Your Service Is Broken

Building Brands With A Fix

Today Seth Godin re-posted his classic customer experience presentation This Is Broken (watch it now if you haven’t) and reminded us that sadly little progress has been made.  What strikes me when you hear his 7 points again are how many are service specific. I guess it’s easier to fix products than people.

A while back I read an interesting post from Richard Branson on Virgin. He states that ‘of the Top 20 brands in the world, Virgin is the only one that does not play in a well-defined trade’ (i.e. Nike in athletics, Microsoft in computers). Virgin, rather, is a $5B way of life brand that aims to make people happier across a range of business activities, including airlines, trains, holidays, mobile phones, media, financial services and healthcare. As Branson says this “really gets up the noses of people who think they know ‘the rules of business’ (whatever they are).”

In an article last week from the economist, Zappos’ Tony Hsieh spoke of how he admired the Virgin Group’s exceptional growth model, and might one day take Zappos down a similar path:

From its origins as an online shoe-retailer founded in 1999, the company has expanded into selling clothes, consumer electronics and other items. Last year it rang up a record $1 billion in sales even as other retailers were struggling. Mr Hsieh muses out loud about the possibility that Zappos might one day enter the hotel or airline industries, perhaps in the offline world.

He reckons Zappos can cultivate a reputation for outstanding customer service to the point where it, too, can become a springboard into several markets. He once described Zappos as “a service company that just happens to sell shoes”.

What all this says to me is that in this fragmented, small brand, value-based market, there is still a role for larger companies that stand for consumer trust. But trust today is less about product quality than ever (because pretty good is price of entry). Instead, companies like Virgin and Zappos will succeed because they offer an exceptional service fix.