BRAND RELATIONSHIP EQUITY
THROUGH OPTIMAL USER EXPERIENCE

by: Cheryl Harris, Ph.D.

copyright Cheryl Harris 2001. All rights reserved.

"The customer is the foundation of a business and keeps it in existence. Because it is its purpose to create a customer, any business enterprise has two - and only these two - basic functions: Marketing and innovation." Peter Drucker, The Practice of Management.

The research- and customer-centric approach recommended in this brief is designed to facilitate the relationship that will be built, and hopefully, maintained, with customers over time. A website should be seen as a vehicle for converting customers to "brand evangelists", the most effective form of marketing. A "Brand Evangelist" or "Brand Fan" is one that has a consistent and overwhelmingly positive experience each time he interacts with the brand/company/website, and is highly motivated to share his positive experience with others. This is clearly the most powerful form of marketing and one that the internet is uniquely positioned to facilitate. Yet few companies know how to build an online brand that is oriented toward creating and replicating Brand Fans:

"Instead of thinking of products as fixed items with set features and a one-time sales value, companies now think of them as 'platforms' for all sorts of upgrades and value-added services… The idea is to use the platform as a beachhead, as a way of establishing a physical presence in the customer's home or place of business. That presence allows the vendor to begin an ongoing relationship with the customer." Jeremy Rifkin (Wharton School Executive Education Program), The Industry Standard, 3/2/00, p. 205.

There is increasing evidence in the era of intense pressure for internet companies to show quick profits and high customer conversion rates, that attention to Relationship Equity values result in a greatly increased Lifetime Value (LTV) of a customer. Young & Rubicam's well-known "Brand Asset Valuator" study, first released in 1998, studied the brand assets of both successful/emerging/momentum brands and brands that appeared to be failing or declining. Y&R discovered that four factors made the greatest independent contributions to brand (and hence, sales) success.

These brand success factors were, ranked in order of their importance:

  1. Differentiation
  2. Relevance
  3. Esteem
  4. Knowledge

Y&R was careful to point out that the success factors they revealed in their analysis of profitable and "momentum" companies stand in direct opposition to the success factors assumed to underpin effective marketing in the past. In the current marketplace, buyers have much less time to seek out products at the same moment as many more products are available and competing for the purchaser's dollar. Buyers use the purchase decision moment, and the sales cycle in general, to achieve personal distinction or "identity difference". They look first at the brand for its uniqueness or "specialness" and must be assured that it is highly differentiated before they begin to evaluate its personal relevance to them. This is indeed a big difference in buying behavior from the past.

Esteem for the brand is built from experience with it, but will never be accomplished without satisfying the customer's differentiation and personal relevance goals first. Only lastly is product knowledge (what used to be called "brand awareness") a factor in brand success. According to this study, regarded by many as groundbreaking, merely knowing about the brand is far from assuring its success. Eventually, a mature "leadership" brand achieves high rankings on each of the success factors, but the hierarchy of importance described above, if reversed, signals a declining or failing brand.

How would we apply this model and create measurable success factors that can be used to track its brand development as the online venture matures? First, many sites have built their business plans upon the assumption that each holds a highly differentiated brand. However, true brand penetration, in terms of traditional awareness/exposure measures, is probably quite low and in any case significantly less than the market that the brand now wishes to address by going online. There appears to be no objective measure demonstrating that the brand is perceived as highly differentiated even within its circle of brand-aware readers. Of course, this assumption and many others could be tested with a properly administered market research program. Bottom line: all website strategists must think carefully about how it will clearly communicate its brand uniqueness and not assume that its identity attributes are already known or understood.

The second most important success factor, Relevance, can be manipulated partly by rigorously controlling the quality of the user experience once a potential customer initiates an interaction with the brand and also by careful market messaging that targets by segment or user type. This targeting must be precise, and must present an argument for personal relevance of the brand/products for the individual user in terms that are "natural" to the user. Again, the degree of certainty and the mitigation of risk of this marketing approach is greatly increased by appropriate research that confirms the user segments and each segment's personal relevance criteria. We must understand how each user type evaluates a brand/product in the target category, verify each criteria and process used, refine these into messages, and test the communicative effectiveness of these messages. Furthermore, as previously stated, we need much more information concerning the channels (and their perceived credibility/relevance) which each user type looks to as a source for brand/product information within the target category. This research must be quite specific in order to be effective. Esteem will be built by managing customer interactions with a high standard of excellence - we'll shortly discuss some tactics for establishing relationships effectively.

Widespread brand knowledge could be argued to be an artifact of proper management and growth of the other three success factors. To establish widespread brand knowledge by itself requires huge marketing spending and is almost always a mistake in and of itself. One has only to look back at the dot-com advertising spending excesses of the past few years, and the correspondingly low return-on-investment (ROI) to see ample evidence of the futility of building simple brand awareness without delivering on these other three success factors. The Y&R model, which advocates brand building on the other three levels first, does in this light appear to be the more fiscally sound.

Another model for capturing and holding customer attention is suggested by research conducted over a 10-year period by the author. In this view, complementary to the Y&R perspective on brand-building, customers learn to bond with a company within an interaction continuum. The process is quite similar to the journey which a "fan" undertakes as he/she establishes an initial "connection" with an object or subject of interest (be it rock star, movie star, athlete or sports team….) and gradually moves the interest forward across a spectrum of activities and actions. Applying the model to the branding and customer relationship process provides a means of moving the customer through this bonding process and managing satisfaction with the relationship at each phase.

Discussion of Specific Initiatives in Building the Brand

TRIAL --->IDENTIFICATION ----> RELATIONSHIP ----> COMMUNITY

Assuming that a brand takes steps to better and more comprehensively identify and understand its user types, and is able to create and align its marketing messaging with this knowledge (and of course, deploy it effectively) it will have the opportunity to stimulate product trial and thereafter develop longterm and profitable relationships with these new customers.

The simple continuum illustrated above is an illustration of the major relationship-building (and therefore, Brand Building) touchpoints which the website user experience is in a position to stimulate and enhance.

Incentives to Brand/ProductTrial

Incentives to trial (in this case, indicators of trial are visits to the site…) will be primarily driven by choosing the proper messaging channels and targeting appropriate messages to potential customers within those channels. However, customer trial can be further motivated by making it clear that …

  • All product/service features are generated from in-depth market knowledge and feedback from users like me
  • All site visitors, even first-timers, have an opportunity to contribute feedback
  • The site is 100% error-free and clearly built with an ease-of-use goal in mind from the ground up
  • The site's homepage reinforces the individual user's "personal relevance" evaluation by reiterating what is there for the user, in terms the user will understand and with which she will be identify
  • The site offers personalization/customization options even to a first-time visitor, and clearly explains the benefits.
  • This process should be quick, painless, and error-free. Once a user invests the time to establish a custom experience with the site, the likelihood of repeat visits more than quadruples. Once the initial trial barrier has been overcome, the site must maximize the potential for a return visit.

As mentioned above, personalization/customization options are utilized by relatively few website visitors, but once a visitor is pushed to participate in building a custom experience for herself using the site's tools, and assuming that the process meets the criteria described above for ease of use, the likelihood of returning and therefore repeat usage and further movement along the sales cycles accelerates.

Identification Successful Brand/Product trial should lead the user to a positive evaluation of the initial experience - and the challenge then is to provide a context in which the user can begin to personally identify with the site and brand. This can happen (and be encouraged) on many levels - ideally, the user finds content and experiences that meet or exceed her personal relevance criteria, that are immediately useful and speak to an immediate perceived need. Personalization and customization options, reinforced by proactive content (such as an emailed newsletter or alert program) can go a long way toward solidifying the user's sense of personal identification with the brand.

This acceptance stage should move the user toward the next stage of involvement, which is: Relationship.

In this stage, the user attempts to build a relationship with the brand, either through regular usage/visitation or through a transaction such as a purchase. For most brands, this is a fragile encounter because the potential for small errors to destroy the relationship is high. Poor customer service is probably the most efficient killer of relationship potential at this stage, and this is often cited as the prevailing reason many e-commerce companies fail. It is rare that a customer, particularly in an online environment where it is quite easy for competitors to offer trial and identification opportunities, will attempt another transaction after having been disappointed in an initial transaction trial. Yet if the service arena is planned and managed carefully, the brand can cement a relationship and assure a higher Lifetime Value (LTV) for that customer during the few moments it takes to complete a positive transactional experience through its online systems.

The company must clearly work hard to make the customer experience optimal from beginning to endpoint, and this is decidedly a challenge for a small company stretched thin by many other activities. The ways in which a company can excel in customer experience include:

  • Insuring that the website exemplifies the highest standards of usability and user experience throughout, and has truly been conceived and built with customer-centric values and knowledge
  • The site deploys multiple levels of customer support, multiple methods, and escalates problems appropriately and immediately
  • Insuring that the site uses all appropriate devices to reassure and protect the customer throughout the sales cycle and in each individual transaction
  • The company establishes a regular customer satisfaction research program and routinely tracks customer satisfaction in a variety of ways, including follow-up immediately after a transaction (even if the transaction is incomplete)
  • Transactions are "guided" - clear step-based or one-step action is used, and the customer has the sense of being aided during the entire transaction as well as having help available after, if needed
  • Setting customer satisfaction objectives and making certain that these are clearly understood throughout the organization; employees must be incentivized based on customer satisfaction results.
  • Customer feedback, on an ongoing basis, is available to everyone in the company. · Everyone in the company feels that they are in touch with the customer and have impact on customer satisfaction, whether they are directly involved with customers or not.
  • Customer satisfaction ratings are consistently favorable in all the key areas: service quality, product quality, product selection, pricing, and convenience.
  • Customers clearly see how to give feedback and are presented with opportunity · The site protects the customer's privacy and security at the highest level of implementation and uses best tools/safeguards to maintain privacy/security. Plus, the site makes sure it gets the word out about its efforts in this area.
  • The company uses customer feedback and all related data to make improvements on a continual basis. It doesn't just collect data - it actively seeks to interpret and apply learning based on what customers say they need and want. The company takes steps to insure the quality of feedback they are getting as well, such as hiring research professionals to design customer feedback/satisfaction tracking programs, so that the data they collect is as valid and reliable as possible.

·Very important is a clear plan for what happens when things have gone wrong. The company must establish clear policies of problem escalation that are understood throughout the organization, virtually all employees must have power to take steps to escalate and solve customer problems, customers must be shielded from difficulties in resolving problems, and employees should be rewarded for creatively solving customer problems.

Again, there is a real challenge in providing this level of customer service within the small organization. Some companies have successfully outsourced certain aspects of customer service (organizations such as www.ivus.com exist to "timeshare" customer service support) but this can be problematic as it creates a division in responsibility and it is difficult to integrate the outsourcer's efforts and policies with those of the brand.

Whatever the service structure which it finds viable, it must set the priorities of its customer relationship management and defend them vigorously and without interruption.

Although online usership is mainstreaming, users and particularly business users as currently conceptualized are upscale and affluent, almost without exception, and will have very high expectations of service. This is the one area which - if improperly managed - could easily destroy both the brand and its growth potential. This danger cannot be underestimated.

Community

Assuming that the customer's transaction experience is favorable, the company has the chance to build loyalty - repeat transaction opportunities. This of course has a positive influence on sales growth, but perhaps more importantly for the bottom line is the subsequent opportunity to stimulate the customer to become a Brand Fan. Brand Fans promote the brand on their own and with evangelical fervor. They seek out increasingly higher forms of identification and relationship with the brand, and with other brand users. They become interested in and utilize community forums associated with the brand. The positive- and powerful- word of mouth that Brand Fans create is very often the "secret ingredient" that propels companies into hyper-growth, what Y&R called "Momentum Brands".

At this stage, called in the example continuum the "Community" stage, the customer is looking for opportunities to increase their commitment to the brand, and the company should have planned to provide appropriate venues for this. Steps that the company can take include:

  • Providing relevant community or communities within the site that are precisely targeted toward the types of customers, their needs/desires, and which allow them to create relationships with other emerging brand fans. An example of this are forums or other environments where synchronous or asynchronous communication can occur. These could be carefully seeded, themed, and tools such as collaborative filtering could also be used to assign customers to certain communities and enhance their experiences.
  • Providing increasingly personalized experiences, such as advanced personalization options or premium tiers of service based on known characteristics of individual customers.
  • Creating opportunities for the customer to develop a "curated consumption of the brand" - "fans" seek out opportunities to display their brand identification through such channels as acquiring or buying and using branded merchandise (t-shirts with the company logo, tote bags, notebooks, etc.), patronizing sponsored company events, identifying with brand-related personalities, and collecting memorabilia. This element of customer relationship management sounds simplistic, but it is powerful and should not be underestimated as a tool. The key is to offer the "curated consumption" opportunity at the right time and to the right customer. Very influential brand evangelists can be developed with this strategy.
  • The company should provide incentives for customers to engage in forms of "viral marketing." The online brokerage industry, for example, has found its customer referral programs ("customer get a customer") to be very effective, given the proper incentives, which can usually be offset as a reduction of fee (discounts on purchases) or upgrade to a premium tier of service. The company should take steps to create and nurture an ongoing relationship by deploying multiple forms of contact outside the website: for example, emailed newsletters, invitation-only events, gifts for reaching milestones, Direct Mail contact, opt-in promotions, and passing on special benefits as a result of partnerships, etc.

It is interesting that the recent "internet bust" has presented opportunities for "old line brick and mortar companies" to make inroads in the online world. These companies have traditionally and heavily leveraged market research as a way of reducing risk and leading research & development decisions. Their strategies as they move into online environments will include research programs aimed at precisely matching customer needs with online products and experiences. They are unlikely to design from a visceral, arrogant "they'll like whatever we give them" standpoint (as so many internet companies, to their detriment, have done) and will also carefully track the effectiveness of all design, feature, and functionality elements as they relate to sales, profitability, and growth targets.

About the Author

Cheryl Harris, Ph.D., is an experienced e-business executive and entrepreneur, as well as a respected educator. A former professor at California State University and Parsons School of Design, New York, a published author and frequent international public speaker, she is well-known as one of the leaders in user experience and usability research. In 1996 she founded Northstar Interactive, an online research and consulting firm, and led the firm to its successful acquisition in February, 2000. Northstar developed web-based software and usability tools and consulted on strategy + design issues for such clients as Procter & Gamble, Motorola, Sprint, IBM, Netscape, Sony, AT&T, Time Warner, Roadrunner, Ogilvy & Mather, Grey, Modemmedia, Monsterboard, Mastercard, Citibank, eBay, Office.com, Insweb, Ziff Davis, Conde Nast, NBC, HBO, Discovery, and CNBC. She was also SVP, Interactive Strategy at Datek Online where her redesign of the online brokerage's site resulted in a doubling of customer accounts in less than four months. The new site was recognized or received top awards from Money magazine, TheStreet.com, Gomez Advisors, PC Computing, Red Herring, and several others. She is on the boards of several institutions, including the Lower Manhattan Cultural Council, the University of Massachussets IT initiative, WNET reelnewyork, and is a juror for several digital media festivals. Her publications include three books: An Internet Education (International Thomson Press, 1996) Theorizing Fandom (Hampton Press, 1998) as well as numerous articles. She received her Ph.D. from the University of Massachusetts-Amherst in 1992.