Consumers Give Second Chances to Poor Service Providers

Most consumers are forgiving and tolerant of a single poor customer service experience, according to findings of the American Express Global Customer Service Barometer.

According to the results of this 12-country study of more than 12,000 consumers, between 50% and 75% of consumers will put up with two or more poor customer service experiences before discontinuing business with a company. This ranges from a low of 49% in France to a remarkably high 77% in India.

Of course, those of us who have visited India are well aware of the infrastructure problems that often lead to bad customer service situations, so perhaps it is not so surprising that Indian consumers are more understanding and forgiving.

There is no doubt that consumers stop purchasing from companies that give them poor customer service. As we noted in yesterday’s blog post, up to 87% of consumers have vowed never to do business again with specific companies due to poor customer service experiences.

Over one-third of consumers in France (38%), Germany (33%), and the UK (33%) are unwilling to forgive even a single episode of poor customer service and are more prone to quit doing business with an organization after just one bad experience.

On the other hand, consumers in India (38%), Mexico (28%), Spain (24%) and Italy (22%) are more inclined to give companies three or more tries.

Significantly, 70% of consumers in this study claimed they will allow an organization a second chance after a poor customer service experience if they have generally had a history of good customer service from that company.

Consumers in Mexico (89%), Canada (88%), the U.S., Australia, and India (86% each) are significantly more likely to include prior service experiences in deciding whether to keep or drop their relationships with selling organizations.

This study confirms what we often tell our clients and workshop participants — creating a series of positive customer experiences is one of the best ways to ensure customer retention.

Read our most recent Monday Morning Marketing Memos for more thoughts on Customer Retention Marketing, or what I call the art of keeping good customers.

Up to 87% of consumers will leave due to poor service

Over eight of every ten consumers in six major markets have vowed never to do business with specific companies due to a poor customer service experience.

Consumers in Mexico, Australia, and Canada are the most likely to walk away and find other service providers when receiving poor or bad service, followed closely by consumers in Spain, the United States and the United Kingdom.

These findings come from the American Express Global Customer Service Barometer, a 12 country study of attitudes and preferences toward customer service released earlier this month.

At a minimum, across all 12 markets, six in ten consumers report they have decided never to do business with a company as a result of a poor customer service experience. The specific findings were:

Mexico — 87%

Australia — 86%

Canada — 85%

Spain — 82%

United States — 81%

United Kingdom — 80%

Germany — 77%

India — 77%

France — 76%

Italy — 73%

Netherlands — 62%

Japan — 61%

This research study was conducted with over 1000 adults 18+ in each of the 12 countries between mid April and early May this year.

BP’s Latest Brand Disaster: Doctored Pictures

News Corporation is reporting what environmentalists and others have long suspected — that BP has been “playing fast and loose with the truth.”

In a story on Friday on their Australian web site, Newscorp reports that BP has been caught doctoring photos of its response to the worst oil spill in U.S. history.

The story actually originated with the publishing of two altered photos taken from the BP web site by tech web site Gizmodo.

For other examples of BP’s PR approach to this disaster, see our previous post BP: Brand Perfidious.

I suspect that the expected resignation this week of BP CEO Tony Hayward is unlikely to halt the current freefall in the BP corporate brand image.

Let me know if you agree or disagree.

BP: Brand Perfidious?

Perfidious – deliberately faithless, treacherous, deceitful. Of, relating to, or marked by perfidy. Synonyms: false, disloyal, unfaithful, traitorous, faithless.

Perfidious is the word that leaped to my mind when I read this opening paragraph in a post on the Fast Company web site:

“There’s no question that BP has lied extensively over the past few months about the growing Gulf oil disaster. The company has bullied journalists, fudged numbers, and even deployed fake journalists to the Gulf to write about how everything is fine. Now BP may be literally trying to cover up oiled beaches by dumping sand on top of them.”

Over the weekend, the Financial Times (FT) and CNN were reporting that BP is bracing for a shake-up at the top, with both the Chairman and the CEO expected to be replaced within weeks.

However, unbelievably, the CNN story reports that the Chairman is being “singled out for criticism by shareholders for his perceived lack of decisive leadership during the crisis and his failure to support Tony Hayward, the embattled chief executive.”

I guess these shareholders have their heads stuck in the same sand that BP apparently is using to cover up the oil-stained beaches in Louisiana.

Mr. Hayward’s performance before the U.S. Congress, in which he tried to handball blame for this disaster to BP’s subcontractors, did nothing to enhance trust in the BP brand or its leadership. Neither did early reports that soon after this disaster BP was offering US$5000 payments to residents affected by the oil spill if they waived their rights to sue for any damages.

The high-powered institutional investors in the UK that own the majority of the BP shares apparently do not have a clue about Corporate Image Management and the impact of the corporate image on share prices.

Both these investors and the BP Board need to understand this finding from the PriceWaterhouseCoopers report Reputation Assurance: The Value of a Good Name:

A single-minded focus that seeks only to satisfy shareholders may ultimately lead to crises and erosion of shareholder value.

Looks like an updated definition of the word perfidious might need to include “can lead to crises and erosion of shareholder value.”

Green Collar Economy to Feature at Singapore’s National Sustainability Conference

The Green Collar Economy and Environmental Up-Skilling are the two themes for the inaugural Singapore National Sustainability Conference on July 29-30.

The two-day conference is jointly organized by the Office of Environmental Sustainability at the National University of Singapore and the Workplace Research Centre at the University of Sydney.

All registered delegates will receive a complimentary copy of Ken Hickson’s iconic book The ABC of Carbon.  Hickson is one of the keynote speakers at the conference and has become a leading consultant on climate change and sustainability in the workplace.

Details on the program and registration are found on the National Sustainability Conference web site.

Li Ning: Make the Change

Chinese sports brand Li Ning has unveiled a new logo and slogan as it continues to pursue its global expansion aspirations.

The new slogan Make the Change replaces the previous Anything Is Possible, though the latter phrase is being kept in storage by the company for potential tactical use in the future.

According to the company, the new logo ”displays a modern interpretation of the iconic attributes of the original logo in a modern design language that spells out a global perspective.”

New Li Ning logo

The company has long been criticized for having a logo with too much resemblance to the Nike Swoosh and for a slogan too similar to the Adidas tagline “Impossible Is Nothing.”

Well known in its home market of China for its strong distribution system and competitively priced products, Li Ning has started expanding into numerous overseas markets in Southeast Asia and the USA. It has also begun sponsorship of a handful of western athletes, including a couple of NBA basketball players and European track and field and tennis stars.

The company was founded 20 years ago by Olympian athlete Li Ning, who became an immediate Chinese sporting hero when he captured three Gold Medals in the 1984 Los Angeles Olympic Games.

As we wrote in this blog back in November (see Li Ning: First Chinese Global Brand? under the categories Branding and Marketing), Li Ning wants to build the first truly global brand to emanate from China.

With this new logo and slogan, he may very well be on track to accomplishing this dream.

Is Shell Trying to Fill the “Beyond Petroleum” Void?

Deja Vu?

Into the “Beyond Petroleum” branding void steps Shell Oil.

This multi-national major oil industry player now has an aggressive new ad campaign, in which Shell is claiming to “unlock” a future world powered by new and numerous energy sources and cleaner fossil fuels.

Now where have we heard that one before?

The campaign, which launched just about a month ago, includes television commercials, print ads, online advertising, outdoor executions and two web sites — www.energygalaxy.com and www.shell.us/letsgo.

In the campaign, Shell informs us that the wolrd will soon be on the road to sustainable mobility and that the good guys and gals at Shell are “ready to help tackle the challenges of the new energy future.”

Not one to kick a fellow petroleum dog when it’s down, Shell’s spokesperson told Advertising Age that the campaign had been in the pipeline for almost a year and that the company felt releasing it now was “the right thing to do.”

BP’s Brand Hyprocrisy

The Beyond Petroleum positioning of BP may have been little more than hundreds of millions of dollars spent in greenwashing.

According to The Power Grid column in yesterday’s New York magazine, BP’s investment in hydrogen, wind, solar, and biofuels amounts to just 6 percent of its overall capital expenditures.

While this is certainly a significant amount in terms of dollars (or pounds) spent, it pales in comparison to what BP spends annually on oil exploration and production.

And this does not include, writes John Heilemann, “the tens of millions of dollars that BP has spent on lobbying against safety regulations, even as it’s compiled the most abysmal safety record of any major oil company.”

One key point in the article: safety violations by BP over the past five years totaled 760, as compared to only one for Exxon Mobil.

As we wrote yesterday, media monitoring firm General sentiment calculates that BP has lost $1 billion in brand value since the Gulf Oil spill.

It’s not the fact that BP had an accident that makes this brand suspect; it’s the manner in which they have tried to pass off blame and responsibility that bothers most.

Add to the above the 700,000 “friends” who have signed on to one of the three Boycott BP pages on Facebook, and you have a brand that is approaching free fall.

Sadly, the BP Board doesn’t seem to get this yet. By the time they do, it will be too late. (Another reason why Marketing needs to be brought into Corporate Boardrooms.)

The tombstone for the BP brand is being readied, and the graveyard of Enron, WorldCom, HIH Insurance, and myriad others awaits.

BP Drops $1 Billion in Brand Value

Media firm General Sentiment estimates that BP has dropped close to $1 billion in brand value.

That’s roughly four times the impact on the Toyota brand earlier this year, according to the firm.

General Sentiment uses sophisticated software to scour and analyze over 30 million sources of content on the Internet, including from news, social media, blogs, and web sites.

According to an article today in MediaPost’s Marketing Daily, General Sentiment’s CEO Greg Artzt is pessimistic about the impact of this drop in BP’s brand value. “It will cost BP a fortune to dig itself out of the hole it is in just on the media side,” he says, adding “At the retail level, it will affect them. They are clearly worried about their brand. They do a lot of advertising. But look at their market cap, they won’t recover.”

Based on the comments about BP at the brand social networking site Brandkarma, I would have to agree with Artzt. Comments about BP are generally not favorable and the BP brand ranks poor to bad on all five criteria (planet, customers, employees, suppliers, and investors).

Additionally, the three Boycott BP pages on Facebook have accumulated over 700,000 “friends.”

The General Sentiment one-page report on the effect the Gulf Oil spill is having on the BP brand value is available on their web site. However, it wasn’t working this morning when I tried to download it.

Brandkarma — the social network on brands

How do your views of brands stack up with those of others?

Now you can find out — through the Brandkarma web site.

Started by the chief creative officer of one of Australia’s largest ad agencies, Brandkarma is a social media platform “on a mission to help everyone make better brand choices and to influence brand behavior for good.”

The site was founded on two important truths:

1) that in today’s world, brands that span national, social and cultural divides can be a greater force for good than governments, and

2) that we all, as consumers with opinions, have much greater power to influence brand managers and their actions than possibly we currently imagine.

Brandkarma was started to help answer two basic (and important) questions:

1) what kind of world do you want to live in?

2) what kind of a world do you want to leave your kids?

Through this site, all ordinary consumers have a chance to make a difference, assuming Brandkarma grows strong enough to get brand managements to listen.

On the Brandkarma web site, you can comment and score hundreds of brands for any of five criteria: planet, customers, employees, suppliers, or investors.

As Alan Webber, founding editor of Fast Company magazine says in his testimonial on the site, “Let’s all come together around Brandkarma and use it as a platform to help businesses / brands become a force for positive change in the world!”

Enter your own evaluations of brands and join the brand conversations at Brandkarma network today, and let us know what you think. Will this network grow powerful enough to influence the future actions of brands?