Cancelling the brand: what has Qantas really grounded?

The ramifications for the brand after Qantas’ decision to ground its entire fleet over the weekend are obvious. It’s a move that has no doubt put tens of thousands of people in a very bad mood and set the scenes in my view for an ongoing internal war that may well prove unrecoverable.

In brand terms, Qantas has done something equally damaging. In looking to force a regulatory decision, it has handed its competitors the perfect bridge: actions that discredit trust; and a prompted opportunity for customers to try out the opposition.

One of the most powerful incentives for change is doubt – that nagging, unrelenting feeling that somehow a brand is not what it used to be, or even worse that it cannot be taken at its word.

The other incentive is access to another channel that is viable, credible and that offers an opportunity to vent emotion.

Both incentives exist here. Meaning people now not only have a reason to walk, they have lots of gates to walk to. Domestically and internationally, competing airlines have been handed the chance to invite disaffected business fliers into their lounges, to convert frequent fliers to their own loyalty programmes, to offer incentives to secure the Xmas travelling public, and at the same time to look very much like the good guy.

There’s never been a better time for competitors to encourage people to fly another way.

I have a feeling this is going to get interesting.

Does efficiency jeopardise brand?

In the hunt for more streamlined businesses that are less resource intensive, how real is the risk that brands are actually putting people off dealing with them? When does an efficient process become so rationalised that it loses its humanity and therefore its appeal?

On the face of it, brand and efficiency have similar objectives. They’re both about creating financial headroom – but of course they approach that goal from opposite directions. Efficiency is so often about what can be subtracted. Brand is all about what can be added, at least perceptually, that people will pay more for.

The problem occurs when the experience is over-compromised in the interests of saving money: when the seats become too cramped; the aisles too narrow; the servings too small; the service too automated … Because it’s at that point, that delight leaves the building, and customers start looking elsewhere because they feel you’re being mean-spirited.

There are, as I see it, two ways to address this:

1. Set very clear customer expectations. If you’re running a high volume, scaled brand, make it very clear to customers why they’re getting what they’re getting. And when you make a change that delivers them perceived greater value, talk about that openly and clearly as well. I refer to this so much because it’s remarkable to me how many brands are vague about what customers are getting that they’re interested in for their money.

2. Make your efficiency drive as invisible to the customer as you can. In other words, focus on adding perceived value where you front customers and removing cost where you don’t. That way, customers won’t feel like they’re being short-changed. But remember that the two are not disconnected. There’s no point in having a nice shop window if there’s no infrastructure to support it.

One idea that I am interested in is the concept of an “efficiency dividend”, where you effectively reward the brand for streamlining by reinvesting a percentage of the savings made. Whilst this may appear contradictory at first, it’s in fact an investment in the long term health of the brand from short-term cut-backs. (I’ve advocated for the same idea in terms of channelling profits into innovation as well.) It helps ensure you don’t just cut the business off at the knees.

How you deliver is your brand’s business. But what you deliver is your customers’. In each case, that’s the party that feels most directly affected. So my three questions are always:

1. What can we add to the experience to make us more competitive?
2. How much is the business going to pay for that? (by way of efficiencies elsewhere)
3. How much more will customers pay for that? And for how long (before it becomes commoditised)?

Customers or passengers?

It’s amazing who we forget and how quickly. I don’t remember any of the people on the bus last week. Who did I ride home with last Thurday? My mind goes blank. It’s nothing personal – it’s simply that I have no reason to remember them. Or they me.

Exactly the same for most transactions that take place between people and brands. People get what they’re looking for, and then they go.

If you ask the people responsible for running brands what customers they want, they’ll often say “as many as possible” or “people who spend a lot” or this age group or that ethnic group – but that’s not what they really want at all. Because, when probed, they have no idea who they want as customers. They’ll take anyone whose buying. They just want the money.

And yet many of them spend their working days trying to get those very same people to value them above the myriad other offerings. To value them as more than just a price.

As Robert Kozinets has so rightly pointed out, one of the great fallacies about relationships is that brands tend to connect value and loyalty – but customers can actually be loyal and buy very little, or they can buy a lot and not be loyal at all.

So how should we judge a successful customer, and more particularly, a successful customer relationship? What motivates people to put faces to actions?

I think there are 9 sure signs that a relationship between a brand and a customer is healthy, personalised and mutually beneficial:

1. Consistency – there is a regular pattern to how, when and why people buy

2. Integrity – there are no hidden agendas on either side

3. Openness – facts and opinions are shared

4. Humour – people smile at the thought of being in each other’s company

5. Delight – there are pleasant surprises for everyone

6. Confidence – people believe in themselves and each other

7. Time – everyone is given the time they need to do the best work and to make the best decisions

8. Endorsement – names and experiences are shared

9. Value – everyone feels they have got what they needed to get, and more, out of each exchange

If you can remember each of your last three customer exchanges, try marking them against these criteria. If you’re honest, you’ll probably find there’s a spooky correlation between the marks you give and what you actually feel about the relationship with the people involved.

If you can’t remember the last three exchanges in detail, despite what the numbers might be telling you, you don’t have successful customers. You’re just negotiating traffic. And chances are, someone feels like they’re being taken for a ride.

Turning your brand into the authority

In this article in Business Week, Howard Schultz talks about how the mighty Starbucks brand lost its way – mistaking aroma rather than coffee for the core of its business and embraking on a strategy that saw it shift seriously off-course. The problem, as Schultz explains, is that by the time the company realised that they had diluted their brand position, breakfast sandwiches had become 3 percent of the company’s total revenue. Getting back on track was a big call. He did it anyway.

We talk a lot these days about thought leadership – but really, I see that as a component of a bigger objective: market authority. You may or may not want to be the biggest in a sector, but the article says there are three actions that you need to take if you have lost your mojo and, like Starbucks, are looking to re-establish brand authority.

I actually picked up five:

The first decision is obvious – decide what you want to be the authority in as a brand, and keep the faith. Schiltz recognised that while CDs, movies, and breakfast sandwiches all represented revenue streams, they also cluttered stores, diluted the brand and eroded its authority.

The second decision is about doing everything you can to retain and foster that authority. In Starbucks’ case, that meant perfecting new roasts and shutting down every store in North America for an afternoon to retrain its baristas.

Thirdly, stop doing those things that don’t reinforce your authority, even if they were your ideas in the first place.

Fourthly, stay away from the middle ground – because while that common congregating place might be the most comforting, especially in softer market environments, it is also the place you are most likely to suffocate any authority you had in the marketplace. It is the place where you are least likely to cultivate distinction.

Finally, to be the authority, share responsibility for being the authority with the whole workforce: “… make it clear to employees everywhere … that each tiny decision they make is just one more opportunity to passionately and obsessively move the company in the right direction, not the common direction.” Get there one action and one person at a time.