Simon Silvester examines the struggle of many service brands to differentiate themselves, and concludes that the key factor is failing to deliver on their promise to consumers.
Marketing a brand means making a promise to customers. Keep that promise over time, and you end up with a strong brand. But break that promise repeatedly, and customer loyalty, satisfaction and your brand all crumble. Every year, as a service chips away at what it offers, it breaks the promise of excellent customer service it has made. The result is weak service brands.
The evidence
In general, consumers feel markedly less positive about service brands than they do about consumer goods brands. The prime measures of a brand are its levels of differentiation, relevance, esteem and knowledge amongst the public. We have looked in the US at these measures for 1,407 product-based brands from juices to motor oils, and compared them with 300 service-based brands. Services are weaker on all four measures, but are particularly weak on differentiation. This is crucial; a high level of differentiation is the vital first step to building a strong brand. Without it, brands cannot signal to their prospects that they offer something different from the status quo and attract new custom; without differentiation, they are going nowhere.
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| Here, we have looked at four key diagnostics for 1,407 consumer goods brands from juices to motor oils, and compared them with 300 service brands. Services are weaker on all four measures, but are particularily weak on differentiation. A high level of differentiation is the vital first step to building a strong brand. Without it, service brands risk being perceived as commodities. |
Consumer goods brands tend to be strong, service brands tend to be weak
"But my service brand is strong."
Of course, many service companies may question the idea that their brand is weak. If so, they ought to consider the following:
Do you have a brand - or just a site?
Many service companies have research saying they have loyal customers who keep coming back. From this they infer that their brands are strong. But many of these services are retailers. And much of what retail research measures as loyalty comes from a retailer's local monopoly in the area close around their store.
If you live two minutes' walk from a supermarket, you are loyal to that supermarket, no matter how little you feel for it as a brand. Many consumer goods brands, on the other hand, have high loyalties even though it is no extra effort for their buyers to choose something else every time they buy.
These are strong brands.
Can your customers leave if they want to?
Banks in many countries argue that their customers are very loyal - indeed they point out that their customers are more likely to get divorced than to move their checking account.
A cynic might point out that a divorce involves less paperwork.
When the going gets tough, your customers get going
Consumer goods brands are tough - they survive crisis after crisis, decade after decade. Many of the leading consumer goods brands in America in 1923 - for instance Wrigley, Gillette and Ivory - are still leading brands today.
How many service brands from that time are still strong today?
Shape of a really strong service brand
The damage that constantly decreasing levels of service does to service brands becomes apparent when you look at a service brand that doesn't suffer from the rising labour costs problem. Singapore Airlines draws its flight attendants from a wide pool of South East Asian nations, where rising incomes in the cities are counterbalanced by lower living standards in rural areas. The airline has consequently not had to compromise on the numbers of flight attendants, nor on the quality of their training nor service for the past three decades.
As a result, Singapore Airlines is consistently rated better than any other airline by frequent global business travellers; and their 'Singapore Girl' advertising campaign, unchanged since 1973, has become the strongest brand property in the sky.
If you can't match Singapore Airlines' delivery, you shouldn't promise to your customers that you can.
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All these consumer goods brands were brand leaders in the US in 1923.
Can you name 10 leading service brands that even existed then?
Service brands are much less resilient than consumer goods brands. |
What if service brands were stronger?
If service brands were stronger, many good things might happen. For instance, strong productbased brands frequently make successful line extensions into other areas.
Vanilla Coke and Snickers Cruncher both owe their success to strong parent brands. Weak service brands have much greater difficulty extending themselves.
For years banks have been trying to extend themselves into being financial services supermarkets: but their brands are so weak that few consumers are keen to buy the insurance and investment products they offer.
If their brands were stronger, banks might find cross-selling easier.
Similarly, many retailers and other service brands suffer from razor-sharp price competition in their markets. Strong productbased brands rarely suffer from this: whether you choose a digital camera from Sony or from Nikon depends more on what you think of Sony and Nikon than on small fluctuations in their relative prices.
If services had stronger brands, they might be able to trade less on price too.
So what should services do?
Consumer goods brands are strong because they keep their promises every year - and more. But service brands tend to be weak because they leave a trail of broken promises behind them. Those promises, be they about employee empowerment, standards of customer care or responsiveness are basically promises about service by people. Perhaps they should therefore simply stop making them.
Source: Atticus 11 (2005), p3