Dear Colleagues:

In this issue of Marketing Coach Jeffrey F. Rayport of Marketspace, LLC shares case studies and observations about how B2B and B2C companies have reimagined their retail operations and other customer touch points to be customer-centric. His insights about Japanese financial institution Shinsei and Apple stores in America reveal successful strategies for reinventing the way we think about branding, customer relationships and retail.

Enjoy!
Ivy

 
 

Breaking Out of the Bank

 
 

Yes, this is an unfortunate pun about "out of the box" thinking. Marketspace's Jeffrey Rayport was brought in to create a customer experience strategy for Shinsei, a leading retail bank in Japan that was in the process of being reorganized and recapitalized. Their competitive analysis found that every branch of every retail bank in Tokyo looked the same without any brand differentiation other than on the door.

So, in 2007 Shinsei set out to build a brand in a category where no one had ever built one before. Based on the competitive landscape, they could have decided that the corporate identity (logo) would be enough, but determined that they needed to turn the company inside out and brought in a team of people with marketing and service sensibilities. The strategic direction chosen was to make Shinsei the most customer-centric bank in Japan and a chief marketing officer was hired from cosmetics brand Shisheido to lead the charge.

The new branding platform was expressed by the new Shinsei tag line "Color Your Life". A branded design for the bank's retail branch walls was created by an artist from Australia .

The Customer Experience
"If you are really customer-centric, you put the customer in front of the relationship," says Rayport. While a typical Japanese bank branch layout had 75% behind the counter and 25% in front of the customer, Shinsei reversed its layout using 20% for bank operations and 80% for customer service. For example, Shinsei worked with Yahoo Finance and created cafes within the Shinsei branches as just another way to make a customer's life more refreshing.

At the new Shinsei, every customer who set up an account at their branch got to pick a personalized branded ATM card design and have it produced while they waited. They had a choice from among 60 different artworks based on colors and imagery from the branch decor. Each ATM card represented the "Color of Your Life" brand promise.

The bank also customized the call center experience. They built five customer personas and created a website home page that enabled customers to select from images of these different Japanese consumer-types, which took you down different information and decision paths based on choices the customer persona was expected to make.

Since new university graduates were mobile device driven, Shinsei replicated this web approach to the iMode device, a smart-phone that was created by DoCoMo (a mobile spin-off of Japan's national telco, NTT) over a decade ago for the Japanese consumer. Consistent with the new Shinsei brand, the iMode device had hundreds of skins (i.e. fur, "Hello Kitty") and thousands of applications that made the device behave differently.

 
 

It is one thing to refresh a logo or a brand. If you ask which touch points within an entire system -- people, technology, and media -- have most leverage over the customer perception and interaction with the brand, it is often not the marketing mix but the face-to-face or screen-to-face interactions that have the greatest impact on customer-perceived value in a commercial relationship.

- Jeffrey Rayport , Marketspace   

 
     
 

Apple Stores: Branding at Retail

 
 

"Apple stores have the highest sales productivity in the U.S. retail marketplace. Apple created the retail chain about five years ago to capitalize on the excitement that the iPod, as well as the "ecosystem" the company was able to create with MP3 files," explains Rayport.

Apple had a deep understanding (with their ad agency TWA Chiat Day) that they needed to find ways to make the brand more experiential. They had recently repositioned the company from a PC device company to an entertainment, media and self-expression company. "The iPod is an elegant device, but it means little to the user (it's just a pretty paperweight) until you fill it up with content you create for yourself," said Rayport.

With the momentum Apple built with iPod, they realized they could get people a more up close and personal experience with their items at retail. While the SONY Style and Samsung Experience came earlier -- Apple stores were successful from the first prototype -- as marketing and selling machines.

The retail stores helped to build the brand with unparalleled customer service and experience features. The stores are famous for using wireless devices carried by store personnel to consummate a purchase (rather than hunting for a sales person or waiting on line) and e-mailing you a receipt in real-time (no waiting for it, based on your iTunes registration and address). They organize their sales operation around a plan to find a consumer when he/she has chosen their product and to make the sale happen quickly and easily.

The Genius Bar is a service counter where Apple digital media junkies work wearing black t-shirts. This new type of help desk is revolutionary. Rather than deal with problems like "I lost my hard drive" or basic "how to" help, they actually teach consumers how to be creative using their products.

Genius Bars had become so busy that they began scheduling Genius advice sessions for future dates. That created a new revenue generating opportunity, so Apple created a fee-based VIP service, ProCare, where for $100 a year customers can get on-demand service at the Genius Bar while others wait their turns. In the first 6 months of offering the service, over a million customers signed up. This added $100 million revenue to Apple's stores without much, if any, change in the cost structure of the stores.

If you can identify ways to create value in old-fashioned retail, you can still grow. "For perspective, an average big box retailer sells $500-800 per retail square foot. Tiffany & Company sells $2,800 per retail square foot, and word on the street is that Apple does about $6,600 per square foot per store," Rayport mused.

 
 

Going to the Consumer - Q&A with Jeffrey Rayport

Q: What differentiates a winning brand?

A: Many companies are no longer competing over what they sell, but on how they sell their products and services. This results in an imperative for marketers to bring their brand to the consumer rather than asking the consumer to come to the brand. It's about emotion, experience and touch.

Things that ultimately affect perception of brand and brand value are often shaped by touch points that are often not controlled by the CMO's organization or the marketing function generally. This applies to just about any major consumer-facing brand and many B2B brands, as well. During the sales process we may be aware of a brand because of traditional marcom, but in the reality there are many touch points consumers move through to make a purchase decision.

Most consumers will become aware of a brand, then turn to the web and go to the Google search bar to find a brand. Well-placed brands turn up on search engines, amazon.com, ratings sites, social networking sites, etc. Word-of-mouth through social media is a huge megaphone that you didn't used to have.

The ways that companies treat employees and involve them in brand building are very important. At Bank of America branches, they talk about employees the way that Disney does. Branch employees wear bright red jackets, name tags and a big smile. The employee appearance and interaction with the customer is defining how BofA differentiates its brand.

Q: Can you give an example of how technology can contribute to a branding platform?

A: It's about technology's role contributing to the customer's experience with the brand promise. If you buy a plane ticket, you can print your boarding pass at home, you go to the airport to scan your boarding pass, and if you are flying JetBlue, you have a high resolution screen on the back of the seat.

Companies with these operational practices are making the customer experience distinctive by overlaying a variety of interactive media touch points that make the brand more memorable, while reducing costs of marketing and service through automation by dint of digital technology.

Q: Are CMOs losing control over branding?

A: CMOs are having a tough time holding on to their control because the ultimate moment of truth between a customer and a brand may take place with the IVR (interactive voice response) or customer service representative, which report to other executives. If the customer touch point is in operations or the retail store, these functions report to a sales, operations or the customer care organization.

That means that CEOs need to raise the profile of the brand's interconnectedness with the rest of their organization and support the CMO's role to collaborate and create an end-to-end strategy and assessment of those high leverage areas that most influence the customer perception of the brand.

 
 
 
©2009 Ivy Cohen Corporate Communications, Inc.