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Have you ever noticed how once you become interested in something, you tend to discover more things about it than ever before? Someone once explained this to me as ‘opening new windows in your mind’. When you ‘open a window’ by developing an interest in something new, you start to be aware of things you previously would have ignored. I’ve been experiencing this recently. Light has been shining through my newly opened windows onto topics I’ve started thinking about for my next book. One such topic is Brand Value and how high service can add value to a Brand. Just a few days ago I received a mailing from Financial Times Conferences. It was promoting a conference called ‘Reflecting Brand Value on the Balance Sheet’. It’s a conference for financial people and it is not focussed on my area of interest, which is the service element in Brands. But I think the existence of such a prestigious two-day event, on the subject of Brands adding value to a balance sheet does demonstrate how important a topic this is becoming. 

I also know that a great way to explore, expand and better understand your knowledge on a subject is to discuss and write about it.  So hopefully, this article will provide a bit of learning for us all. 

In order to structure my research into this subject I gave myself three key questions to find some answers to. This article is therefore based on the answers I’ve found to date and the conclusions I’ve reached.

There are a few organisations (generally only one or two in any market or sector) that have made themselves different and distinctive because of the service they provide. At the various seminars and conferences I do each year I regularly ask for examples of such organisations that readily come to delegates minds.  It’s interesting but I guess not surprising that the following businesses tend to be mentioned again and again. 

Each year Tony Mosely of Manchester Business School organises the Service Excellence study tour of America’s best service providers. He recently admitted to me that when choosing the high service organisations to visit in America he always has at the back of his mind a wish to stay in a Ritz Carlton hotel if possible. Most Ritz Carlton hotels are a franchise, so the local owner-managers each add their own style to the hotel. But Tony knows that the Ritz Carlton Brand means that the service will be exceptional and that his customers will therefore be delighted with his choice. 

In the UK grocery sector Tesco is the businesses that nowadays get the most mentions as a distinctively high service provider. I think that’s quite an achievement when you consider that not too many years ago they were famous for their founders motto, ‘stack it high and sell it cheap’. I shall be commenting on the affect this new ‘brand image’ is having on Tesco later in this article.

Disney is another great US example. In their theme parks they have an attention to detail and a style of service that is unique, and so forms a part of the added value of their Brand. 

Another interesting UK example is Virgin. The recent problems they have been experiencing with Virgin Trains is, I believe, as a result of the fact that Virgin have created a core service element that the British public attach to and expect from the Virgin Brand. So when the Virgin Brand appears on a train, yet the service we experience in the train is about the same as from BR, we complain. Letters of apology, vouchers offering discounts off future journeys and promises of ‘better service when we have our new trains’ do not appease us. We understandably and rightly expect a Virgin train to provide what we know or expected to be the service that goes with the Virgin Brand. 

This example not only demonstrates the power of a strong Brand, it also highlights the problems that can occur if the expectations or promises that goes with it are not met.

Nordstrom, America’s world famous clothing retailer, is another organisation that has developed a level and style of service that can only be experienced in a Nordstrom store. It is now therefore a key part of their overall Brand.

A final example must be Marks and Spencer. They only sell own-brand goods so their Brand and the values within it are critical to their success. The Marks and Spencer Brand has been built on their three core values of Quality, Value and Service. It’s a simple but obviously powerful formula that’s worked for decades. So if they were to do anything that seriously damaged their reputation in any of these areas, that could also damage the core value in their Brand. And that I guess would eventually also damage the overall value of the business.

These examples prove that service can be a core part of a Brand. But secondary questions to this must be -  

• How do you define a Brand,  and 
• Where does service fit in? 

Terry Leahy, Tesco’s Chief Executive says that a Brand is "Something that creates value to the customer”. I think that’s a great definition because it’s simple to understand. Another definition I like comes from the ex Chief Executive of First Direct Bank, Kevin Newman. What I particularly like about his definition is that it specifically answers my question about Brands and the place of service within them. Kevin suggests that a Brand has the following key components. 

I think this makes great sense. Customers will decide upon the Value of something by balancing the actual product (or service if that’s what you provide) with the price they have to pay for it. So the better the product or service and the lower the price they have to pay, then the higher the value to the customer. 

I guess the first, Value part of a Brand is pretty obvious to most people. But the second Values element is one that many seem to have overlooked. There are however some businesses, like First Direct Bank, that have worked as hard on the creation of this element as on the Values part. A good example of a UK business that has committed to a strong Values component in their Brand is Body Shop.

The Body Shop Brand is known world-wide. Its core elements are captured in the following quotation from Anita Roddick.

"We produce products that cleanse, polish and protect the skin and hair. How we produce them and how we market them is what is interesting about us. We are innovative in our formulations; we are passionate about environmental and social issues; we care about retailing. The image, goals and values of our Company are as important as our products.”

This statement clearly demonstrates how the Values elements have become a key part of the Body Shop Brand. In fact they are perhaps the only elements that no competitor has yet been able to copy. Boots have developed their ‘Naturals’ range. Other franchise operations have been launched to market similar products to Body Shop. But so far none of them have been able to create the ‘soul’ or Values that are a key part of the Body Shop offering.

An American example of service values becoming a core part of a business is Sewell Village Cadillac in Dallas, Texas. Carl Sewell has built one of the most successful car dealerships in the world by focussing his business and his staff on value-driven things. 

This is not to say that he doesn’t also get the other things right. He is fanatical about things being clean, tidy, efficient and right-first-time, every-time. But he also insists that his staff then demonstrate a commitment to the businesses core values of openness, honest, being fair to customers and ‘treating every customer as if they were a member of your own family’. 

These examples (and many more I haven’t room to provide), create no doubt in my mind that the answer to question 1 is YES. Service can become part of a Brand. This then leads to my second key question.

In order to answer this question I’ve been investigating organisations like the ones listed earlier to learn their views and search for evidence of how service has added value to their Brands. I therefore recently attended a lecture at Manchester Business School given by Terry Leahy, the Chief Executive of Tesco. He had been invited to talk about the key elements of Tesco’s success and it was interesting to note how much importance he put on the Tesco Brand and what it represented. He suggested that the most important value a Brand can have is "the trust of customers” and that the creation of such trust will definitely add value to any Brand. 

As an example of the value a Brand can add, he referred to Tesco’s take-over of William Low, a Scottish retail grocer. Just 2 years after the Tesco Brand had replaced the William Low Brand, the following had resulted.

• Sales were up by 40%.
• The average prices were around 6% lower.
• £35 million had been spent on store improvements.
• 100,000 more customers were being attracting per week.
• 60% more people were employed in the business.
• Pay had increased by 15% for the average employee.
• Double the business was being done with local suppliers.
• Profits had grown from £17 million to £51 million.

Terry explained how over the past few years the Tesco management team has been focussing every employee’s attention on customer service. Every decision and action in Tesco is first checked against the question "What’s in this for the customer?” If no worthwhile answer can be found, then the decision or action must be changed. 

He ended his presentation by telling us "When we stopped chasing Sainsburys and chased our customers instead, we beat Sainsburys.” I think there’s a strong lesson in that for many businesses. It’s all too easy to become so focussed on what our competitors are doing that we’re not focussed enough on what our customers want. 

Another example comes from when the Marriott hotel Brand replaced the Holiday Inn Brand at a number of hotels in the UK. The hotels were the same as before (apart from a bit of decoration), the locations were the same and most of the staff were the same. However, with the Marriott Brand went an international reputation for high service. These newly branded hotels were therefore able to charge a higher room rate and they now have a higher level of occupancy than before.

These examples clearly demonstrate that service can add value to a Brand. I therefore have one last question.

This is a more difficult one to answer. However I think a clue to the answer comes from these words used in my answer to question 1 –

I think that to make service a part of your Brand, the service your customers’ experience must be both different and distinctive. The following quotation from Jerry Garcia, one of the musicians in the band The Grateful Dead, puts it so well.

I think that’s it. You need to find a way to deliver a service that makes you the only one that does what you do. The way to go about creating such a distinctive service seems to be to focus on the following three things.

Level of service – You could create a level of service that surpasses all your competitors and so become known as the highest service provider in your market or sector. For example, hotel groups like Ritz Carlton, Mandarin Oriental or Savoy Group have reputations for providing service levels that are amongst the best in the world.

Style of service – You could create a style of service that is different from any competitors. For example, in the UK the style of service Virgin Atlantic provides is different to BA. In the same way, the style of service provided by South West Airlines in the US is different to any other airline in America.

Quantity of distinguishing elements – You could aim to have a greater quantity of service elements that are different to your competitors. For example, the hi-fi retailers Richer Sounds do dozens of things that that make them more interesting and fun and so different to a Comet or a Dixons. (And they keep adding to them through a brilliant staff suggestion scheme.). Similarly, there are many things that make up the experience of visiting a Disney theme park. Each one individually doesn’t make that much difference. But when they are combined, in the way that only Disney seem to know how, they create something unique. 

So I think the core elements are level, style and quantity. And for a really potent cocktail, you should find your own mix of all three. Aim to create a level, style, quantity and mix of distinguishing service elements that will make your service different from anything your competitors have. Such service mixes can be difficult to conceive and take time to create, but they generally provide something that is difficult to copy. Then, like most of the examples I’ve used in this article, you should have a Brand that provides added value and a source of competitive advantage that will sustain for many decades.

© Copyright Chris Daffy