Branding Strategy Insider

Steve Jobs: His Unique Customer Experience Strategy

Should we follow Steve Jobs’ example when it comes to the customer experience?

The answer is an unequivocal yes.  But not for the reason you may think.  Steve Jobs seemed to have an intuitive understanding that marketing, at its core, is saddled with the paradox that it is a consumer discipline that is inherently anti-consumer.  The approach Steve Jobs insisted on at Apple resolves this paradox in a resolutely pro-consumer way by embracing the anti-consumer side of this equation, not by dodging it.  Yet Steve Jobs’ approach to the customer experience is, perhaps, the one thing for which he is most misunderstood.

Marketing is practiced as a discipline that is meant to be “the voice of the consumer,” quote/unquote.  The challenge, though, is that other practical marketing considerations are no less important, and these will often, if not always, push marketers in the other direction.

Chief among these anti-consumer considerations is the need for some degree of homogeny in production, distribution and service.  If every product were completely customized, costs and delivery requirements would keep them beyond the means and reach of most consumers.  Ideally, every product would be perfectly matched to the unique needs and preferences of each consumer.  But practical considerations require that marketers be less consumer-friendly than that, and usually a lot less.

Unanswered Complaints Threaten Brands

In June 1996, Jeremy Cooperstock flew United Airlines from Toronto to Tokyo. He had such a bad experience that he decided to write a complaint letter to United. A month passed and he received no reply, so he penned another complaint letter. Finally, in late-August, he received a form letter that did not address any of his complaints.

Angered by this treatment and bolstered by messages from colleagues who had also experienced poor service with United, Cooperstock took action.

In September he set up a 'Poor Show' web page on the University of Toronto site.

The site described poor service and lack of customer orientation at United and encouraged other disgruntled passengers to share their experiences.

The page grew in popularity and finally United acted. In March 1997, United threatened the University of Toronto with legal action if the page remained on its server. Cooperstock withdrew the page, but set up his own site, untied.com. The page still exists and has attracted thousands of visitors. It provides hundreds of stories claiming United's incompetence and represents an independent, and therefore damning, indictment of the service levels at the troubled airline.

Marketers vs Consumer Expectations

As a consumer I love Pret A Manger. Yesterday, however, I was unimpressed with its sushi, despite the fact it has been my favourite lunch choice for the past few years. Has Pret dropped its guard? Is it poised for a descent into bankruptcy?

Probably not. On reflection my disappointment was caused by a more subtle marketing phenomenon: there are two sides to satisfaction.

The first is, of course, the quality of the product or service being marketed. The second is the level of quality the consumer expects. When the former exceeds the latter we win a crucial marketing battle.

As marketers we are continually reminded that we must exceed expectations.

We are rarely warned, however, that these expectations are fluid and forever changing. In my case, I have spent the past month working for a client in Sweden, where the sushi is simply fantastic. Pret had maintained the excellent quality of its food. I, on the other hand, had raised my expectation. Indeed, Pret may well have improved the quality and taste of its Sushi significantly in my absence. I would still have been disappointed. In the world of satisfaction, customer-based perception will always supersede product-based objectivity.

It is a difficult lesson for most organisations to accept. A US bank once spent £1.3m halving the amount of time that its customers had to spend in line waiting for a bank teller. With waiting time reduced to under two minutes, the bank anticipated an enormous leap in customer satisfaction and were depressed to discover no such increase in their next satisfaction survey. Research later explained that customers expected to wait between one and four minutes for a teller. It needed to exceed expectations, not just improve the bank's existing performance.

Customer expectations are notoriously slippery. They often temporarily change.

Big Mac or Coke: who's got it right?

A Big Mac and Coke. Two stellar brands of the 80s that seemed locked in each other's orbit, linked by simple usage occasion, power-brand status and shared origins in US consumer culture. The two brands even supported each other, with McDonald's selling only Coke drinks brands in its restaurants since 1955.

But being the world's number-one carbonated beverage isn't all that it once was as consumers turn to healthier, more natural drinks. Similarly, McDonald's position as the ultimate fast food is secure, but of questionable long-term value as consumers turn to healthier and greener alternatives. 

The fascinating issue now is not whether Coke and McDonald's need to change, but which company has chosen the best strategic transition, given that the two have opted to take very different paths.

Coca-Cola has, internally at least, accepted that the writing is on the wall for carbonated beverages, including its flagship Coke. While the iconic brand will always have a place in the hearts of millions, the company is diversifying its portfolio and growing sales with new and acquired brands. The recent $4.1bn (£2bn) cash deal for vitamin-enhanced water producer Energy Brands, and its star water brand Glaceau, is the latest in a long line of acquisitions and creations that includes Powerade and Nestea iced tea (a joint venture with Nestle)

The Importance Of Point Of Purchase

Over the past 20 years, retail brands have significantly increased their leverage over consumer product brands because (1) they increasingly control access to products and (2) the environment in which the products are sold and (3) they have point of sale data to which manufacturers are not always privy. And given the relative size of some of the largest retailers (Wal-Mart’s sales of $285.2 billion [year ending January 31, 2005] eclipses P&G’s sales [all brands] of $60 billion), retailers don’t only affect product sales and market share directly through product access/distribution, but also indirectly by contributing to marketplace exposure/brand awareness.

Point of purchase is the place where everything a brand has done either results in a sale or doesn’t. While most consumers still state that product brands are more important to them than retail brands, most would not waste the time to seek out their preferred brand at another store if it is not available where they are shopping. And, according to a March 31, 2005 Economist article, consumers spend no more than 6 seconds trying to find a preferred brand before they give up and settle for a substitute.

So, how can you maximize your product brand’s probability of success at point of purchase? Through the following: