PDF File: 

CRM3_wp_dull.pdf

Accenture

CRM is indispensable in creating a successful brand, one that can bring tangible benefits to the company and its stakeholders.

Visa, Coke, Virgin, Sony, Nokia … everybody recognizes the value of a strong brand. But few companies manage their brand value as well as they should, and even fewer think of their brand as having much, if anything, to do with their creation and management of customer relationships. It is becoming increasingly clear; however, that CRM is indispensable in creating a successful brand, one that can bring tangible benefits to the company and its stakeholders. To capture those benefits, brand managers first must expand their definition of "brand" and move beyond seeing it as merely a sign or logo that identifies a particular product or service.

Rather than playing the guessing game about what will take hold of the customer's imagination, brand managers must use more statistical measurement and analysis to direct their decisions. Instead of leaving channel management to the sales force, marketers must actively target the B2B relationships that increasingly influence consumer brand choice. And, rather than dismissing the call center as the purview of customer service, brand managers must do a better job of understanding how brand value can be strengthened or destroyed with every customer call.

More Than a Name

Many people instinctively associate brand with a name. To be sure, a company's name is an important element of its brand. However, a brand is far more than a name, icon, or slogan. It encapsulates all the customer's interactions with the company, its products, and its services. Marketers who ignore or minimize the important contribution these elements make to branding will fail to generate significant value from their branding efforts. For example, a company that prides itself on great products and prompt, courteous customer service, yet makes its customers slog through an inordinate list of complex options when they call its service center, is damaging its brand. Similarly, a company that continually fails to deliver goods when promised is undermining its advertising and marketing efforts to create a strong, positive brand.

It is evident that what customers broadly think about a company goes a long way in determining how they receive and embrace that company's brand. The most successful companies in branding are those that create and deliver what we call the "customer delight experience." In this context, we can understand brand to equal the sum of everything a company says, everything it does, and how it says and does it. Put another way, brand encompasses the entire range of the company's products, services, behaviors, distribution channels, technologies, and processes.

All strong brands share three characteristics. First, they offer something better and different on a dimension that customers care about; in other words, the promise they make is distinctive from the competition’s. Second, this promise is executed very consistently. And third, the brand promise is communicated consistently and persistently. A lesson in building a strong global brand, Wal-Mart has established its reputation on its promise to deliver the products that customers want at consistently low prices in a family-oriented shopping space where shoppers always feel welcome and are rarely disappointed. And most Wal-Mart shoppers would agree, the store lives up to its promise.

These characteristics — the promise of something different or better, the consistent execution on that promise, and its effective communication to customers — put to the test several other traditionally held beliefs about brand. Weeding them out is very difficult, but that's the only way that a strong brand can grow and flourish. We hereby pull each one up by its roots:

Brand Must Be Top-of-Mind

Probably no other assumption has cost as much money as the notion that to be successful, a brand must be top-of-mind. The bursting of the Internet bubble is only the most recent evidence that this singular focus on brand awareness can lead to disaster. Hundreds of millions in investments were eagerly poured into attempts to make customers aware of new brands. Marketers for emerging dot-coms were convinced that by capturing top-of-mind status, their companies could unseat incumbent competitors and flourish. As we know now, these efforts were misguided. The public's mere awareness of a brand was not sufficient to guarantee business success.

Given that brand is experience, it has to show more than top-of-mind awareness to be successful. It has to be relevant to a target market willing to pay the price. It has to attract people to try it out at least once, and then be available for reuse or repeat purchase because it did bring such a good experience. In short, the brand has to build a base of loyal customers, emotionally and financially committed to repeat purchasing.

It is one thing for a brand to capture everyone's attention, quite another for a company to create the behavioral patterns and loyalty that make a brand a consistent success. If managers define brand as merely the name or product logo, they are likely to associate rising awareness with big-time success. Many will derive a false sense of brand strength from reports that the product has garnered a lot of attention. The broader definition of brand as the sum of the customer's experiences with the company will encourage that company to measure more of the experience than just the awareness factor. In the process, the company is much more likely to find opportunities for improving how customers do experience its products and services.

Now-defunct Internet retailer eToys is one of the best examples of a company that pinned its hopes on generating widespread awareness, only to be undone by shoddy service and delivery that undermined customers’ trust and loyalty. The company certainly did a phenomenal job of creating and reinforcing a unique position in consumers’ minds through innovative advertising. However, its failure to meet critical customer needs — summed up most famously in its inability to deliver toys in time for Christmas in 2000 — contributed to increasingly negative customer experiences. eToys management realized the problem, but by then it was too late. Burned once, customers abandoned eToys, as did Wall Street shortly thereafter.

Cingular would do well to learn from eToys’ mistakes. The wireless phone service provider has enjoyed stunning success in building customer awareness of its brand in an extremely short period of time through a widespread and ambitious multimedia campaign to promote the brand's distinctive imagery. However, the company understands that this success can be undone quickly if it doesn't mind the rest of the house — i.e., if customers receive uneven phone reception or get treated by customer service representatives in ways that contradict the friendly tone of Cingular's ads. Despite its initial success — of which Cingular can be proud — the company's hard work in brand building has only just begun.

Advertising Is the Key to Successful Brand-Building

Managers who hold firmly to the belief that top-of-mind awareness is the essence of brand will readily accept this proposition, again largely to their detriment. True, thanks to good advertising, a handful of companies have built strong brands: Absolut Vodka, for instance, has bought its way into the public awareness through a 20-year campaign of distinctive images. For those companies that spend huge sums on advertising while skimping on the quality of the customer's experience, however, the life of the brand will be brutally short.

Advertising is just one element of the brand experience — and a very small one at that. It is just one of many tools that innovative and broad-thinking companies use to build their brands. Starbucks uses almost no advertising, yet the company has established dominance in its industry, and it seems there is hardly a street corner or airport concourse in any major American city where the distinctive green, black, and white logo is not in full view.

Advertising is doubtlessly important, but it is only part of the company's overall effort in playing the brand value game. In the case of Starbucks, advertising occupies a much smaller portion of the marketing budget and focus than many people realize. Similarly, New York-based TIAA-CREF is perhaps the largest financial services provider that nobody has heard of. The 80-year-old company manages more than $280 billion in assets, and has a large base of extremely loyal customers. This loyalty was built on the backs of a long history of reputable products, investment management expertise, excellent service, and stability — characteristics that are critical for companies that individuals and institutions trust to manage their money. The company only recently began to advertise to increase awareness of its strong brand among potential customers who are unfamiliar with the company.

Brand Must Be Consumer-Driven

The importance of listening to the consumer has, of late, been much in the news, to the point of becoming a marketer's mantra. While that advice may work in some industries or with some products, the fact is that more and more "consumer" decisions are being made by channel customers or partners rather than by consumers themselves. For example, McDonald's serves Coke, not Pepsi, in its restaurants. Similarly, Wal-Mart customers looking for Whirlpool appliances will be disappointed; the retailer no longer carries the brand.

Marketing Owns the Customer

This used to be the rule, at a time when marketers were the only ones talking to customers through traditional advertising channels. Now, however, that is no longer the case. All too often the marketing message hardly gets through to the customer. Instead, it's the customer service representative who "owns" the customer, and often that ownership amounts to something closer to taking the customer prisoner. Today's innovations in automated service technology — those infuriating telephone answering services that instruct the caller which number to press for this or that service — are symptomatic of the loss of marketing's control over communications with customers. As customers’ experiences are increasingly determined by interactions with call centers and customer care representatives or through Web sites, it does not take many bad experiences to erode a customer's confidence in a brand and to chip away at the brand's value. Simply put, CRM is rapidly becoming the pivotal point for determining whether a brand is strong, weak, or something in between.

Consider, for example, the cable television service providers. If asked about their cable provider, rarely will customers relate their pleasure with the company's range of channels, digital services, or reception — the company's core offerings. Instead, customers will rail about the dreadful service they get from call center representatives. Remarkably, the same company's service may be loved in one city and hated in another — a result of the company's failure to upgrade its facilities consistently as it enters new markets (generally through an acquisition of another company). The lesson here is that despite having good products, the company's brand is defined by the negative experiences its customers encounter when dealing with its call center, which demonstrates how powerfully CRM is linked to brand.

Most B2B companies, however, say they recognize the importance of maintaining a high-quality relationship with long-term customers. Building and enhancing those relationships, they know, has become the province of the sales force and the customer care representatives, not the marketers. Moreover, they recognize that CRM technology helps make people more efficient and effective at enhancing the customer's overall experience with the brand.

Increased Revenues

It's a fact that companies with strong brands typically command higher prices. Although Toyota and General Motors use the same California assembly line to make identical vehicles — the Corolla and the Prizm, respectively — Toyota can charge more for the Corolla. Same parts, same assembly, same cars, but the difference is the value of Toyota's brand. Over time, consumer experience has been much more consistently positive with Toyota than GM, and the strength of that experience gives Toyota tremendous pricing leverage. Given that a 1 percent increase in price can translate into as much as a 10 percent increase in profit, Toyota's brand strength easily contributes to greater shareholder value.

Likewise, Sony leads its competitors in the electronics business not only because consumers want Sony products, but also because they are more willing to pay premium prices for those products. Sony's products carry a price premium of 10 percent to 50 percent over those from other manufacturers, despite sharing many common internal components. The difference is that Sony's brand conveys higher levels of quality and reliability than competing brands today. In cases where the products of two competitors are identical or nearly so, it is clear that the customer's experience has to include the sense of increased status and self-assurance for having purchased the higher-priced item.

Even with commodities, a category where one might expect less pricing differential, the power of a good brand (the sum of all the customer's experiences with that brand) can be seen in the bottom-line results. The best-performing brands in paper, steel, cement, and chemicals, for instance, extract price premiums — sometimes in market share, sometimes in discounting either a little less than the competition does or a little less frequently. Dupont's products dominate in their categories, even though substitutes are offered at cheaper prices. A segment of customers is always willing to pay a higher price for the brand they want, no matter what price incentives are proffered by lower-priced competitors. That behavior translates into increased revenues and ultimately greater benefits for shareholders.

It is also evident that companies with strong brands can more easily reach beyond their traditional market sectors and be successful at undertaking new ventures. Since most strong brands have an elasticity that allows them to credibly relay information about a new product or service — witness the Virgin brand, whose reach extends from airlines to recorded music to wine retailing — customers are more willing to try those products and, even more important, forgive mistakes. Wal-Mart recently entered the supermarket sector and quickly became the largest grocery retailer in the United States. IBM parlayed its strong brand reputation in office equipment and computers into a profitable consulting business. Online auctioneer eBay has moved increasingly away from collectibles and created a new space that is a marketplace for just about everything. Conrans has extended its hip home store experience into equally hip restaurants, while Samsung is extending its global brand strength to electronics from its strong brand in cell phones. While not every extended venture is assured success, the point is that one's chances of succeeding are significantly increased if one starts with a strong brand.

Greater Capital Efficiency

As we have seen, strong brands have greater success at generating demand than their weaker counterparts have. Given that its customer base is more loyal and more committed, a strong brand can get a response with practically any marketing stimulus.

For years, Pillsbury has dominated the profitable category of refrigerated dough. The company aims well-conceived marketing campaigns toward its loyal consumers, who typically are eager to try new products when they are introduced. This loyalty and willingness to experiment have kept competitors, both national brands and private labels, at bay. While consumers will use the private label, when it comes to trying a new product, they usually opt for the brand they know and trust.

B2B Customers as a Brand Value Opportunity

Lately, the consumer or end-user has been the primary focus for marketers. Hence, the consumer is the object of much research and surveying, including details on purchasing habits, price points, household education levels and incomes, frequency of purchases, and so forth. For most marketing managers, the consumers’ experiences are most important in establishing a strong brand.

Few companies, however, recognize that if brand is the "total experience," then the rule applies as equally to business customers as to end-users. The examples of Wal-Mart and McDonald's illustrate that B2B customers increasingly are making decisions for the end-user on which brand will be available. As a result, it's becoming more critical for marketers at a B2B supplier to understand how its intermediate customers view their relationship to the supplier. An easy first step in this direction is for marketers to read the work being done by their company's market research department for sales and customer service functions — for example, customer service and satisfaction surveys of channel partners — in addition to poring over consumer research data.

In reviewing such surveys, marketers will be able to better understand their company's relative brand strengths and weaknesses among its influential business customers, how they compare with those of its competitors, and their impact on the brand among consumers. They then can begin to identify ways in which improving the brand relationship with B2B partners will translate into a stronger brand at the consumer level. Although traditionally not part of the marketer's job, improving the B2B brand experience will certainly benefit the company's B2C brand efforts — and add to overall brand value.

Aligning and Executing

Given that the brand is the fulfillment of the promise and the customer has to have a positive experience with all aspects of the company, then it stands to reason that aligning all the elements in the lifecycle of the brand is essential to success. Once managers understand the brand promise, they need to make sure the organization as a whole delivers consistently against that promise. In most organizations those responsible for making the promise and setting the strategy are not those whose job it is to deliver on it. How many marketers or brand executives really have a chance of influencing what goes on in a customer call center? This is why alignment and consistency are so important.

Perhaps it's simply a matter of writing a script for the call center representative or instructing retail employees on how to dress or how to interact with customers on the sales floor. What we call "brand manners" determines, in large part, how customers experience the brand — everything the company "says and does." These recommendations fall primarily in the province of CRM, and everyone in the organization has to take responsibility for seeing that it is carried out. Does the brand promise convenience while the IVR keeps cycling people through more telephone menus? Does the brand stand for premium quality while marketers send out notices to customers about discount prices and second-rate models? Does the B2B side promise excellent account service while the sales technology is focused only on productivity? If so, there are major problems in alignment that managers must correct.

Opportunities for improving the execution of the promise are everywhere: perhaps overlap in services, inconsistencies in delivery, miscommunications between designers and producers, and the like. CRM decisions should appear at the top of the managers’ agenda as they weigh the costs between preference and profit: Is it worth another $10 million in the yearly personnel budget to have a live person answer the customer's call on the second ring? Should another customer call center be built and staffed to handle an expected increase in calls once a new product is released? These are not the sorts of questions that marketers have typically faced in the past but, increasingly, they are today. To ignore them is to risk the value of the brand, and the marginalizing of marketing's role in brand management. Good execution means getting a clear picture of the people on the front lines, those most likely to come into contact with customers face-to-face. If their brand manners are not superior, chances are the customer will register some dissatisfaction. If employees do not understand the brand value and their role in determining what kind of experience the customer has, it's a safe bet that the brand will falter. Consider the success that Disney has had in creating great experiences for guests at its theme parks, where every employee undergoes extensive training in brand manners. Ritz Carlton Hotels recognized this simple principle long ago and has been on the forefront of hiring and training people to represent the brand (which is wonderfully summed up by the company's motto, "We are ladies and gentlemen serving ladies and gentlemen").

Managers who have trouble gathering the facts about call center behavior, sales complaints, and other such metrics might try calling the center themselves and talking to a service or sales representative. It could prove to be a lesson in humility, as well as a first step toward making real change at the company that would increase brand value. Similarly on the personnel side, the human resources manager might conduct employee satisfaction surveys, examine each person on the extent of his or her knowledge about the brand as well as about customer relationships. Chances are excellent that in doing so, managers will discover major areas for improvement.

Case Study: Visa's Commitment to Brand Keeps it in the Top Tier

Marketers and brand experts around the world consider Visa one of the world's top 10 best-managed brands. But, far from resting on its laurels, the company continuously reassesses and rejuvenates its brand strategy to stay in the top tier. In the words of Caroline McNally, Executive Vice President, Global Brand Management, of Visa International: "The best time to evolve a brand strategy is when a brand is in a position of strength."

And the brand certainly is strong. Visa has a share of the global payment card market that surpasses all other payment systems combined — despite the fact that Visa interacts with consumers only through its member banks. Visa is a global association of 21,000 member banks which sign up merchants, issue the Visa cards, set the rates, and effectively "own" the relationships with cardholders. Visa adds value to consumers in part because of its strong brand; a brand that stands for global acceptance, reliability, security, and convenience.

Brand Strategy

In 1995, the association recognized the opportunity to better integrate its brand strategy with its corporate and product strategies, and embarked on a rigorous program of qualitative and quantitative research to assess consumers’ perceptions of the brand and identify the roots of its strength. This strategic assessment addressed the following key questions:

• What attributes does the Visa brand own, functionally and emotionally?
• How does the Visa brand differ from both traditional and emerging competitors’ brands? What is the strategic intent? Where are the gaps and vulnerabilities?
• What are the brand's strengths and limitations? Can the brand support more products and services within the payment category — or even outside the payment category? If it can, does extending the products and services fit in line with the corporate strategy? How can Visa address the limitations, and build on the strengths, to create future growth?

Single Brand Strategy

The research revealed two key findings that were integral in setting Visa's long-term single brand strategy:

• In consumers’ minds, Visa was perceived as a global or universal brand with single-product functionality, i.e., wherever consumers live in the world, they view Visa as either a credit or a debit facility.
• Consumers had the expectation that Visa, because of its association with reliability, security, and convenience, could be more than it is. Clearly the opportunity for expanding the brand within the payment category, backed by a strong products and communication program, was Visa's to capture. However, while Visa learned that consumers would accept some extension outside the payment category, such a move would not be aligned with corporate strategy.

Building on these key findings, Visa took its strategy to the next level. Under the umbrella of the brand, the association set out to take Visa from being "the world's best credit (or debit) card" to the "world's best way to pay." To achieve that, however, it needed to be confident about how it could go with new products and services — how far it could stretch the brand — before it would disconnect with consumers and the corporate strategy. Applying the single-brand strategy allows Visa to use its existing strengths to remain relevant in established and emerging markets by ensuring that future products and services link to the Visa name and imagery. This means delivering on the four objectives of the strategy:

• Using the existing strength of the Visa brand. Virtually all new products, services, and programs use the strength of the brand and retain the Visa name.
• Delivering superior consumer and merchant experiences. This is key to keeping the Visa brand promise. It means ensuring that products work seamlessly and reliably, are accepted where consumers would expect them, and that the customer experience is consistent at all points of interaction.
• Enabling new product and service introductions for Visa and its member banks. Ensure, for example, that the branding system is appropriate for current, as well as future programs.
• Consistently applying current brand strengths to maximize opportunities in new payment channels and payment environments. Innovation for innovation's sake isn't what's relevant to consumers. Visa must carry the same meanings and advantages in both the physical and virtual worlds.

Visa's challenges now lie mainly in the area beyond cards, ensuring that the brand continues to thrive in the new and emerging channels of payment, such as mobile phones, set-top boxes, and personal digital assistants. In these highly personalized environments, trust and reliability won't be enough. Visa knows that building deeper relationships with consumers requires the establishment of an emotionally-positioned brand to which consumers can relate in this highly personalized marketplace.

Visa recognizes that "everything communicates." Whether it's directly related to payment (removing a card from a wallet, making a purchase at the point of sale, in line at a bank branch, or withdrawing cash from an ATM) or a related experience (reporting a lost card to a customer service representative or paying a monthly bill), Visa manages its brand by first understanding what it stands for in cardholders’ hearts and minds.

As Visa continuously strives to understand, enhance, and protect the Visa brand, the evolution of its brand strategy is constant. On an ongoing basis, the association monitors and assesses its brand positioning, the value the brand adds to the business, and the consumer-facing brand attributes it possesses to ensure the brand remains fresh and relevant in the future.

Conclusion

A broad definition of brand, at first blush, can appear to be a nightmare for marketers. In effect, the definition tells marketing managers, "Although you are responsible and accountable for the company's brand in the marketplace, you only have formal control over one small factor that contributes to the brand — and the smallest and least influential one at that."

On the other hand, by understanding brand in this way, marketers can move past their preoccupation with advertising and consumer awareness-building activities, and start seeing branding from a much more holistic perspective. They can begin to use a more complete set of metrics to measure brand value (and compare the value of their brand to their competitors), and work with their colleagues in sales and customer service to ensure consistency in messaging and experience for critical channel partners and customers interacting with the call center.

An expanded definition of brand also makes it clear that CRM plays a critical role in the branding process, and that activities formerly considered outside the scope of a company's brand actually are the principal contributors to the brand's strength or weakness.

As a result, companies must fully understand their brand promise, and how they intend to execute that promise, before committing to building specific CRM capabilities.

One final note: Building a strong brand is only the beginning of the game. To maintain the strength of the brand, a company must be vigilant in its attention to all aspects of the customer experience. Activities such as constant measuring and analyzing data from customers’ responses, comparing the brand against competitors’ products and services, and making the necessary adjustments in corporate alignment are not one-time actions, but must be performed consistently and repeatedly as long as the brand has life and value.