Competitive quotient in a sector increases building a strong brand image

Building global brands in industries that are inherently service or project oriented are less about the doing, and more about knowing. It requires new organizational forms and new skill-sets to be fully exploited so as to keep the expectations of customers by the Brand.

In the current phase of the Indian growth story with significant untapped potential in many service sectors, one can still acquire customers through robust distribution and being available in the right place at the right time. However, as the competitive quotient in a sector increases the focus shifts to building a strong brand image that helps attract customers, encourages positive referrals and retains profitable customers. A deep understanding of what goes into building strong service brands is thus key to long term success.

Customers always have a set of expectations when they interact with the organization be it the first time or as part of an ongoing relationship. These expectations are formed based on advertising communication, word of mouth as well as past experience. The consequent interaction is the moment of truth – the point where the rubber hits the road, where expectations crystallize to reality and shape the perception in the customer’s mind of what the organization stands for. Over time, this perception translates to the ‘brand promise’ which customers expect from that organization. Moments of truth if managed well can strengthen the brand, enhance brand loyalty and become significant drivers of long term value creation. The converse is also true.

Service brands are thus built and destroyed over millions of moments of truth across hundreds of touch points of interaction. Strong service brands are those that are clear in what they promise to their customers (and what they don’t promise) and deliver that promise consistently across touch points. Developing a brand that resonates with customer and the employees is important for organizations.

Successful development of world class service brands requires alignment of three elements with the core brand promise – a) product and service offering, b) advertising communication, and what is often overlooked, c) business practices and employee behavior. Customers’ everyday experience indicates that this alignment is often absent and service organizations are unable to live up to the service experience they promise. This also suggests that of three elements, advertising communication has lesser influence on building strong service brands while business practices and employee behavior are critical if not the most important elements.

Over the years, marketers have picked up a few lessons on what it takes to build competitive presence in the global marketplace. Building a great brand is not enough because fulfilling brand expectations on a global stage is very difficult. A research firm has for their study taken the case of three firms, each of which has unique aspirations for building a global brand, in different sectors: telecom, IT services, and construction.

Each has done a relatively good job of building a brand that is recognizable the world-over, to the extent that they really stand out from the crowd. Their customers have come to believe they can expect some sort of a difference and are even willing to pay a premium for it. But this is where the trouble begins. These companies have no idea what their customers are looking for. And neither do their customers.

Today, everyone has great quality. In fact, the absence of great quality is considered unusual. The embarrassment of losing it could be extremely costly. It’s not economies of scale either. The markets in the businesses are inherently local and the benefit of being a global player does not translate to a price advantage for local customers.

Because of the sheer breadth of GE’s businesses, GE’s executives know more than those of Philips or Siemens. This is simply because they have the opportunity to see more. In seeing more and understanding how different value chains work they can presumably come up with more innovative solutions.

That is almost certainly what the customers in the three industries above believe, but what is so amazing is that they believe it as an article of faith.

Any firm that has figured out how to go global in these three naturally local businesses will be able to give the customers “more” of something, as a result of having seen so much. The very act of seeing globally, of recognizing the import of what is being seen elsewhere, and then being able to do something about it on a global stage; is not natural to organizations.