Be True to Your Brand
As a marketeer at heart, I spend a lot of time on positioning. Every product and every service has some sort of market positioning. Companies try to define it for themselves, but it ends up being a combination of your own marketing efforts and the response of the marketplace. You can keep telling the world that you have a premium product, but if the customers' experience doesn't match that, your image in the market will be tarnished.
I was fascinated to read Fred Wilson's American Express Blues a few days ago. You should go there and read it, including the comments. Fred has a lot of active commenters on his site, which makes an incredible conversation.
Fred describes his experience with Amex. He, his various funds, and his family have Amex cards. He's been a 'Member' for 26 years and never had a late payment. However, one of the funds (Flatiron) paid an Amex bill late. And, Amex shut off ALL of his cards without notifying him. Here's my favorite part:
When I called American Express to figure out what was wrong with my cards in the middle of the Flatiron situation, I was told it was their policy to shut down all accounts if there was a late payment on an account. I asked if my 26 year perfect credit with them was material to the situation and I was told it was not. I hung up on them.
The comments on Fred's blog include person after person who has had a similar experience. After being a good customer for a long time, something happens (which may be the customer's fault), and the response from Amex seemed very drastic. For a company that tried to position themselves as an elite brand, they aren't treating their customers like the 'Members' they purport them to be.
Nothing bothers a customer more than being betrayed by a brand that they bought into. If you are a customer of a premium brand, you want to be treated like a premium customer. You aren't surprised when the low-end retailer has poor service. You shop there for the lowest price. But, if you go to Nordstrom's, you expect fantastic service (and, since Nordstrom is successful, you almost always get it).
I've been betrayed by some brands over the years. I tend to hold very long grudges against these companies. The stories are so out of date that they aren't worth retelling here. And, some of these brands have gone out of business (no surprise). But, I won't do business with my own 'hate list' of brands in the future.
I decided to write this today after hearing a show on NPR yesterday about the future of the Republican Party. The story there was the same from the Republicans on the show. They had lost their way and gone against the fiscal bedrock of their party. Since they weren't true to their brand, their voters aren't true to them. I think that fiscal conservatism can and should be a strong force in the country. But, between not sticking to that and expanding their message beyond it, they alienated a lot of old-time Republicans and failed to attract a lot of new ones. They need to rebuild their brand, which should be interesting to watch.
For every entrepreneur starting a company, be sure that you can deliver on the implied promises that your brand is making to your customers. If you do so, your customers will be loyal. If you betray them, you are dead.