In a frantic world where trust is hard to come by, brand promises matter.
They’re how people learn whether they can truly believe and trust in you and your company. If you follow through, you’ll have a loyal, happy customer base ready to spread the word to others about how great you are. But if you break your word, you’ll shatter trust and with it your reputation and ability to grow.
I’ve been an advocate of brand promises with guarantees since my time as MD at Rackspace and Peer 1. They were a big reason why we grew so quickly, scaling from zero revenue to £30 million in just five years. Committing to a series of promises that we knew mattered to our core customers was at the heart of offering an SLA with teeth. And the corresponding guarantees, or catalytic mechanisms, ensured customers knew our skin was in the game.
So what is it about brand promises that makes them so effective to growing companies? And how do you find the promises that will work for your business?
A strong brand helps people make faster decisions. It’s a shared heuristic. A rule of thumb that guides us and sticks in our memories. Humans naturally have these shortcuts – as we grow, we remember patterns of behaviour that lead to an outcome. As a result, brands fit into our evolutionary mind. A well-developed brand causes an emotional reaction that isn’t based on any logic. Take the Pepsi taste test as an example. In a blind tasting, more people prefer Pepsi but they continue to buy Coke.
Most businesses don’t have the advertising budget and brand power of Coca Cola. But they do have the ability to evoke positive emotional reactions in their customers. The aim of a brand promise is to create an experience that customers can expect to receive every time they interact with your company. The more you can deliver on it, the stronger the brand value in the minds of your customers.
The best brand promises link directly back to your core customer. So it’s pretty important you know who they are first! You need to position your business front and centre on the wants and needs of this group as well as on your economic engine.
Tesco is a good example – I followed one of their vans down a country lane recently and couldn’t escape their enormous brand promise emblazoned on the back of their van. ‘Freshness Guarantee – fruit as fresh as you’d pick yourself or your money back’. Sound pretty good! They know that fresh fruit differentiates and drives footfall in supermarkets. To attract core customers who currently shop with their competitors, they’ve come up with a strong brand promise. And they know through research that their fresh fruit offering is substantially different from the likes of Lidl and Aldi.
When I’m coaching clients through my core customer exercise, I suggest they create a persona or archetype. The aim is to work more deeply on the identity and motivations of this person. Last week, one of my clients, a managed services company, identified a core customer called ‘Rory’. What would Rory value? After discussion, we began to flesh out some possible brand promises.
Everyone in the room came up with an idea and we ended up with around 20. Some of them were guarantees around the superiority of their hosting relative to Atlassian Cloud. Some were performance differences. They knew that Rory could be using Atlassian tools on-line and might be frustrated by the speed it took to save something. This is something they could guarantee. From the 20, we whittled down to five of the best. The next stage is for each of the directors to take the five draft promises out to selected core customers to see which resonates the most. From there, we’ll get them down to the three strongest ones.
At Rackspace, our purpose was ‘Fanatical Support®’. As UK Managing Director, I knew the thing that would drive our economic engine more than anything else was churn. We had big ambitions. We wanted to disrupt IT service delivery in the UK but had limited resources. The only way we were going to succeed and grow as fast as we wanted was through word-of-mouth marketing.
So, we stunned our customers. They couldn’t believe the levels of service they were experiencing. Key to this was our brand promises with guarantees. These ensured that, if and when we failed to deliver, we paid up immediately and it really hurt. The first was ‘Zero downtime network’, the second, ‘Answer the phone in three rings or less’ and the final promise ‘Fix your hardware in under four hours’. If we failed to deliver it cost us money. This was our catalytic mechanism of guarantee for our clients – our skin was in the game.
Our competitors had SLAs but they were typically worded in ways that avoided paying out. But at Rackspace, our Account Managers would proactively ring customers to tell them they’d had a service failure. Often the client hadn’t even realised. This blew them away. Every time we gave them a credit, they ordered more stuff from us. In fact, we used to say that if we had a low sales month, we should have a service failure as this would drive revenue up!
The key to making this effective was creating no expectation that it would happen. Our Ts & Cs stated that customers would have to claim for any service failures. So, every time we called to offer a credit, it was a surprise, driving real and long-lasting positive energy. It created a “talk trigger”, a remarkable event that enabled word of mouth marketing.
Ruth in our finance team did some research that backed this up. If we gave a credit but didn’t ring and say sorry, it didn’t have much effect and the customer would churn. If we called them and held our hands up, it instantly built trust. Human interaction was vital to drive our NPS® and the retention of our customers. So we tracked this in our CRM, ensuring Account Managers called to offer credits and said sorry.
If we hadn’t followed through on our brand promises at Rackspace, we wouldn’t have been living our values. One of these was ‘Bad news first, no surprises’ – honesty and transparency were hugely important. For us, our values and brand promises were intrinsically linked – you couldn’t have one without the other. And that’s why they were so effective at helping us grow.
I remember one disastrous occasion where we managed to corrupt a high availability database that supported 19 clients. Corrupted beyond recovery was a staff satisfaction survey for a major high street bank. What made it worse is this wasn’t the first survey. They’d had to run it twice before due to earlier issues that weren’t down to us. Sod’s law eh? I had to go in and take a beating from the bank.
My approach to these conversations is always complete transparency. I told them exactly what had happened – no holds barred. And what we were doing internally to ensure it wouldn’t happen again. Most importantly, I told the guy how sorry I was that he’s been made to look an idiot. Finally, I offered him a cheque for £10K as compensation. It was waved away. He’d been so impressed with the way we’d handled the situation, he didn’t want to take the money. And he is still a Rackspace client to this very day.
Take this transparency all the way through your business. Once you’ve decided on brand promises, put in place what Jim Collins calls catalytic mechanisms that you can track. And tell your clients about these. At Rackspace, we tracked network uptime by customer in real-time and shared this with them. This is how you build trust.
Not only were my managed services clients thinking about their core customer last week. They were also searching for brand promises that they knew their competitors couldn’t deliver. Identify these and you’ve found your relegation six-pointer – your ‘secret sauce’ that has the power to disrupt your industry.
At Rackspace and Peer 1, we knew our competitors saw service as a cost and were in a denial of service mindset. They were working on the basis of customer satisfaction rather than delight. The industry average for revenue churn was 2% per month. So, their revenue level would decay by this amount month-on-month and gave them an effective customer lifetime of only 4 years. This wasn’t the case for us. We still had some revenue degradation but our existing customers started to spend more.
This gave us 1% growth month over month without winning any new customers. They had no idea that, once you’ve deployed brand promises and got NPS® up to a score in the 70s or 80s, you can turn service into a profit engine. In tight markets, an NPS advantage can account for 85% of customer migration from one supplier to another.
It’s pretty obvious that the brand promises you choose need to be something that you know you can deliver. At Peer 1 we wanted to strengthen their guarantees. Previously, we had committed to a four-hour hardware fix. I wanted to go for one hour. ‘Impossible’, I was told. ‘Totally inconceivable!’ So I asked to see the data to prove it. No surprises. We didn’t measure it. We just knew we were meeting our SLA 100% of the time as we had not paid out against the SLA.
I got them to track how long it took to fix hardware for a month. Turned out that 95% of fixes were done in under an hour. We changed the guarantee to one hour, saying we would offer a credit if we breached it. This drove better performance by forcing the organisation to measure and meet its new target. Otherwise, we were paying out and it hit our bottom line.
At Rackspace, I held weekly ‘Cut the Crap’ meetings, looking at the root cause of issues that had led to goodwill rather than SLA credits. The efficiency we gained from this was immense.
Effective brand promises can make a massive difference to staff accountability. I remember one of my challenges at Peer 1 particularly vividly as I was on the receiving end of major flak! There was a pretty awful IVR system in place when I arrived. And our average on-hold time was 2.5 minutes – way too high in my opinion. It took me six months to get rid of the IVR and a further three months for our shift managers to get the pick-up time down to our new brand promise of three rings (or 17 seconds). How did I do this? My go-to method for every situation. Daily huddles.
Every morning, we looked at call abandonment on the previous shift. I insisted that the shift manager call all of these customers to say sorry they’d had to hang up. Man, did they hate that! But, as a result, this was a pretty effective catalytic mechanism. It drove the target and changed the dynamics on the team. The ‘A Players’ pushed hard for improvements, the C Players left in disgust. It was brutal but it worked. We ended up with a team that was completely aligned around delivering great service. We grew revenues in managed hosting by 25% year over year for 2 years – without hiring a single additional person.
Brand promises are one of the most important building blocks for growth. Invest time now in finding ones that truly resonate with your core customer and you’re instantly differentiated from your competition. Search for something that your customers will remark upon – the very essence of your exceptional customer experience. Ideally, something your competitors can’t afford to copy. And the continuous cycle of performance and efficiency improvements generated by these promises will be huge.
Dominic has spent 14 years working in sales, marketing and business management within the IT sector. He has held executive positions at Peer 1 Hosting, IT Lab and Rackspace. At Peer 1 he built the UK business to £30m run rate in 5 years. He won many awards for creating a great place to work. At Rackspace Dominic built the UK company from four to 150 staff, and increased annual revenues from £595,000 to £25 million in just four years. Under his management, Rackspace was recognised as one of the most outstanding workplaces in Europe, and won several service awards for its Fanatical Support TM. Dominic has a BSc in Agricultural and Food Marketing from Newcastle and a MBA from Sheffield Business School. Dominic is also a regular public speaker on creating great places to work and achieving continuous client satisfaction and an assessor on the Sunday Times Customer Experience Awards.