Category archive: Marketing

Tuesday, March 07, 2006

Delta 'customer service' in action

Mike Landman blogs about his experience with Delta Airlines, and one of the most appalling cases of bad customer service ever blogged.

Flying in first class, Landman was sitting next to a passenger who got so drunk that he spilled red wine all over his seat, all over his iPod, and all over his $100 noise cancelling headphones. Delta continued to serve this passenger alcohol. When Landman explained to Delta what had happened and asked for a refund, the response from Delta’s Manager of Customer Service read like something from The Big Book of Exactly Wrong Customer Service (not an actual book...yet):

Mr. Landman, we can certainly appreciate your feelings and regret your disappointment.  Since you completed your trip and the fare you paid is correct, we must respectfully decline your request for a refund.

As Landman replies:

I particularity like the fact that I completed the flight as justification that in fact it must not have been that bad. Apparently I was to do one of 2 things:

1. Jump out
2. Not return home

Then, apparently, my dissatisfaction would have been proven by my actions, not merely my words.

Delta continues:

However, in the interest of your goodwill, we will mail our Transportation Credit for $250.00.  The voucher is valid for one year from the date of issue, and can be used toward the purchase of a future Delta ticket...

In other words, “Our airline gave you the worst travelling experience of your life. Please come back for more!”

Sunday, March 05, 2006

Benetton blog a slam dunk

You, like me, may not agree with some of the opinions expressed on the Benetton blog - a blog sponsored by the Italian clothing company - but, as David Weinberger says, it’s a great example of marketing by not marketing.

Wednesday, March 01, 2006

Mothercare, HMV, and creating strong digital communities

Commercial success in the digital age will belong to those businesses that attract, engage and organise digital communities to meet multiple social and commercial needs. By creating strong digital communities, businesses will be able to build customer loyalty to a degree that today’s marketers can only dream of.

Think of HMV and Mothercare. Would they struggle as much had they developed a community strategy which was embedded into all that they did? Could they have beaten the big supermarkets and internet players by revising their bricks and mortor strategy?

Rosabeth Moss Kanter in her book Evolve says

One company’s loyal community of empowered users is another one’s nemesis.

Cross-posted from the blog for the book Communities Dominate Brands

VNU Blogs & Social Media Forum

I’m on the advisory board for VNU’s Blogs & Social Media Forum, which takes place on May 17 in London. I’ll also be participating in the Making the right connections workshop, with Stormhoek CEO Jason Korman and Dresdner Kleinwort Wasserstein’s Global CIO, JP Rangaswami. (I actually met JP Rangaswami in the check-in line to fly back from Innovate Europe in Zaragoza last year, having an all too brief chat. It’s my good fortune to end up on a panel with him.)

It should be a great event, as we try to rip to shreds the traditional conference format and do something much more participatory and conversational, all while exploring the impact of blogs, RSS, and wikis on business and industry. Sign up today!

Monday, February 27, 2006

The Piracy Paradox

Tyler Cowen at Marginal Revolution has a take on the fashion industry’s knock-off-based innovation economy, based on Scott Cunningham’s new paper, The Piracy Paradox:

The authors argue that the fashion sector has more innovation because of its near-absence of copyright protection.  Here is some brief background on the issue.

Fashion is a status good.  You wear a new design if some other people do (it must be focal as an object of status), but not if too many other people do.  You want some degree of exclusivity to your wardrobe.  So let’s say a new design comes out.  There will be some early adopters, but then a rapid series of rip-offs from other companies.  Once the rip-offs come, companies invest in making further designs.  Fashion is ephemeral and the rip-offs spur the next round of innovation.

I think it’s important to make a distinction here between design and innovation. Innovation, in my book, implies additional functionality, a permanent leap forward, even if slight. Not all design is innovative. Fashion design is mostly non-innovative design. Nor are clothes quite classifiable as art objects, the way poems or paintings are--garments need to be worn to exist, which makes them more like theatre than anything else.

In terms of an economic model, I’m not sure piracy in the fashion industry is comparable to piracy in the music industry. A pirated copy of Lawrence of Arabia offers the same user experience as the paid version. But a pirated Prada bag is not a Prada bag, nor, for the most part, do the real thing and the copy share the same customer base. As I mentioned, fashion is fundamentally an interactive, "live performance"--and to that extent, it cannot be pirated quite the way entertainment can.

There still may be lessons for entertainment here: I think one of the reasons fashion tolerates piracy so well is that fashion houses are far more focused on brand-building than on product. And piracy actually helps build a brand.

Maybe entertainment companies focus more on brand than product. Why do musicians release an album a year? Why shouldn’t they release a song a week, and distribute them to subscribers via podcast? Since iTunes started selling TV shows, I’ve spent around $100 on Battlestar Gallactica and Lost episodes--and it would be double that if I could get 24.  And I’m guessing a lot of customers like me are too lazy or busy to mess with tracking down bootleg bit-torrent files. So the lesson from the fashion industry isn’t so much about innovation in product design--it’s about old-school innovation in marketing.  Increase revenues by increasing the stream of product--make the freshness of the product a selling point.