Monthly Archives: October 2008

Branded Utility

In last weeks NMA (09/10/08), Mike Nutley wrote under the heading “the cost of success is keeping it going”. He was referring to organisations, such as Nike, that create campaigns such as Nike+ and then get either lumbered with the ongoing running costs or risk disenfranchising a large group of their potentially, most loyal supporters. He credited Paul Dawson of Conchango with referring to the phenomena as “branded utility”.

Nike+ has been enormously successful attracting thousands of runners and creating a community which supports them. The problem is that once created, the community needs to be supported or it will die. The cost of the support restricts the brands from developing the next big idea and this is where the problem lies, according to Nutley.

This seems like a crazy situation to me and it is hard to believe of Nike. Nike’s mission is “to bring inspiration and innovation to every athlete in the world”. They define an athlete as follows: “If you have a body, you are an athlete.” Nike has already gone beyond being a sports apparel brand and has created a vision beyond this. If they do suffer this problem then it can only exist because the ongoing running costs are treated as a campaign when they should, in my view, be treated as a cost of sales.

Assuming the campaign adds value to the brand (and if it doesn’t it should probably be canned) it should be possible to calculate the ROI from the ongoing activity. What started out as a campaign is now clearly a product or service extension. They have created a brand that is more to consumers than just that of a product manufacturer. That comes at a cost, but also presents significant opportunities if thought about differently.

I think the point Nutley makes is a good one and I would be fascinated to understand if Nike really suffer from this issue. It is easy to believe that their are major brands operating without a clear view of their offering or who feel they should jump on the engagement band wagon and have created a monster that is now consuming them – or at least their budget. My suggestion of treating these campaigns as products, with a P&L and ROI contribution means they also benefit from being viewed against a lifecycle. This will assist the business with investment decisions and provide a management framework that is already familiar.

10% of you have listened to people having sex!

This was just one of the many statistics provided to call centre operatives by Tim Bishop, Head of Strategy for programme and awards sponsor Siemens at last nights gala dinner and awards ceremony for the ‘Top 50 Call Centres‘. The evening celebrated customer service excellence and the atmosphere from the outset was palpable. The screen behind the stage rotated the logos of the top 50 companies, and there was a cheer from each group every time their logo appeared. The auditory Mexican wave was something to behold and went on throughout the dinner until the awards ceremony proper began. After an hour or so of continued, and increasingly enthusiastic cheering, I began to realise how little positive recognition the call centre operatives receive and also how competitive they are.

Top 50 presenter Eamonn Holmes
Top 50 presenter Eamonn Holmes

Eamonn Holmes hosted the evening and presented the awards and was an excellent speaker. He particularly enjoyed congratulating the team of nine very attractive ladies and one ‘fella’ from Holiday Extras who won the best overall in the Entertainment, Leisure and Travel category.  He even took the trouble to visit their table after the awards had ended and congratulate them personally. What a martyr!

The awards are the brain child of Claudia Hathway, Editor of CCF magazine who opened the event with a rousing speech about how call centre operatives were unrecognised for the good work they do. She set a challenge for all companies to achieve an average of 95% satisfaction next year, which looks like a tough target if you ignore how competitive these people are. The data was pulled together by mystery shopping partner GFK NOP who carried out the biggest ever survey of its kind gathering real customer experience data based on real consumer feedback. And the competition was very close with only 1 1/2% separating the top 5 call centres.

So finally, here are the winners:

  • 1st was First Direct, who were also 1st in the Financial Services category. They achieved an overall satisfaction score of 91.73%.
  • Denplan were narrowly beaten into second place with 91.32%
  • 3rd was F&C Investments with 91.26%
  • 4th overall was Lloyds TSB Insurance with 91.02%
  • 5th and also best in the retail category was Laithwaites with 90.36%
  • 6th Prudential with 89.33%
  • 7th with 89.29% Charles Tyrwhitt
  • 8th ING Direct with 87.89%
  • 9th was Specsavers with 87.57%
  • 10th and also winners in the public sector category were Cambridgeshire County Council with a customer service rating of 87.13%
  • Holiday Extras won the best in Entertainment/Leisure and Travel category with a rating of 85%

Given our recent study in to the travel sector the low overall score and lowest category score is of no surprise and clearly, for all the celebrating last night, this sector has a lot to do.

G1 launches

The G1 by T-Mobile and the worlds first phone that runs on Google’s Android application launched 23rd September. This is a major development in the mobile phone industry but not in the way the iphone was. Although all the phone manufacturers are trying to catch up with the Apple iphone’s usability the G1 launch signifies a shift in the underlying mobile manufacturing business model. Remember this event because in the history of mobile it will prove to be a major turning point.

Travolution Question Time – Sept 23rd

I was lucky enough to be invited to the Travolution Question Time which was held on 23rd September at the Soho Hotel. The evening was very interesting, particularly with the timing following the collapse of XL and the Channel Tunnel fire and the economic outlook loomed large over most of the discussion. Indeed, nearly every question had an economic undertone.

The panel consisted of various luminaries from the travel sector and included Justin Cooke, CEO of Fortune Cookie, the event sponsors, or as question master and Travolution Editor Kevin May introduced him quoting Management Today “the internet in human form”. The rest of the panel was formed of Mark Tanzer, chief executive, Abta, Paul Evans, chief executive, Lowcostbeds Group, Matt Cheevers, managing director, Teletext Holidays and Chris Loughlin, managing director Europe, Travelzoo.

There was a great deal of discussion about how the worsening economy would impact the travel sector and most of the panelist offered views consistent with industry research. This shows that holidays are the last area of expenditure that consumers cut back on in a slow down or recession. However stats offered by Matt Cheevers showed that searches for cheap holidays are down year on year. Last year there was a drop in September of -6% for cheap holiday searches whereas this year the drop is -26%.

One of the many interesting points made concerned the positive impact of a recession. One panellist told of the 2001 slowdown and how it had removed the silos in the industry. Our recent research indicated that silos are a real problem in delivering a decent customer experience. With multi-channel user experience becoming increasingly important this could be a real benefit to organisations and in particular to consumers.

Finally, one of the panelists mentioned a website where disgruntled passengers and employees of United Airlines were venting their frustration. The website is called ‘Untied‘ and was created following an incident in 1996. It is well worth a look and demonstrates how delivering a bad customer experience can come back and bite you.

The wisdom of the crowd

There is a new book out by Jeff Howe titled: “Crowdsourcing: Why the Power of the Crowd is Driving the Future of Business.” The book takes forward the ideas Jeff presented in an article in 2006 for Wired and that have been used in many books and articles since. A book I recently reviewed by Gary Hamel called Future of Management also used crowdsourcing as a central theme for how companies will compete in the future. This book and the blog are worth a look.