Expanding into new global markets? Get your complete cross border checklist.
Welcome Guest | Sign In
ECommerceTimes.com

Saving Your Company From a Brand Wave Wipeout

By Jeff Kagan
Jul 28, 2011 5:00 AM PT

We always think the next generation is better. Often that is true -- but too often, it's worse. On the heels of success, too many companies take their eye off the ball. Every year, new and improved versions are introduced to keep us brand-loyal. That works until something goes wrong. Then years of valuable brand building simply collapse.

Saving Your Company From a Brand Wave Wipeout

This up-and-down movement is the Brand Wave. We see this implosion too often with just about every brand. I'll illustrate this trend with several examples and suggest some remedies.

Then, in my Pick of the Week, I'll you about ZocDoc, a new company that is making it easier to set an immediate appointment with a doctor wherever you are, whether at home or while traveling.

The Amnesia of Success

I mention the Wave frequently -- this time, I'll focus on the Wave in relationship to your brand.

The Brand Wave builds as a company does things right and continues to grow on the upside. Then it always seems to take its eye off the ball and hurt the brand value. That starts their journey down the other side.

Why do so many companies spend years building a valuable brand relationship with the customer and then lose it overnight? I don't think they realize the damage they are doing until it's too late.

They start out hungry. Work hard over years to build strong relationships. Then they begin to believe they are greater than they actually are. They start to believe their own story and they take their eye off the customer.

It's not part of a corporate plan, but it does happen, because executives love to win and eventually forget what brought them success.

They take their eye off the ball. No executive would choose to damage the brand and lose business. Yet it happens every day to countless executives, companies and brands.

This costly mistake is made too often by either changing the focus and design, or through new and different versions of products or services that many existing users don't like or want.

Basking in the glow of success, executives forget the ultimate judge is the customer -- period.

Relationships Must Be Nurtured

When a company lowers quality and reliability, its customer relationships are damaged. That means instead of just buying the next version of your product, your customers will shop around for a competitor's brand. This is the serious problem you want to avoid. You want them to love your product and simply replace it with a newer model.

Also, when a company radically reinvents the design of its products and stops producing what existing customers have grown to love, it is saying "sorry, we are moving on, with or without you." That attitude tells customers they are no longer important. This is another serious problem. You have to continually court your customers -- it's much like a marriage.

You might ask what company would say goodbye to a large percentage of its customer base? Yet it happens every day. After a few years of success, every executive feels certain about what customers want.

They seem to forget it took years and money to build good customer relationships, yet it only takes a moment and a bad decision to lose them.

If you think the competitive marketplace is pressuring you to create a radical new design, fine. Add that new design to your offerings, but don't take away what your customers have grown to like about you. Let customers continue to be happy buying what they know and want.

All customers are not early adopters. Executives tend to forget this. The problem comes when companies take away what customers love and introduce something totally new. This may please a slice of the consumer pie, but it also tells a larger slice they are not important.

Turning your back on the customer like this costs you business. You cannot force a customer. When you try, you break up the long-term trust and relationship you have carefully been building.

3 Disappointments

Tell me the companies or products you can think of that fit this broken model. Here are a few personal illustrations -- I am sure you can think of your own handful.

Hamilton Beach built a very strong brand relationship with me. I finally found a coffee maker I loved, the Brew Station. I could have been a Hamilton Beach customer forever.

However, a few years after creating this perfect design, the company changed it to save money. The new version was thinner and felt cheaper. It was more difficult to use and messier. Water and coffee drips on the counter.

This was suddenly no longer a good product. Hamilton Beach broke the long-term relationship it initially built with me.

Perhaps since the new model cost less to make, it thought profits would be higher. What the company missed is that I am no longer happy. So I may not buy from it again. That means Hamilton Beach loses.

Another example is Palm. As an analyst, companies send me phones on an ongoing basis to use and compare. Until about five years ago, Palm was my favorite because of the simplicity and design -- it had the features I needed.

Each version of the Palm OS was a little better than the last, and I was very happy. I considered myself a long-term Palm user.

What did Palm do? It changed the operating system to webOS. It did more, and had additional features, like GPS, but I did not like it as much as the original version.

The worst part is, it stopped making the Palm OS devices, and I was suddenly dealing with a new OS that I did not like as much.

It turned its back on all its happy customers who loved the Palm OS. It should have continued to update the Palm OS while introducing the new webOS and let the customers choose.

Since then, Palm failed and was acquired by HP, which is trying to resuscitate it. It is using the webOS in its new tablet computers and smartphones. Palm users loved the earlier devices but felt abandoned by the company.

Another example is Chrysler. My wife and I have been a fan of its Town and Country minivans. We've bought a new van every three years over the past 25 years. We tried different brands but decided the Chrysler was the best for us.

Each purchase was better than the previous one, and it built our brand loyalty and connection with the company. We were happy long-term customers.

However, the last van Chrysler made was suddenly worse instead of better. There were so many problems -- like the handling, wind noise from the sunroof, chipped paint on the dash, leaking air conditioner fluid inside, failure of the transmission and plenty more. Suddenly the van we loved was a big problem.

Chrysler destroyed our brand loyalty. We did not feel comfortable taking it on trips any longer. So we sold it and purchased a replacement a few months ago. This was the first time in as long as I can remember that we did not buy a Chrysler.

Update but Don't Eliminate

There are so many more illustrations of companies that have ridden the Wave up, then down again. Companies like Qwest, Motorola, Nokia, RIM and many others.

There are also companies that have successfully created the next Wave, like IBM, AT&T and Verizon. When one product line weakened, they had the next ready to go.

It's a completely new battle every few years, as one Wave crosses over the top and starts the decline. Companies that can do this dance can continue to win by creating another Wave to ride. Companies that cannot will decline.

Remember the meaning of the power of the brand. The power of the brand swings both ways. It can build, or it can cut. It takes years to build, but only a moment to lose.

Brand implosion happens every day. Companies either continue to build their brand and get stronger over time, or they hurt themselves overnight.

One secret is to hang on to your existing technology in order to hang on to your brand relationship with your customers. It's OK to update but not to eliminate. At the same time, you can introduce completely new and different versions and let them grow.

Remember, you are not the most important piece of the puzzle. Your customers are king. They are the source of your success or failure.

Advertising and marketing can steer a marketplace, but that is only one part of creating a successful brand. The brand is much deeper than a jingle. It is a quality relationship that must continue to be built.

It's your customers who buy your stuff, and they control everything. Without customers, you are out of business.

It's that simple -- yet company after company continues to make these serious mistakes. You may think you are king because of your success, but the customer ultimately rules.

Send me your examples of companies, products or individuals who have successfully built their brand and then damaged it. I will write about this again and would love to discuss them.
Jeff Kagan's Pick of the Week

My Pick of the Week is ZocDoc, a company with a strange name that is solving a common problem. Did you ever need to see a doctor in an emergency at home or while traveling? Many of us have, and many of us have been stuck waiting days or weeks for the first available time.

Now ZocDoc helps you find the right doctor, wherever you are, immediately. It solves a real problem. It can find immediate appointments, whereas before it took an average 11-day wait.

This is a new company with operations in nine cities across the United States so far. It has aggressive growth plans and several big name investors like Jeff Bezos, the founder of Amazon.com; Mark Benioff, the CEO of Salesforce.com; Khosia Ventures; and angel Ron Conway.

ZocDoc CEO Cyrus Massoumi said he was inspired when he ruptured his eardrum while on a trip and couldn't find a doctor to see him right away. Looks like he saw a real opportunity in all that pain.

The company plans to expand its workforce and cities covered. If successful, it could become a real player in the healthcare arena. Keep up the impressive work, Cyrus!


Jeff Kagan is an E-Commerce Times columnist and tech analyst following wireless, telecom, healthcare and technology. He is also an author, speaker and consultant. Email him at jeff@jeffKAGAN.com. Read the first chapters of his new book Life After Stroke, now available at Amazon.com and Barnes & Noble.


Digital River - Cross Border Commerce Checklist
Which most influences your decision to accept a LinkedIn invite from a stranger?
Groups or interests we have in common
Personal message they included with the invitation
Relevance of their industry or experience to my own
Size of their network and/or how many connections we have in common
Thoroughness and credibility of their LinkedIn profile
All of the above -- I am meticulous about whom I allow in my network
None of the above -- I accept all LinkedIn invites
When it comes to CX, ALMOST IS NOT GOOD ENOUGH