Wednesday, March 25, 2009

You Call This Service?

Business Week's 2009 Customer Service Issue (2/19/09) names as the customer service champ of the year.

I’m a customer of Amazon and buy a couple of times a month through them. Still, they don’t come to mind when I hear the term "customer service." Theirs is a robotic business in which the delivery is, as much as they can make it, untouched by human hands or voices.

Is this yet another case of "Less Is More." Does it illustrate the power of invisibility? Or is it yet another case of radically reduced expectations?

Unlike a Nordstrom, LLBean, a good garage, favorite coffee shop, or the Apple store, there is no immediate experience of being served let alone well served.

"Service" for Amazon is designing processes, which are both robust and comfortable for the customer. The goal is to create reliability and reduce cost there by delivering superior value. It also teaches shoppers and changes their behavior such that both their expectations and demands are different.

An extended definition of service in Amazon's world might contain components such as:
  • Finding products – Here Amazon excels. Why don’t libraries allow you to find something so easily instead of merely automating the old fashioned card catalog?
  • Shipping – The availability of free shipping on many products could be thought of as part of the service. This is fine, yet arrival time is unpredictable.
  • Recommendations – The knowledgeable store clerk is increasingly rare. Amazon does make suggestions on its home page. This seems to be based on my prior searches and misses the mark by a wide margin. Its customer reviews, which are a form of social networking, can be helpful. They are a feature not found when shopping in a physical store. Indeed the potential for Amazon customers to form community offers the intriguing potential for them to transform the shopping process.
  • Returns – Yes you can make them, but Amazon makes you hunt and click to find out how. The return policy is an adequate standard 30 days subject to conditions. Amazon does not facilitate this, presumably by design. It pales when compared to merchants, who guarantee satisfaction by taking returns, period.
  • Conversation – you can exchange messages by email, chat and even phone by entering your number in a form and requesting a call back. If the shopping process is a way of connecting with people, I can recommend a great local bookstore.
Since you’re reading a blog, you’ve probably shopped at Amazon and can decide for yourself whether they are service champs. Perhaps a more significant award is that their sales continue to grow in a very poor economy. Amazon has been continuously improving its process to deliver a vast array of goods at competitive prices. Service Champ or not, its nice that so much of what we need is a click away.

Wednesday, March 18, 2009

Marley Brew

First Music News reported that the estate of reggae singer and song writer Bob Marley may license his name and image to a range of products including snowboards, hotels, coffee, headphones, and beer. This is in part a defensive strategy to capture revenue from unlicensed use of his name or image, but is this good marketing?

Marley's music remains popular 28 years after his death. A visit to the iTune store, shows that 16 of his tunes have a popularity rating of 7 bars or more. Start searching on iTunes, YouTube, or even Google for "bob" and “bob marley" is the first suggestion. His YouTube videos such as Buffalo Soldier and No Woman No Cry have been viewed millions of times. This is brand equity.

Marley and the Marley brand are known for music and associated with Rastafarianism, Jamaica, and cannabis. He has no relation with any of the product categories he may be endorsing from the grave. Just as, say, Tiger Woods has no logical relation to the cars, watches, and consulting firms he endorses. Marley Beer looks like an extreme case of brand extension and brand extensions are often a bad idea.

There could be McDonalds headphones, Ford coffee, Apple snowboards, etc. There aren’t. These, and most other companies are very cautious about what their brands mean and what businesses they compete in. If Procter & Gamble had a new way to clean something, it would very likely launch this as a distinct brand rather than as an extension of an existing brand. Similarly, Coca Cola is in the juice and water businesses, but not under the Coca Cola brand.

Most brand extensions disappoint. They risk diluting the position of the core brand and the extensions seldom thrive. Even multi-business wizard Richard Branson has had indifferent success with his derivative brands such as Virgin Mobile and Virgin Money.

Conventional marketing wisdom is not always right. Unlike classic brand extension, no investment or market risk would be born by Marley. The brewer or snowboard maker affixes a new label to an existing product and assumes what business risk there is. None of the proposed brand extensions appears to clash with the Marley brand as perhaps a Marley breakfast cereal or motor oil might.

I'd recommend they do a deal if they have credible licensees. Excuse me, I have to don my IBM athletic shoes and get the gym.