in shape. It is the mission, value and strategy that define that shape. Mission, values and strategy should be simple, short and very clear in order to be understood and remembered by all employees and therefore by stakeholders.

Returning to Virgin, the secret of its success appears to be simple - Mr Branson himself. The tycoon injects his entrepreneurial spirit into his operations and puts it at the heart of the every business he touches. Successful ventures in the Branson Land live and breathe the ideas embodied by the man himself, and thus stay as true as possible to that mission and value. With yet another adventure into another Virgin territory, the world would be watching closely to see what Mr Branson may bring to the banking industry.

Every child knows the smallest doll is the most important one and if it is lost all other dolls do not matter.  A simplification? Maybe. But sometimes simplicity is what the scarcest resource, because it is so easy to forget what is hidden inside.

Friday, 11 November 2011

Bad reviews travel fast: Tripadvisor and online reputation management

By Eileen Lin, Consultant, ReputationInc

Here is the situation: You have just over an hour before the evening performance, and stumble upon what looks like a decent pre-theatre menu.  After all, anywhere with fast service and reasonable food will suffice.

The punter at the door promised you snacks within 5 minutes and drinks within 10 minutes. You enter full of hope, only to find that after 20 minutes, you have not been served at all, despite having asked the waitress twice. Then, when your food is finally ready  45 minutes later, it never reaches you, because it sat on a service stall for 10 minutes in the middle of the room, where all the guests and staff had to walk past.  At the end of the meal, you find a 12.5% ‘voluntary’ service charge added to your bill. What do you do?

Do you…
1) Refuse to pay for service
2) Ask to speak to the manager
3) Pay the full bill and vow to never come back again, or
4) Pay the full bill, nod, smile, thank the staff for their hospitality, only to scurry home to write a long and whining online review criticising the poor service?

Let’s face it.  Britons are no good at complaints or confrontations. Most of us faced with this situation would probably prefer to avoid the embarrassment of making a scene and quietly ‘vote with our feet’ instead. However, with social media, things have changed. Popular review websites such as Tripadvisor.com have enabled consumers to get their own back on restaurants and hotels that disappoint.

The extent of such influence was well-documented by a recent documentary by Channel 4, entitled ‘ The Attack of the Tripadvisors’, where a group of B&B owners, whose life and business fortune had been made hell by the review website, confronted their critics. For the hosts, the hardest things to come to terms with was the fact that customers always seemed happy when leaving the premises but as soon as they reach their nearest computer, the meal has turned sour and the stay uncomfortable.

Why didn’t you tell us so, they cry, rather than simply slating us online? We would have done something about it, they say. To illustrate the emotional damage the site has caused, one B&B owner went as far as to say that she had ‘considered paying for a hacker to destroy the website’ because it had turned her childhood dream into a nightmare.

I cannot honestly say I don’t have sympathy for these struggling independent businesses. However, they are missing a fundamental point: the reviews websites are merely a reflection of the increasingly high standard modern consumers have come to expect from anyone that seeks to take their hard earned money from them. We all laughed when watching Fawty Towers, but who among us would actually be happy to pay to stay there?

Over the years, consumers have become increasingly conscious of their collective power and rights, while social media has enabled individuals to have influence beyond their immediate network.  This rise in citizen journalist has forced businesses to re-examine how they obtain and manage customer feedback.

Rather than blaming the reviews website for mis-management and accusing the critics of being cowards hiding behind computer screens; businesses, large and small, must learn fast. Not only on how to deal with customer complaints online, but also how to turn each crisis into an opportunity, using feedback to inform business strategy and action changes. After all, we know that customer satisfaction and advocacy tends to increase when a complaint is cordially addressed, compared with when there is no complaint at all. Managing customer feedback, and thus business reputation, is no longer a communication tool, but a business imperative.

Friday, 4 November 2011

Friends in high places: the paradoxical relationship between business and government

Charles Pitt, Account manager, ReputationInc

The relationship between business and government is paradoxical. At one level government pontificates on how businesses operate and regulates their working practices – posing as our doughty defender against the unacceptable face of capitalism. At another, government is dependent on business to drive economic growth and raise tax revenue. And government is a customer – buying huge chunks of expertise to deliver its agenda whether that’s rolling out smart-meters or getting people off benefits and into work. Telling someone how to do their job, relying on them to do it for one’s income and buying stuff from them all at once does not make for clear cut roles and responsibilities.

Politicians and big business are widely distrusted so it is unsurprising that businesses invest more and more of their external relations function in getting those relationships right -- both for their reputation as well as for their profit margin.

This week the Business Minister published the list of chief executives who have been offered a hotline to ministers. This new scheme designates six ministers as the go-to person in government for some of the UK’s biggest firms.

British business is split on the benefits. Some, such as the CBI, argue that British business needs this degree of “account management”.  Others contend that the largest businesses in Britain already enjoy cosy relationships at the top of government and that formalising relationships in this way might crowd out smaller players – the very companies that need extra help with investment and exports.

However, obsessing over who at the top of business is talking to who in Whitehall distracts from the far more complex web of relationships in play. The fantasy that multi-million pound government contracts are sealed on the golf course is just that – and the fact that the very hint of such underhand dealings frightens politicians and businessmen alike reflects the better-informed consumer landscape in which they both operate. Consumers have exploited growing choice by making ever more demands on those from whom they buy, demanding ethical behaviour across the supply chain. Consumers have also forced transparency on politicians; formerly smoke-filled rooms are not only smoke-free, they are now made of glass.

Rather than nostalgically pining for a cigar in the 19th hole, the smartest business people are responding to their customers’ needs and recalibrating their relationships with government. In some cases they are investing ahead to develop proactive solutions – businesses that spot problems that have yet to be noticed in Whitehall are well-placed to offer (and charge for) the solutions.

Rather than adopting defensive positions, the best external relations managers understand the need to stay focused on the horizon. In other cases businesses are leveraging their experience to deliver what the government can no longer afford to do itself, paying for it and recouping their costs in the future savings made by the state. And chief executives have sat up and noticed – the best in-house public affairs managers are not looking to merely create opportunities for executives and politicians to meet over lunch but using their political insights to drive business growth.

Politicians and businesses are both subject to brutal accountability – whether at the ballot box or on the high street. But rather than colluding in damage limitation the wisest amongst them are embracing their shared agenda: delivering the services people want for the best possible price. Business and government working hand-in-hand, and out in the open, is in all of our interests. And if they fail us they know what we can do about it.