David Howgego

It’s no secret that there’s a lot of value to be had in building a high-cachet brand. People desire your products; they want to be associated with you. But not all of the effects are positive. Chief among the unintended side effects: a prestigious brand can actually mask problems in the customer experience. As the customer experience becomes more and more important to building and maintaining a brand in the digital era, this problem can be extremely damaging — causing companies to miss early cracks in the foundation of their brands.
Work that Medallia recently conducted with one luxury retailer uncovered an example of this phenomenon. The brand’s customer satisfaction metrics showed that over 95 percent of its customers were “very likely” or “somewhat likely” to recommend the brand to a friend or colleague — clearly excellent results. But upon analyzing free-form written comments included in customer feedback, the retailer discovered a less encouraging trend: nearly one in five of those comments were largely negative. This included nearly ten percent of the people who said they were most likely to recommend the brand, and over half of those who were on the fence.
The world wasn’t ending, but the retailer — which prided itself on delivering experiences deserving of its brand — clearly had more work to do than expected.
So what causes this to happen? The discrepancy often emerges for a couple of reasons:

  • The “brand halo”: when a brand’s cachet makes customers want to recommend it even though they might not recommend the experience they received. Luxury purchases often amount to large life decisions. When customers invest exceptional thought, time and money into a purchase, expectations are naturally raised, but so too is the customer’s desire to have a good experience. They want to justify their decision, and this can increase their propensity to give a higher score to luxury brands.
  • Long-term loyalty: customers who have built up a strong connection to a brand over time aren’t likely stop recommending it based on a single poor experience. However, the risk is that there are many more of these poor experiences happening than a brand would expect given the scores it might be receiving. Over time, these start adding up.

So what to do about it? First and foremost, start reviewing the qualitative feedback in a timely manner. On the frontline, it can be easy to miss or disregard qualitative feedback because employees see a high score, and naturally assume they’re doing a good job — even if they’re not. In addition to level-setting, reviewing the qualitative feedback will ensure that destructive behaviors aren’t being engrained. At the management and training level, the qualitative feedback allows you to see structural or organizational improvement that other inquiries may have overlooked, as well as enhancing your understanding of which teams are really performing best so their best practices can be shared more broadly.
Overall, this stands as a critically important reminder that, in order to really understand the experience you’re delivering, you need to look deeper than just the scores you’re getting. Particularly in the case of companies with strong brands; you could be damaging one of your most important assets, and not even know you’re doing it.

Photo Credit: mjtmail