How a bad internal negotiation could kill a brand

There are many ways to kill a brand, some achieving this deadly result faster than others. Screwing up the customer relationship is, in my opinion, the “most successful” one.

I recently had a truly awful customer experience from one of my beloved brands. After the initial shock, I tried to understand why this happened, and the conclusion I reached is that the company manufacturing the brand decided to put the profits well ahead of the customers’ needs. We all see this happening increasingly more nowadays,  and I strongly believe that, at the core, the issue is that the financial department won the internal negotiation with the brand team.

So, what actually happened? Ever since I started shaving I joined the club of electric shavers, being faithful to a well known brand (let’s call it “THE Shaver”). Over 25+ years I have been extremely satisfied with the performance of “THE Shaver’s” products, always buying the most recent upgrades. Naturally, their products, while being very reliable, still faced occasional techical issues that led me to their BRAND service. What impressed me is that “THE Shaver” did not compromise the quality of their customer service and decided to have their OWN SERVICE, with 2 engineers who were specialized in all their products and who solved all issues in maximum 24 hours! The service also carried a small stock of ALL the spare parts that one could need, so 90% of my issues were solved on the spot or in a few hours! They also had permanent stock of all brand’s consumables, so I could buy on the spot everything I needed, like the cleaning liquid, the foil and cutter replacement etc. And the cherry on the cake: the service was always done with a genuine smile, so I truly felt the brand truly CARED for me! How is that for a world-class customer experience?

Two weeks ago I had a small issue with my electric shaver, so I headed to the service to see what happened. But, when I got there, I was welcomed by an A4 poster on the door, informing me that the brand service had been closed and all repairings will be done by a multibrand service. I could not believe my eyes! “THE Shaver” decided to join the ranks of many other brands who use these multibrand services, as they (probably) provide better cost efficiency for the brand (=lower servicing costs), even if the customer experience is a far cry from the one offered by a dedicated brand service.

As I needed a specialist opinion regarding my shaver, I headed towards that multibrand service, where a the receptionist, after welcoming me, told me that the diagnose will be done remotely (no techical staff existed on site) and will take between 1 and 2 weeks to be done! After the diagnosis, if I agree with the repair cost, this step will take another 1-2 weeks. So, in the best case, I would be left without my shaver for 2 weeks, in the worst case for 4 weeks. Now, contrast that with the time of maximum 1 day in which ALL my other issues were fixed by the (now “deceased”) brand service! 2-4 weeks vs maximum 1 day: how is that for a “customer focused approach” of a brand??

To cut to the chase, it was immediately obvious to me that the company producting “THE Shaver” switched the focus to “maximizing the bottom line” by all means, even if this is seriously undermining the customer experience. In other words, the Brand team lost the internal negotiation with Finance! Could they have won it? ABSOLUTELY YES! And here are some arguments that the Brand could have used in this internal negotiation:

1. A successful brand DIFFERENTIATES positively from competition. This can be done at brand benefits level but also at customer experience level. We see that the product performance differentiation is significantly more difficult to achieve nowaways, as brands from a certain category use relatively similar technologies. Therefore, the customer experience plays an increasingly more important role. Screw this up and the product benefit differentiation will not be enough to keep the customers in the brand franchise.

2. While the costs of having a brand service are higher, the postive customer experience of this model builds the brand longer term. And the negative customer experince of a multibrand service hits the brand image short term, thus leading to negative word of mouth, negative reviews etc. 

3. Before killing a proven-successful service model that contributed greatly to making “THE Shaver” the clear category leader, I would have suggested to the brand team to run a research to understand the customer reaction following such a change. This would have been like a “disaster check”, helping avoid costly mistakes.

By the way, after I was told the cost of the diagnosis, I also realized that any savings made by this switch went 100% to the brand’s bottom line and nothing to decreasing the servicing costs for the customers…

Time will tell if I am right or not. I hope I exaggerated in this blog, yet I cannot refrain from recalling the 3 key lessons I learned in my first day at work with a leading FMCG company:

– Always put the customer first and understand his/her needs better than anyone else

– Always do the right thing for your customer/consumer, whater it takes

– Go to GEMBA – go to the place where things truly happen (where the consumer uses your product, to the factory producing your product, to the store where the shopper purchases it etc).

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