I recently came across an interesting interview on BBC 6 Music. The interview was with Mark Mothersbaugh – founder of seventies new wave band Devo – promoting their new album ‘Something for Everybody’ and explaining the unique creation process the band developed to produce the album.
Breaking the traditional business model of the music industry, Devo appointed an ad agency to market their upcoming album with a simple brief to ‘appeal to as many people as possible.’ Together they began an unprecedented co-creational approach to making music. An interactive and proactive process where thousands of fans helped the band make almost every decision, from the vocal style and instrumentation, to the album colour and graphics.
Is this a glimpse into the possible future of the music industry from the band that pioneered the music video? Or merely an alternative approach from a group that has always prided itself on being different? I would imagine the majority of music lovers would take a punt on the latter.
However it was the band’s justification of their approach that provides some interesting learnings to a context far wider than the music industry.
1. Mothersbaugh frequently states his belief that fans should be able to participate in the experience of making music;
‘I can imagine a time in the very near future where fans can become incredibly alter-interactive with a band. In the audience of a concert, for example, you could end up being the person who plays the solo using the apps on your phone. Fans could become a bigger part of the whole experience of what it is to make and enjoy music.’
This will be a familiar concept for anyone who has read Joseph Pines book ‘The Experience Economy,’ which advocates that brands add real value by orchestrating memorable experiences for their consumers. Welcoming consumers into the creation process achieves this on two levels; firstly the nature of co-creation is participatory, providing an experience through the process itself, and secondly, this process culminates in a more desirable end experience for consumers.
2. The band also believes this process will allow them to bring ‘the best possible content to the world.’
Expectations are rising as the typically time poor consumer is spoilt for choice with increasingly personalised brand and product offerings. Getting it right first time is a must as consumer backlash can be explosive (Just ask Steve Jobs over at Apple). Listening to consumers is no longer optional, and the process of co-creation greatly increases the chance of hitting the right spot first time.
The future of the music industry or not, it would seem a seventies New Wave rock band can teach brands of today a thing or two. After all don’t most brands want to ‘appeal to as many people as possible?’
What does being a customer of the public sector mean? Part 3
On Monday, I looked at ‘lessons from brands’; some ideas which the public sector could use to innovate around its products, services and delivery. For Part 1 click here and for Part 2 click here.
We also had a think at Promise about things the public sector can do to tackle their biggest issues. Here they are!
1. The public sector must clarify what it’s ‘brand’ stands for and build relevant expectations. This is a mammoth task, however, an essential one. Customers have high expectations of, customer service for example, as a result of daily encounters with the private sector. The public sector must continue to improve its service but it also must set out the boundaries of its relationships with customers and build relevant expectations that it can match. Customers are used to adjusting their relationship to brands depending on the expectations the brands have set (what we expect from BA is quite different from what we expect from Ryan Air). The problem is that customers don’t really know what they can and cannot expect from the public sector, nobody has told them.
2. If the public sector wants to build a relationship with its customers, it needs to be realistic and pragmatic. It must define what ‘good value’ means in public services and what they are promising.
3. Making the case for tax is also crucial. One way the public sector could do this is to run campaign that paints a vivid picture of ‘UK without taxes’. This will illustrate powerfully to the public what their tax money really buys them! It must communicate effectively and persistently the ‘value for money’ of public services and illustrate the return on investment (ROI).
4. The public sector needs to build its brand from ‘inside out’: it needs to enrol and involve its staff in helping deliver public services effectively. The public sector has many resources at its disposal; the NHS itself is the third largest employer in the world (after the Chinese army and the Indian State Railways). Its people are its biggest asset and the public sector must leverage this advantage and harness the energy of its people.
“ENGLAND may once have been a nation of shopkeepers, but it is becoming a country of healthcare workers, with one in every twenty-three of the working population being employed by the NHS. Almost 1.3 million people — or the combined populations of Birmingham and Coventry — work for the NHS, which is one of the world’s biggest employers.” (Times Online)
5. Big successful businesses have learned over the years how to feel small and local. Public services should learn how to communicate their work on community level and not be seen as a big and faceless machine that has nothing to do with real world. M25 running smoothly will be taken for granted by citizens. But a new playground for kids (or anything else on a community level) if presented nicely will surprise and delight and make a real difference. This is something that would stick with people.
6. Public faith in the conception of the services it’s paying for is increasingly shaky. The old public consultation paradigm is threadbare to say the least. While new techniques such as contingent valuation and deliberative research have attempted to find ways of making consultation more ‘realistic’ and considered , there lies a fertile territory that begins with “co-”: co-production and co-creation through the active participation of users in the conception (and ultimately delivery) of public services.
7. Customers also need to understand the difference between central and local government, who provides what and how it all works together. The public sector needs to have a strategy for communicating its many brands. Does it want to be seen as one entity/joined up or appear separate? What are the boundaries between each?
Needless to say, none of these tasks are easy but ignoring them will not make them go away. They will require a concerted effort over a long period of time, but it will pay off, eventually!
What does being a customer of the public sector mean? Part 2
Last week, I talked about how trying to be and remain customer focused, was a challenge for the public sector. I also explored the differences between the relationship the customer has with the public sector versus the private sector (lack of choice, no competition, dependency, customer is not always right, reciprocity and equality). See previous blog post for more or to catch up!
In short, life can be complicated for government in trying to keep most people happy most of the time. Bearing in mind that they are serving 60 million very different consumers across many different services (private sector brands have nothing like these levels of complexity). Size is another key issue – it makes moving the super tanker without causing a tsunami very slow (as many recent press reports bear witness).
However, there are innovative things the public sector can do to reduce costs, but still remain customer focused.
Lessons from brands
Some brands have successfully reduced costs, while at the same time, provided a direct customer benefits. Examples of good practice include:
- Empower consumers: let consumers come up with solutions that help your brand and solve crucial issues that are relevant to them. This is more cost effective than new product development internally, followed by endless ‘testing’ with consumers. The success of Windows 7 is testament to this!
- Offer choices/personalization: Tesco, through the use of its club card has been able to collect valuable customer information and consequently personalize its offers and advertisements to relevant customers. This has been more cost effective than traditional consumer research and a better use of resources.
- Innovate: Innovate to save costs! Though long ago, McDonalds innovation around ‘fast food’ and ‘self service’, was a new business model that has helped save costs for the company and time for customers.
- Use technology smartly: replace human cost with technology. British Airways was the first to introduce online check in the airline industry. This helped BA save on human cost and customers were pleased to be more in control, as well as save the time spent in endless queues. Self check out at most super-markets helps achieve the same.
- Build engagement and dialogue: engaging consumers in a dialogue around cuts or the need to charge for items that were previously free is important. Marks & Spencer decided to charge customers for the use of plastic bags. They got buy in to do this due to its environmental benefits. This made customers think twice about using plastic bags and also made them feel good about their choice not to. The same has been true for banks allowing online transfers and the choice of paper less statements.
- Make it close/personal: first direct revolutionised banking. A bank with no branches but one that was available 24/7 with great personal service. This has made first direct the UK’s most recommended bank with the highest retention rate! In another sector, UPS allows customers to track their parcels online, making them feel in charge. Both these are great examples of making things close and personal for customers, while reducing costs!
- Segment and prioritize: be efficient with your resources. Customer segmentation allows efficient resourcing. Orange packages its ‘products’ by segments making it more streamlined and relevant to consumers.
- Use intrinsic levers to ‘nudge’ consumers: Another efficient way of reducing costs is tapping into consumers’ natural inclinations, especially by ‘nudging’ them to do something that is good for them. PruHealth’s ‘Vitality Programme’ is a good example of this. The Vitality Programme, is what makes PruHealth insurance different. PruHealth encourages people to lead a healthier life, by doing certain everyday things like walking, going to the gym, eating healthily or not smoking. Consumers can build up Vitality points and get rewards. This is especially relevant as the rewards and incentives are linked to their core product.
- Offer savings: help people save where it matters most. Example, Waitrose Essentials range. Waitrose reduced prices for staple items to help consumers cope with hard times in 2009.
All these instances provide good examples of cost cutting that also provides tangible consumer benefits!
We have also had a think about specific things the public sector needs to do, more on this later. Watch this space, a little while longer.
The public sector has increasingly been grappling with the question of how to make the public sector more customer focussed.
This is a tricky question, as the relationship between the public sector and its customers (everybody!) is quite different from the relationship most other brands have with their customers.
“Public-sector management is in flux, thanks to the increasingly rapid pace of social, political, and technical change. Economic crises, privatisation, budget cuts, the continuing evolution of e-government and increasing scrutiny from citizens mean that the public-sector organisations of the future will need to be more citizen-focused, more business-like and smarter in their use of technology.”
(The Economist, 2010)
“The Government is clear that if it is going to provide first class public services it needs to redesign the system around the user. The ‘user as customer’ theme is already familiar in government reforms.To deliver lasting results, organisations need to embed customer focus throughout the system. Implementation must start by understanding the needs, expectations and behaviours of the public and then by adjusting every aspect of the organisation to align with customer values. This includes the entire delivery chain from policy through to front-line services – including strategy, performance measures, information systems and support processes.
(Customer-focused-government: From policy to delivery, HMRC)
The public sector has made decent efforts in trying to build a relationship with its customers. This has involved big initiatives like Transformational Government and HMRC introducing online self assessment forms, to smaller ones like the NHS (or rather some surgeries) texting customers confirming appointments and sending reminders. These are just a few examples, among other examples of good practice.
But customer response has been mixed. Although the public sector wants to match the service levels of the best brands in the country, the reality of our relationship with the state makes this very difficult. This is especially true in the face of inevitable service cuts in the wake of reduced public spending.
What are the reasons for customer discontent?
Mostly it is because we find it hard to imagine ourselves as ‘customers’ of the public sector. There are a few reasons for this (which lies in the fundamental differences between the public and private sector):
- Lack of choice: we often do not have a ‘choice’ in the matter, and choice is a very important aspect of being a customer. We cannot choose to be customers of the tax department for example, or choose our healthcare provider (in the case of the NHS). Choice is limited or non-existent in many cases
- No competition in the market. The services provided by the public sector are often not provided by anyone else, this is frustrating for some of us, as we cannot choose another provider if we are unhappy.
- Dependency: some of us are dependent on the public sector, as in the case of those who receive Benefits, and the relationship here is quite different, that of giver and receiver, where the giver has more power but the receiver has ‘rights’.
- The customer is not always right: Public sector services, promises, delivery have boundaries and we (their customers) aren’t always right. There are checks and balances at every stage of the relationship. We have an ambivalent response to this. We demand that these checks and balances exist to stop ‘others’, ‘benefit thieves’ and ‘cheats’ in order to ensure public money is spent wisely, but on the other hand don’t want the law to come down hard on us.
- Reciprocity and equality: there is a perceived imbalance in reciprocity and equality. When we buy a product or service from the private sector, it has a clear price tag and we receive the agreed benefits, the relationship is reciprocal and equal. There are tangible benefits that we can feel/touch/see as a result of making the payment. With the public sector there is a sentiment that the relationship is not equal. It is common to find people complaining, ‘The taxes are so high and what do I get in return, nothing!’ Most of us feel services are unfairly distributed and down to ‘post-code lottery’. We feel we are putting in a lot more than we are getting back. The price tag is perceived to be too high and the product/service is not tangible/worth it and not seen as value for money.
“Citizens expect more information both on the services they consume and on the value for money they get for their tax bill. Expect much more information to be made available directly to citizens and much more hard-headed qualification and monitoring of public investment projects.”
(The Economist, 2010).
In my opinion, the return is quite high: healthcare, transport, social security, benefits, education, defence, law and order etc, to name just a few. However, on a day to day basis most of us forget this, as the price tag is too removed from the point of delivery. Where the return is apparent, i.e. benefits, it is also complex as some are seen as givers (people paying tax) and others takers (people on benefits). Giver and takers are not always mutually exclusive of course, a person claiming benefits may have paid taxes for years, but this is not apparent and less acknowledged. In short there is no perceived tangible reciprocity, equality or value for money in the public sector as there is in the private sector. Of course the fact that we are funding the products and services in the first place further exacerbates the issue.
Furthermore, the recession showed us that the private sector adapts to our needs and responds quickly. Last year, a glance at the TV/newspaper will made this apparent with the number of discounts/ offers/vouchers available to ‘help us’. The state also responded, less directly by modifying their service levels to us as customers; and more directly by tackling the banking crisis.
Rationally this makes sense, but the resulting public spending cuts mean, that on a personal level, we feel we are being punished for someone else’s bad behaviour – firstly because we are victims of the behaviour, and secondly because we have to accept reduced levels of service (as well as tax rises) to put it right.
“Citizens and businesses will become increasingly demanding over the next five years as consumers of public services. A large majority of survey respondents anticipates that they will expect greater personalisation, faster and more accurate service fulfilment and more proactive communication, without paying more or sacrificing quality enhancements. Organisations will respond with streamlined delivery channels, more training in citizen-facing skills and more cost-efficient processes.”
(The Economist, 2010)
So what can the public sector do to remain customer focused (especially through the spending cuts)? Next week I pick this up in ‘lessons from brands’ that the public sector could learn from.Watch this space!
Amazing local experience wherever you travel!
That’s what consumers around the world told us they wanted from travel, be it for business or pleasure. However all they seemed to get were points, air miles and free nights that they never got around to redeeming.
However, today something unique has (finally) happened in the travel industry, a new loyalty programme GHA Discovery has been launched by Global Hotel Alliance, which rewards customers by giving them unique local experiences across its 12 brands with 300 hotels in 48 countries.
How did Global Hotel Alliance get this right? They co-created with consumers to build something that they really valued. Most importantly, they listened to what consumers said, rather than developing a ‘me too’ loyalty programme which seemed to follow the big chain hotel formula. It is easy to fall into the trap of repeating what seems to have worked for other brands, but it takes courage to challenge the norm.
Though this is uncharted territory, I feel confident (hope!) that it will be a success. OK, I admit that we at Promise helped develop this loyalty programme by engaging consumers offline and staff online; but I also believe in it because it has been true to its end users needs. Moreover, each local experience has been created (crafted even), by staff in each GHA member hotel. This level of commitment cannot go unrewarded!
To quote Lord Tennyson: The old order changeth, yielding place to new, and God fulfils himself in many ways, lest one good custom should corrupt the world.
I for one, do hope that with GHA Discovery, the old order of excessive points giving and collecting will begin to end, so that someday Jason Reitman can make a very different movie from ‘Up in the Air’, starring a contented rather than a jaded business traveller. Well actually, maybe that won’t make good TV?
We are just starting to dig deeper into this year’s Promise Index data, but already there are some amazing findings.
The two simple questions that people answered on image and experience, summarises the year brilliantly. Promise Index is our proprietary tool to track which brands keep their promises to consumers. It is now the 7th year running that we have asked the UK population their opinions on 160 leading brands. Image and experience scores allow us to produce Promise Index (the average of a brand’s image and experience scores) and Promise Gap (the difference between image and experience).
Retail should be an interesting story this year with value brands performing really strongly, John Lewis for example shot up 21 places to occupy a well deserved space in top 20 and Boots is another British success story of the Promise Index 2010.
Understandably, airlines seemed to have had a bad year, as did the automotive industry.
Anyway, more details to come. We are currently looking at different sectors to see how the year went for different brands in the context of similar companies. Marketing Week will be publishing an article on the index next week.
Watch this space!
It must have been a tough day at the office for BP Chief Executive Tony Hayward yesterday as he faced the wrath of the US senate. Hardly surprising, given the disaster that has unfolded off the Gulf of Mexico.
However, what is interesting about the whole sorry affair is the reaction of President Obama. Despite being heavily criticised in the US for his handling of the oil spill, he has managed one very clever move. He has identified that the disaster has provided the perfect opportunity to re-position his climate change bill, which is one of the biggest priorities for the Obama administration. The bill has been stuck in the senate for months, with other legislation taking priority. The disaster has enabled him to re-position the bill as a matter of urgency, and provided the perfect platform for Obama to rally support for climate change reform. As part of rallying support, the disaster has allowed him to claim that by stalling reform, US national security is under threat. Another clever line given the paranoid American mindset.
Like any good brand being able to re-position yourself in reaction to a disaster, whether a result of something in or out of you control, can be extremely advantageous. Take Gap. In the face of the sweat shop scandal the brand has been able to re-position itself as a more ethical organisation; distancing itself from the sweat, so to speak.
With Obama, this obviously doesn’t take in to account the moral question of capitalising on human loss, but in this case if it means America can move towards being a cleaner nation, perhaps the saying every cloud has a silver lining is right. Right?
