Millions of people around the world were shocked to learn that Kodak has filed for bankruptcy. The question on everybody’s lips was ‘how is it possible that an organisation the size of Kodak, with a name that is truly iconic in the world of photography, could possibly have allowed itself to reach this dismal situation?’
The official reason, given by Kodak’s chief financial officer, Antoinette P. McCorvey, was: “…despite Kodak’s best efforts, restructuring costs and recessionary forces have continued to negatively impact the company’s liquidity position.”
Allow me, if I may, to paraphrase. “We stopped listening to our customers about the products and experiences they wanted and, as a result, our competitors leapfrogged us and took our market share.”
Sure the recessionary environment has put many global businesses under pressure, but those pressures are the same no matter which business you own. So how is it possible that just a week or two after Kodak goes bust, Apple – another iconic global electronics brand – declares quarterly profits of well over 100%?
The truth of Kodak’s demise lies in a simple comparison of these two companies. Apple is in touch with its customers. It knows what they want, how they want it packaged, and how much they are wiling to pay for it. And it delivers on these customer desires. Kodak doesn’t. Pure and simple.
Fortunately for us other business owners, Kodak’s demise is not a total loss. It offers some very valuable reminders of just how important it is to keep listening to your customers. And while we’re all in business to make money, the day we become so focused on that money that we forget who it is that ultimately hands it over to us, we effectively lose a grip on our business.
The irony is that Kodak has received a financial ‘bailout’ package that will allow it to keep trading through its bankruptcy proceedings in the hope of fixing its problems. And the solution they are proposing is to sell off as many of their patents as they can. Which only goes to show that the company still hasn’t learnt its lesson. Sure, selling patents may cover their debts for now, but unless they start having real conversations with the people who should be buying their products, they are destined to fail again.
Modern business success is built on client centricity. Simple as it sounds, Kodak (and any other business) could flourish simply by making sure they have opened all possible channels of customer communication, every single one of their employees – including their CEO, Chairman and corner shop salesman – understands the importance of listening to and serving the customer. And doing the occasional customer survey to determine whether they are getting it right won’t go amiss either!
Put simply, the ability to invite, listen to, and act on, customer feedback is a cornerstone of sustainable business. This is a universal truth, whether you’re a multi-national organisation the size of Kodak, or a small start-up with big aspirations of one day competing with global companies. And you ignore it at your peril; because doing so is sure to results in unhappy, unsmiling customers, who could be gone in a moment.
Just ask Kodak.
Companies often spend many hours and many thousands of rand on developing their brand slogan or ‘tag line’. And so they should. This catch phrase has the potential to become the one thing that places them top of mind amongst their customers and prospects by describing the kind of customer experience they can expect when dealing with the organisation.
Over time, the correct brand slogan can often become as powerful as the brand name it supports. Take Nike’s ‘Just Do It’ for instance. There are few people in the world who would even need to see the Nike name to know which brand this hugely successful slogan belongs to. Other excellent examples include Snap, Crackle, Pop; Everywhere you go; and I’m lovin’ it.
What makes these such successful slogans for their respective brands is the fact that the organisations to which they apply have understood, from the outset, that their slogan is not just a cute string of words; it’s a promise made by their brand to their customers. Kelloggs, for instance, knows that if their Rice Krispies are not absolutely fresh, Snap, Crackle, Pop is likely to be reduced to Wheeze, Splutter, Sink. So they have put in place every possible quality standard and control in place to make sure their product lives up to its promise.
Unfortunately that’s not always the case. Many companies still fall into the trap of developing brand slogans that actually end up being brand destroyers rather than builders. That’s because these slogans raise the customer’s expectation of an excellent experience, but the delivery of such an experience by a company never quite delivers on the brand promise it makes.
Take Standard Bank’s ‘Simpler. Better. Faster.’ slogan of a few years back. While it’s a fantastic customer experience promise, it’s virtually impossible to deliver 100% of the time – even if your company is filled with passionate customer service champions. And every time you fail to live up to the promise, your brand dies a little in the mind of your customers. Small wonder this particular tag line quickly gave way to the more realistic (and less specific) promise of ‘Moving Forward’.
A further example of a particularly challenging South African brand promise comes from another of our banks. This time it’s FNB’s promise of service excellence implied in its ‘How can we help you?’ slogan. On the face of it, this is an excellent tag line. It promises a bank that’s ready, willing and able to be there for its customers and deliver whatever service they need to realise their personal objectives. Unfortunately, it’s also a promise that any company would be very hard pressed to keep. And I know I’m not alone when I say that every time I encounter internet banking problems, am kept waiting in a branch, or have to deal with a disempowered employee that actually can’t help me, the ‘How can we help you?’ brand slogan rings loudly in my ears as a very false promise.
Ask any parent and they’ll tell you that the cardinal sin of parenting is breaking your promises to your kids. It leaves them disappointed, disillusioned and a little less trusting of what you promise in the future. And customers are no different. Which is why, if you are serious about creating brilliant customer experiences, you need to understand that it starts with your company slogan and the expectations it creates. So, if your business has a slogan, make sure it’s a promise you can always keep.
By: Nathalie Schooling
According to Statistics SA, in September 2011 alone, 330 South African businesses closed their doors. Of these 65 were in the wholesale, retail trade, catering or accommodation categories. That’s shops, restaurants and hotels or B&Bs that are now out of business.
Some were voluntary closures; others were forced liquidations; all tell a sad story of lost potential, money and jobs. Clearly South Africa still finds itself in very challenging economic times. And while you can’t presume that all the business closures in September or, indeed, the whole of 2011 were only due to the economic environment, it’s safe to assume that many of these businesses simply couldn’t survive the recent decline in business and customers.
Looking further back, since the beginning of the year, a staggering 2 475 South African businesses have closed. 619 of these were in the wholesale, retail trade, catering and accommodation categories. On the positive side – if you can find a positive side to business closures – this figure is actually down from the same period in 2010, which saw 2 930 companies shut down.
But despite this decline in closures year-on-year, the truth is that almost 2 500 businesses have stopped trading in the past nine months – and that’s a lot no matter how you look at it!
As a customer service professional, I have to ask the question: “How many of these businesses might still have been trading, if they had paid more attention to keeping their customers happy?” While I’m not implying that customer service is a ‘silver bullet’ solution to challenging economic conditions, there can be no doubt that businesses that place little priority on creating great customer experiences are bound to suffer the ill effects of a recession more than those that have always kept their customers happy.
Nowhere is this more obvious, particularly during the festive season, than the restaurant industry.
While it’s natural for restaurant owners to want to capitalize on higher patron numbers to shore up their finances for what promises to be an equally challenging 2012, doing so at the expense of good customer experiences is tantamount to business suicide. In other words, if your restaurant is enjoying an increase in reservations, but you don’t want to incur higher overheads by employing some extra staff to meet the growing demand, there’s a good chance this may be your last good season. In fact, it may end up being your last season. Period.
While people expect to wait longer for service during the busy times, they don’t expect to be neglected, subjected to poor quality, or have a terrible experience. And that applies whether they are visiting a restaurant or visiting the mall.
So, if your business desires a merry Christmas and prosperous New Year, stay focused on offering great customer experiences, rather than fixating on short-term turnover. Rather than being a cost consideration, see it as an opportunity to stand out from the poor service crowd. In the process, you’ll not only boost their bottom line, you’ll also potentially win some long-term, loyal customers. Which is the best way to ensure your business doesn’t find itself on the next Statistics SA “closures” list.