Jul 31, 2008

Mktg - Smart Service,loyal customers

knew companies were entering a brave new world when Procter & Gamble introduced its promising new olestra product Olean, a no-calorie oil that was thirty years in the making. But despite all the buzz, and anticipation over the exciting new product, P&G had a serious problem: Olean was being hammered by activist groups like the Center for Science in the Public Interest (CSPI), who claimed it had unsafe, not to mention unpleasant, side effects like abdominal cramping and diarrhea, or what the Food and Drug Administration labeled as “loose stool.”
Unfortunately for P&G, CSPI posted this damaging information on its Web site, then circulated it to health advocacy groups and consumers throughout the Web. Internet communities soon seized on and satirised the term anal leakage, and the mainstream media played up CSPI’s side of the story.
And while P&G complied with the FDA’s labeling requirements, did its best to be transparent about documented problems with Olean/ olestra consumption, and spent a great deal of time responding to almost relentless CSPI claims, the bottom line was that Olean failed to live up to consumers’ expectations on a number of other fronts as well, most notably its taste was unappealing and its price was too high. as a result, within roughly three years, sales fell sharply, from $400 to $200 million.
By contrast, when Procter & Gamble launched Febreze as a way to reduce or eliminate odors (unlike air fresheners, Febreze is a spray-on odor remover that can be used for pets, in cars, and in places other than the home), it was considered a breakthrough product.
As a result, it generated many conversations online--mostly among parents and homemakers who had tried or were curious to try the new product. At first, this online chatter helped to build momentum and positive attention for the brand. But soon, that same network began to fuel a number of unfounded rumors, such as the allegation that Febreze is toxic for pets. Despite all the negative publicity, Febreze maintained its credibility as a reliable product because P&G’s forthright and transparent communications strategy addressed the misinformation and held sway over the negative buzz.
Today, Febreze remains one of the company’s most successful products, with multiple spin-off products. Of course, one of the other reasons that Febreze successfully managed the problem was that the rumors regarding its product were untrue, as opposed to the concerns about Olean, which were very real.
In all my years studying companies and brands, one truth has consistently endured: Great brands and great products reap the richest CGM benefits. This may seem obvious, but if you don't get it right, consumers not only won’t buy your stuff but will skewer you with CGM as well. the rule of product performance applies to all categories, from autos and electronics to everyday household items, like soap or diapers. If the product or service under performs, CGM creators will not hesitate to make it known. Conversely, great products can inspire incredible amounts of free advertising and publicity.
In fact, the 2007 Nielsen study, drawn from nearly 70,000 consumer panels, found that “product experience” is the number one motivator of CGM creation; nearly 55 percent of consumers determined to be active “speakers”—or creators of CGM— noted that liking a product was the top motivator for “posting content to a Web site, blog, or message board.”
Intuitively, this makes sense. Why would consumers commit to a brand that didn’t work? And if you have a great brand or product, consumers will want to recommend it to other consumers. The brand experience then provides a credible and genuine context for dialogue between consumers. This is one of the reasons why, despite its detractors, the Starbucks brand continues to be credible — people simply like the coffee.
Many companies have gained a competitive advantage thanks to attentive advocates of their products.
Early sales of Sony Play- Station skyrocketed after detailed reviews by consumers appeared online. Lexus sales have benefited because buyers of these luxury cars are also unusually effusive in their commentary on message boards and online forums. Even some health-care companies have reaped benefits from patients blogging about good experiences with their products and services.
Of course, this environment can be equally punishing to products that have shortcomings, as the consumers who write the reviews tend to be the most attentive and committed to ferreting out flaws. Moreover, disgruntled customers are often the most opinionated and most motivated to warn others.
Take, for example, Charlene Blake, who raised a stink over Toyota engine oil sludge and started a Toyota car owners’ petition called “Toyota Owners Unite for Resolution.”
Although it’s unclear how many other Toyota owners have gotten behind her effort, Blake gained an almost ubiquitous presence across key auto forums and blogs, and she’s unusually detailed in her comments about Toyota product quality.
Is Blake typical? Probably not. Does she have disproportionate influence on the Internet? If Google search results are any indication, the answer is a big yes. Over 50,000 results show up for the search string “charlene Blake and Toyota.”
In a PlanetFeedback survey, nearly 84 percent of consumers said that product performance was most important to a company’s credibility. As we like to say, if the product fails, the consumer wails, and expresses pain to others. If the product soars, the consumer roars—loudly and proudly. That’s why creating a high-quality product that consumers can trust from the very beginning is so fundamentally important in nurturing and protecting credibility.

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