On with the show

Oh Mickey, you’re so fine

Aside from the usual rubber chicken and three-inch-wide movies, most of my long flight yesterday, and a rather intimidating trip on the A-train into Manhattan, was taken up with reading Lewis P Carbone’s Clued In.

This amazing book provides a method for understanding customers, products and brands that not only fits the classic American hospitality industries of the 70s (which is where Carbone’s own interest was kindled by his work with clients including Disney at Epcot) but the new moves away from mass-communication and towards brands and reputations. His system doesn’t need re-invention for the noughties. It comes millennium proofed, with massive relevance to the new consumer and even the way digital interfaces must work.

And it is incredibly accessible. It’s amazing to see ideas that have been washing around my brain half-baked given a clear articulate voice.

Carbone starts with the premise that the accountants and management consultants have caused us to lose focus on a key fact – that the “value” our companies produce must be measured in terms of what the customer wants not just the bottom line of pounds and pence. Sound obvious? Well look what’s happening to the airline industry. In the name of low prices, we now have to put up with non-predicatable pricing models, literally no service on the (low cost) flights, being bumped and moved around, fighting over chairs  (on EasyJet) and being routed through multiple stops. Carbone points to JetBlue and Southwest who have both consistently posted profit in a market which is otherwise falling apart. Southwest publicly explains their philosophy for business

More than 30 years ago, Rollin King and Herb Kelleher got together and decided to start a different kind of airline. They began with one simple notion: If you get passangers to their destinations when they want to get there, on time, at the lowest possible fares, and make darn sure they have a good time doing it, people will fly your airline. And you know what they’re right.

As Carbone goes on to say, it’s not precisely about having a good time (flying on any low-cost carrier is not going to be a week at the Four Seasons), it’s about feeling good about the time you’re having.

And here we get to what I think is the central insight. The question brand marketers often ask is “how does you customer feel about the brand”. Ask a customer that question and you will get an abstract post-rationalised answer back. Instead, Carbone suggests, we should focus on how the customer feels when they’re interacting your brand. The negative feelings that we have when companies who provide poor customer service are actually negative feelings about ourselves that have been created by the experience.

For the experience to work, it must be authentic and it must connect on an emotional level as well as a functional one. He points to a survey which shows that defecting customers are likely to say they are “satisfied” on customer service score cards (i.e. not “dissatisfied”, “neutral” or “very satisfied”). To bread the sort of customer advocates we need nowadays, we need to be aiming for customers who thoroughly enjoy the whole experience and come to expect a fantastic experience on future vists; customers who enjoyed your experience so much that they are willing to put their own reputations at stake and recommend it.

As a brief  aside, Carbone is looking at established retail chains so does not dwell on purely funtional issues, assuming that all outlets achieve “hygiene” levels of service. Obviously, this is far from being the case online, where far too many mistakes have been made in the name of emotional design).

Where’s this working in practice? Taking roughly equal sellers of a commodity product – Krispy Kreme and Dunkin’ Donughts, Carbone shows that the product itself is a small part of the value proposition, with a focus on customer experience driving the lion’s share of the value. Krispy Kreme sells more (of essentially the same thing), at a higher price, with less advertising to a more enthusiastic audience.

He maintains this is possible in any market or scenario, showing how it’s been applied even in emergency rooms int the US and in the development of campus sports facilities.

My old boss had a great epxression about all this. Traditional wisdom has it that “If you take care of the pennies, the pounds will take care of themselves”. Kim Conchie’s version was

If you take care of the pennies, you’ll end up with a big pile of pennies

Businesses that drive ‘shareholder value’ by cost-cutting and commoditising their product will end up with a bigger and bigger share of a smaller and smaller market, as new entrants, redefine their products around customer expereince.

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  1. […] about what it means for brands to differentiate themselves through experience, in particular in the context of, Lewis Carbone’s excellent book Clued […]

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