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Branding
     labour-intensive
     services
     A labour-intensive service brand can be only as strong as the people performing the
     service. But, say Leonard L Berry and Sandra S Lampo, there are three guiding
     principles for developing strong brands for labour-intensive services: orchestrate the
     clues; connect emotionally; and internalise the brand. The reality of such branding is
     that service providers’ actions with or for customers transform a company’s brand
     aspirations to brand reality.




     Independent research reveals that American                 service system doesn’t always work as intended
     consumers prefer Mayo Clinic to any other                  but it does work most of the time, earning
     healthcare institution if they have a serious medical      patients’ trust, loyalty and praise.
     condition and their personal finances or health plan
     is not an impediment. How did this happen for an           As Mayo Clinic’s director of marketing, Kent
     organisation that opened shop in the middle of a           Seltman, recently wrote: “There’s a humbling
     Minnesota cornfield, had a one-person marketing            lesson here for marketers. Great brands, in the
     staff until 1992 and advertised very little?               end, require great products or great services.
                                                                Perhaps we in marketing exaggerate our
     The answer derives from how strong service                 importance in the building of great brands,
     brands are created. Mayo Clinic meets or exceeds           particularly great service brands. The things we
     the expectations of most of its patients by                do to create buzz in the marketplace are clearly
     delivering an integrated, thorough service                 secondary to word-of-mouth in consumers’
     experience. Patients don’t just get a doctor, they         selection of healthcare providers”.
     get the entire organisation. From exercise
     physiologists to endocrinologists, Mayo Clinic             A brand is not a name, logo or advertising slogan;
     assembles the expertise and resources needed by            a brand is a person’s dominant perception when
     the individual patient.

     Imagine a huge store that sells almost everything,
     with experts in each department who work
     together to solve the individual customer’s                   ‘There’s a humbling
     problem. This is how Mayo Clinic is designed for
     medical consumers, a legacy from its co-founders,
                                                                   lesson here for marketers.
     Charles and William Mayo, who advocated the                   Great brands, in the end,
     practice of medicine as a co-operative science.
                                                                   require great products or
     One of the authors (Leonard Berry) recently spent             great services’
     a sabbatical year at Mayo Clinic studying its
     service system and performance. The Mayo

18   Business Strategy Review Spring 2004 q Volume 15 Issue 1                                                        Branding labour-intensive services
the stimulus of a name, logo or slogan is            can play important roles in brand development,
                                               presented. A brand, in short, is a reputation that   including creating awareness of the offering,
                                               develops most durably from customers’ actual         stimulating trial, and providing language and
                                               consumption experiences. Marketer-controlled         imagery to frame the desired brand. What
                                               communications such as advertising can play          marketing communications cannot do, however,
                                               important roles in brand development, including      is rescue a poor product or service. If
                                               creating awareness of the offering, stimulating      customers’ experience with the offering differs
                                               trial, and providing language and imagery to         from the advertising message, they believe the
                                               frame the desired brand. What marketing              experience and not the advertising. Advertising
                                               communications cannot do, however, is rescue a       provides an investment return only when it is
                                                poor product or service. If customers’ experience   reinforced by positive customer experiences. No
                                                with the offering differs from the advertising      US retailer advertises more effectively on
                                                message, they believe the experience and not        television than the discount chain Target but the
                                                the advertising.                                    advertising works only because customers like
                                                                                                    shopping at Target.
                                                Advertising provides an investment return only
                                                when it is reinforced by positive customer          Consumption experience is important for goods
                                                experiences. No US retailer advertises more         brands as well as services. However, the source
                                 Mayo Clinic




                                                effectively on television than the discount chain
                                                                                                    and nature of customer experiences differ for
                                                                                                    goods and services. This is especially apparent
                                                                                                    when comparing equipment-intensive goods to
                                               Mayo Clinic: exceeding expectations?                 labour-intensive services.

                                                                                                    The differences range from subtle to significant
                                               the stimulus of a name, logo or slogan is            depending on which two categories are compared.
                                               presented. A brand, in short, is a reputation        We focus on equipment-intensive goods and
                                               that develops most durably from customers’           labour-intensive services (shaded in the chart)
                                               actual consumption experiences. Marketer-            because, first, the differences are the greatest,
                                               controlled communications such as advertising        second, the branding literature emphasises




Figure 1            Goods versus service brands
                    Branding implications for four broad categories of offerings

                                                Labour-intensive          Equipment-intensive       Labour-intensive               Equipment-intensive
                                                goods brand               goods brand               service brand                  service brand
                                                (Judith Leiber Handbags,   (Ritz Crackers,          (Olive Garden Restaurants,     (AT&T,
                                                Dom Perignon               Magnum Ice Cream Bars,   Virgin Airlines,               IMAX Theaters,
                                                Champagne, Painter/Artist) Bounty Paper Towels)     Hairstylists)                  TiVo)




 Focal brand                                    Product                   Product                   Company or person              Company




 Primary sources of benefit                     Product and people        Product                   Product, people, facilities    Equipment and sometimes
                                                                                                    and equipment                  facilities and people


 Quality level
                                                Modestly variable         Uniform                   Variable                       Uniform
                                                to variable

 Experience touchpoints                         Relatively few            Relatively few            Numerous                       Relatively few



 Production site                                Rarely experienced by     Not experienced by        Usually experienced by         Sometimes experienced
                                                customers                 customers                 customers                      by customers




Branding labour-intensive services                                                                     Spring 2004 q Volume 15 Issue 1 Business Strategy Review   19
Customers for goods don’t visit the factory;
        service customers often do


     packaged goods, which are equipment-intensive in           around on two legs...” as services researchers
     their manufacture; and, third, relatively little has       Leslie de Chernatony and Francesca Dall ‘Olmo
     been written specifically about services branding          Riley put it.
     – especially from the customer’s perspective.
                                                                Because goods are produced before they are
     In equipment-intensive goods, the product is               consumed, they can be inspected prior to
     branded. For virtually all services, however, a            purchase. Companies that sell labour-intensive
     company or specific service provider are                   goods, such as certain types of clothing, can
     branded. The focal brand differs for services in           inspect and remove items not meeting
     part because they lack the tangible form that              specifications before shipping to vendors.
     facilitates packaging, labelling and visual display.       Conversely, many services are produced and
     A beauty salon’s name and logo can be put on               consumed simultaneously, thereby limiting the
     the facility and even on the service provider’s            opportunity for pre-consumption quality inspection.
     clothing but cannot be put on the haircut.
                                                                Branding plays a special role for labour-intensive
     Moreover, brand impact shifts from product to              services because strong brands increase customers’
     company or person in proportion to the role                trust of an intangible, variable offering that is
     service plays in creating the benefits customers           difficult to evaluate prior to purchase. A strong
     buy. Customers brand the source of the benefit             brand is the surrogate when there is no dress to
     they seek in purchasing. Washing powder                    try on, no automobile to test-drive, no bananas to
     provides the benefit and Persil is the focal               scrutinise. The more consequential, complex and
     brand. Few customers know or care that Unilever            variable the service, the more customers need
     is the manufacturer.                                       brand reassurance. As Stan Richards, founder of
                                                                Dallas-based advertising agency The Richards
     Conversely, customers brand the company for                Group, stated in a speech: “A strong brand is a
     services that are not uniquely dependent on a              safe place for customers”.
     specific person, such as a restaurant or hotel
     service. The more the service’s value to the               In general, services present more customer
     customer equates to an individual provider, the            “touchpoints”, or discrete experiences, than
     more likely it is that the individual will be the          goods. With goods, the customers’ experience
     primary brand rather than the company. It is               with the product comes largely from seeing,
     quite common, for example, for customers to                handling and using it. With labour-intensive
     follow a hair stylist who changes salons.                  services, the breadth of discrete experiences is
                                                                typically more extensive and often of much
     The labour-intensity of goods and service                  longer duration. Customers for goods don’t visit
     production figures prominently in the consistency          the factory; service customers often do.
     of quality. Generally, the greater the involvement
     of human beings in the production of a good or             Consider the breadth and duration of brand-
     service, the greater the variability. Labour-              impression touchpoints for airline travel. The
     intensive offerings are less predictable because           customer directly experiences at least three
     human beings vary in their skills, knowledge,              service “factories”: the departure and arrival
     personalities, attitudes, moods and personal               airports and the aeroplane. Within these
     commitment. Variability occurs not only among a            environments, passengers experience facilities,
     group of employees but also with the same                  equipment, multiple service providers and other
     employee as a result of fatigue, personal                  customers. It is a complex mix of experiences
     problems, an encounter with an unpleasant                  over a period of hours with numerous opportunities
     customer or other reasons.                                 for pleasing or displeasing customers.

     From a quality and branding standpoint, a bank’s
                                                                Branding when the product is a
     manager of its ATM network has a different set of
                                                                performance
     concerns than the manager of human tellers. In
     the latter case “...the brand deliverer...walks            A labour-intensive service brand can be only as

20   Business Strategy Review Spring 2004 q Volume 15 Issue 1                                                         Branding labour-intensive services
strong as the people performing the service.         Managers must consider whether the setting
                                     Service providers’ actions with or for customers     communicates the brand image the company
                                     transform a company’s brand aspirations to brand     seeks. Mechanics clues signal what customers
                                     reality; their on-the-job performance turns a        may expect from the service and create a
                                     marketer-articulated brand into a customer-          critical “first impression” before customers can
                                     experienced brand. For labour-intensive services,    experience functional or humanics clues.
                                     the most important marketers are the employees       Travellers frequently select a restaurant based
                                     who perform the service. The importance of           on what it looks like, for example.
                                     employee performance permeates each of three
                                     branding principles we now discuss.                  Mechanics clues have the greatest impact on
                                                                                          brand strength when they contribute directly to
                                     Principle no. 1: orchestrate the clues               customer value creation. They are especially
                                     Customers always have an experience when they        important for services in which customers
                                     interact with an organisation. They consciously      experience the facilities for an extended time,
                                     and unconsciously filter a stream of “clues” and     such as hotels, hospitals and air travel.
                                     organise them into a set of impressions, both        By orchestrating mechanics clues, US airline
                                     rational and emotional. The composite of three       JetBlue Airways has established a distinct brand
                                     types of clues introduced to the management          identity and achieved impressive early success.
                                     literature by consultants Lewis Carbone and          The clues include leather seats equipped with a
                                     Stephan Haeckel creates the total experience.        seat-back monitor showing DIRECTV
                                                                                          programming free of charge, extra legroom and
                                     Functional clues concern the technical quality       an endless supply of high-quality snacks.
                                     of the offering: does the product work and is the
                                     service competently performed?                       Starbucks could squeeze more tables into its
                                                                                          facilities but crowded furniture would
                                     Mechanics clues are associated with objects          undermine its value proposition of a respite and
                                     and include sights, sounds, smells, tastes           a place for private conversation. Barnes & Noble
                                     and textures.                                        makes book shopping fun with creatively
                                                                                          designed, spacious, comfortable stores that
                                     Humanics clues are stimuli emanating from            include chairs and benches where customers
                                     people, such as language, mannerisms,                may relax with a book, magazine or Starbucks
                                     enthusiasm and appearance. Customers tend to         coffee. Busy consumers who rush in and out of
                                     interpret functional clues rationally and            other stores linger in Barnes & Noble.
                                     mechanics and humanics clues emotionally.
                                                                                          Humanics clues typically offer the best
                                     Strong-brand service companies tell a cohesive,      opportunity to create a strong, differentiated
                                     compelling story through the management of           brand for labour-intensive services that
                                     clues, leveraging the opportunity to earn            customers experience directly. Human interaction
                                     customers’ confidence through functional             presents the best chance to exceed customers’
                                     quality and their affection through mechanics        expectations, provide memorable service
                                     and, especially, humanics quality.                   experiences and build customers’ trust in a firm.
                                                                                          Exceeding customers’ expectations requires the
                                     The three categories of clues play different roles   element of pleasant surprise and provider-
                                     in developing and differentiating a labour-          customer interaction usually offers the best
                                     intensive service brand.                             opportunity to achieve it. Just as labour intensity
                                                                                          can produce unwanted variability in the service,
                                     Functional clues are the foundation. Companies       so it can produce pleasing variability when an
                                     cannot compete without customers’ confidence         employee performs with uncommon grace,
                                     in their competence. Employee kindness and           kindness, respect, resourcefulness or problem-
                                     responsiveness cannot rescue an unreliable,          solving persistence.
                                     error-prone core service. Functionality,
                                     however, is rarely enough to create a                Our research underscores the importance of
                                     differentiated brand because competitors are         humanics in developing strong service brands. In
                                     often quite similar in their technical               the first phase of our study, we asked 60
                                     capabilities. Differentiation on functionality       consumers to select a service brand they hold in
                                     alone is difficult to achieve.                       high regard and would recommend to a friend (a
                                                                                          high-preference brand) and to select a service
                                     Mechanics clues provide a tangible                   brand they do not hold in high regard and would
                                     representation of the intangible service. Facility   not recommend (a low-preference brand).
                                     design, equipment, furnishings, signs, displays
                                     and colours, among other sensory clues, paint a      Respondents provided detailed information about
                                     visual picture of the service. At a minimum,         their selections, including listing all the
                                     mechanics clues offer a setting for the service.     descriptive words, thoughts, characteristics,

Branding labour-intensive services                                                          Spring 2004 q Volume 15 Issue 1 Business Strategy Review   21
symbols or images (known as brand associations)            and resource allocations – that service employees
     for their high- and low-preference brands. We              provide service.
     then asked respondents to pick the single most
     important association that helped them                     Principle no. 2: connect emotionally
     determine their opinion of the brand.                      Great service brands establish an emotional
                                                                connection with customers. These brands reach
     Employee behaviour was, by far, the most                   beyond a purely rational and economic message,
     influential in shaping consumers’ perceptions of           create a personally rich experience, and spark
     their high- and low-preference brands. Of the 60           customer feelings of closeness, affection and trust.
     most influential associations noted for high-              As retired advertising executive Charlotte Beers
     preference brands, 82 per cent related to                  wrote: “The truth is, what makes a brand powerful
     employee behaviour; for low-preference brands it           is the emotional involvement of customers”.
     was 90 per cent. The influence of employee
     behaviour – employees’ attitudes, competence               Emotional connections require values alignment
     and their personalisation of the service – was             between brand and customers. The strongest
     confirmed in the later phases of our research              brands are those that reflect the core values the
     using different methods and larger samples.                target market holds dear. Touching customers
                                                                emotionally through authentic, innovative, caring,
     The following three quotes from respondents,               generous service experiences elevates a brand
     indicative of many others, illustrate the powerful         beyond price, features and benefits to a higher
     role employee behaviour plays in brand                     level of meaning – and customer commitment.
     development or destruction. The last quote                 Advertising can set the stage but customers are
     demonstrates that good mechanics generally                 well attuned to commercial overstatement and
     cannot rescue bad humanics:                                generally require experiential proof that a company
                                                                genuinely cares about them as human beings.
     “Every time I walk into that store, the sales clerk
     has a smile on her face. Seeing her smile makes            Services that are periodically delivered,
     me smile. I don’t know how she does it but she             personally important, intimate, complex, variable
     always seems like she is having a good day. She            in quality, family oriented and/or highly
     makes it a pleasure to shop there.”                        interactive lend themselves particularly well to an
                                                                emotion-based brand positioning. Many services
     “No one knows how to operate any department in             have some or all of these characteristics,
     that store. Every time I ask someone for help,             including medical help, insurance, home repair,
     his/her response is ‘Hmmm...I don’t know’. If I’m          banking, hairstyling, clothes retailing and car
     lucky, he/she might say ‘Let me ask someone                repair. For services such as these, customers
     else’. Inevitably, they always seem to ask                 often seek a close and trusting relationship and
     assistance from another employee who doesn’t               respond with their loyalty when they find it:
     know either! I don’t know how those employees
     even make it to work every morning.”

     “This grocery store is brand new and it looks like
     they spared no cost in the building. In fact, it
     looks more like a department store than a grocery
     store. But no matter how nice it looks or how
     nice the facilities are inside, I will never shop
     there again. The employees there are just rude
     and lazy. They act like it is a chore just to check
     out my groceries or answer my questions. I would
     much rather go to my old grocery store. It may
     not look as good but the people there are nice.”               ‘The truth is, what
     Excellent humanics are critical in building a                  makes a brand
     strong brand for labour-intensive services that
     customers experience directly. Functionality is                powerful is the
     essential but insufficient. Innovative mechanics
     can spark interest, stimulate trial and, for certain           emotional
     services, offer core benefits. Humanics play a
     more pervasive role because treatment of the                   involvement of
     customer is central to the service experience.
     Customers want service employees to provide                    customers’
     service. The primary reason many service brands
     underperform is too many managers who don’t
     insist – through their own behaviours, policies

22   Business Strategy Review Spring 2004 q Volume 15 Issue 1                                                          Branding labour-intensive services
“I have been going to this restaurant every            store’s offering links traditional family values
                                     Monday night at 7pm for years. The manager and         with an innovative, highly personal experience.
                                     I have gotten to be very good friends because I        No mall stores engender as much palpable
                                     go into his place so often. Now, every Monday          customer joy as Build-A-Bear Workshop.
                                     night he saves my table for me. I never have to        Marketers can learn about the emotional
                                     wait in line or make a reservation. In fact, I don’t   penetration of their brands just by observing the
                                     even have to order. He has my favourite plate          body language of customers considering or
                                     waiting for me.”                                       experiencing their offerings.

                                     “I just love the sales associate at this place. She    As Clark has written: “When I first opened Build-
                                     always calls me when something comes in that           A-Bear Workshop, I expected that children would
                                     she thinks I might like. If I call her before I am     be enthusiastic customers. Not as obvious is the
                                     coming into the store, she will pull outfits in my     other huge segment of our business.
                                     size with matching shoes, hose, and handbags           Grandparents, parents, aunts, uncles and
                                     that she thinks I might like and have them             teenagers all love the concept of making their
                                     waiting for me in the dressing room. She also has      own bears. Teddy bears are ageless and so is the
                                     a Diet Coke with lemon waiting for me because          bear-making process”.
                                     she knows that is what I like.”
                                                                                            The St Paul Saints are a minor-league
                                     “My doctor is amazing. Even though I only go to        professional baseball team in St Paul, Minnesota,
                                     him two or three times a year, he always asks          that consistently sells out home games and has a
                                     about each of my kids...by name!”                      long waiting list of people wanting to buy season
                                                                                            tickets. What makes the Saints’ success even
                                     Each of these quotes from our study resonates          more impressive is that it operates in the same
                                     with emotion. When consumers use words like            metropolitan market as a major-league team, the
                                     “love” and “amazing” to describe service providers,    Minnesota Twins. Providing a service premised
                                     they are conveying a high – and unusual – level        on the core principle that “fun is good”, the
                                     of commitment to a commercial relationship. The        Saints offer a strong entertainment value for
                                     brand has become personal to them and                  families and have earned the affection and
                                     important to them. They are not just loyal             loyalty of the community.
                                     customers; they are advocates who are prepared
                                     to do their part to sustain the relationship.          At Saints’ home games a band plays as fans
                                                                                            enter the ballpark. A pig is the team’s mascot,
                                     As the quotes above and the examples below             carrying water and new baseballs to the umpire
                                     illustrate, emotionally strong brands always           between innings and wearing different
                                     reflect what advertising agency executive Jeff         costumes throughout the game. Before each
                                     Bremser calls “brand humanity”. Such brands            season, school children participate in a “name
                                     “relate in human terms to human beings”.               the pig” contest. Events, such as a sumo
                                                                                            wrestling match, are staged on the field between
                                     One of the most impressive US retailing success        innings. Players hold a pre-game autograph
                                     stories of recent years is Build-A-Bear Workshop,      session on the field and sometimes read to
                                     which has grown to more than 140 stores since          children before games at the “reading tree” just
                                     its founding in 1997. Build-A-Bear sells more          outside the stadium.
                                     than the stuffed teddy bears, dogs, frogs, kittens
                                     and bunnies customers take home; the                   Each home game also features an overall
                                     company also sells an experience that creates          promotional theme. One of the best-ever
                                     family joy. The National Retail Federation named       promotions was Halloween in July. Fans were
                                     Build-A-Bear Workshop the Retail Innovator of          encouraged to wear costumes to the game and
                                     the Year for 2001.                                     children received free candy. Fans in the best
                                                                                            costumes won prizes.
                                     The store’s functional, mechanics and humanics
                                     clues are orchestrated to create an emotionally        “The fans are the magic,” says Saints general
                                     rich experience. Designed as a mini-theme park         manager Bill Fanning in the book Discovering the
                                     in the shopping mall, the store features two           Soul of Service. “Our job is to provide a fun, fan-
                                     animated bear sentries who greet customers.            friendly, personalised atmosphere that
                                     Customers may buy pre-made stuffed animals             encourages their collective personality to come
                                     but most choose to personally create their own at      out. Win or lose, we want the fans to leave with a
                                     the stations in the store: Choose Me, Stuff Me,        smile on their faces”.
                                     Hear Me, Stitch Me, Fluff Me, Name Me, Dress
                                     Me and Take Me Home.                                   Principle no. 3: internalise the brand
                                                                                            Services are just as intangible for employees as
                                     Founder and CEO Maxine Clark created a store           they are for customers. Employees must
                                     experience that makes customers smile. The             understand and believe in the brand to market it

Branding labour-intensive services                                                            Spring 2004 q Volume 15 Issue 1 Business Strategy Review   23
well to customers. The more service employees              Garden sponsored a series of “Family Reunion”
     internalise the service concept and values, the            dinners across its entire chain of more than 500
     more consistently and effectively they are likely          restaurants. Each restaurant was asked to invite
     to perform their service roles.                            two families in their community experiencing a
                                                                special need to enjoy a family dining experience
     Internal branding means teaching, selling and              at Olive Garden free of charge. The restaurants
     reinforcing the desired brand to employees.                worked with community organisations and
     Service companies need to emphasise brand-                 monitored local news reports to choose the
     strengthening behaviours in employee training              families. The Family Reunion dinners included a
     and education. The desired brand experience                serviceman recently home from the Iraq war, a
     for customers and the employees’ role in                   mother and son who hadn’t seen each other for
     providing it should consistently frame company-            65 years and families consumed by medical bills
     to-employee messages: in written materials such            who had not been out to dinner for a long time.
     as training manuals; in new employee
     orientation sessions; in regular gatherings, such          The Family Reunion dinners reinforced to
     as pre-shift huddles; in company courses; in               employees the meaning of Olive Garden’s
     individual and unit performance evaluations and            advertising tag line: “When you’re here, you’re
     reward decisions.                                          family”. Olive Garden president Drew Madsen
                                                                commented in an interview: “Employees told us
     The brand strategy – and the customer and                  that they felt more connected to Olive Garden
     competitive research that supports it – should be          than ever before. Others shared that they were so
     regularly communicated to employees. Keeping               touched by the act of service that they would
     brand-related information from the field                   continue to be involved in the community with
     organisation because of competitive concerns is            their own families”.
     typically a mistake. Savvy competitors usually
     have the information anyway and employees                  Employees are an important “second audience”
     charged with implementing a brand strategy need            for advertising. Just as advertising can be used to
     to understand and believe in it. External brand
     development requires internal brand
     development. Employees are more likely to
     connect emotionally with customers if they
     themselves feel emotionally connected to the
     company’s purpose.

     Ritz Carlton Hotels is praised in the
     management literature for its practice of pre-
     shift, employee “line-ups” that focus each day
     on one of its service standards. What Ritz Carlton
     actually accomplishes is daily reinforcement of
     brand-strengthening employee behaviours.
     Darden Restaurants, a successful operator of
     casual dining restaurants with more than 1,200
     outlets throughout North America, practices
     internal branding with particular zeal. Two of its
     chains, Smokey Bones and Olive Garden,
     illustrate this.

     Smokey Bones is a barbecue restaurant that
     seeks to be known for its energetic atmosphere,
     friendly servers, food quality and sports theme
     built around communal viewing of televised
     athletic events. The operating system is designed
     to free managers to work on the floor during
     business hours, coaching and engaging
     employees. Smokey Bones’ president, Clarence
     Otis, told us in an interview: “Employees
     frequently remark that the managers take the
     time to make it fun. Having the managers on the
     floor sustains the energy in the restaurant”.
                                                                                                                                               NewsCast




     Olive Garden’s brand promise is to provide guests
     with a genuine Italian dining experience and
     make them feel like family. In 2003 Olive                  Airport experience: plenty of touchpoints

24   Business Strategy Review Spring 2004 q Volume 15 Issue 1                                                         Branding labour-intensive services
frame a brand message for customers, so it can         value for the price you pay”, “charges way too
                                     be used for the same purpose with employees.           much”. Not one of 60 people describing a
                                                                                            favourite brand mentioned price, not even in a
                                     Mary Gilly’s and Mary Wolfinbarger’s research          positive way.
                                     show that employees see and are influenced by
                                     their companies’ advertising. Why not capitalise       In effect, customers are far more concerned
                                     on the opportunity in advertising to portray           about price for a poor service than for an
                                     employees performing the service as it should be       excellent service. Results from the other parts of
                                     performed, to speak to the company’s core values       our study empirically confirm that price – the
                                     and purpose, and even to feature actual                financial burden customers must endure to
                                     employees rather than actors?                          obtain a service’s benefits – does not equal
                                                                                            value. Depending on the nature and extent of the
                                     Lowe’s, a fast-growing US home-improvement             benefits, customers may be willing to endure a
                                     retailer with more than 800 stores, practices          relatively heavy financial burden.
                                     internal branding through multiple media. Lowe’s
                                     features top employees in 60-second                    How much more will customers pay for an excellent
                                     “advertorials” that run on cable television            service and how big a discount is required for a
                                     programming related to home improvement.               poor service? We investigated these questions in
                                     Store employees appear in the background of            the third part of our study with 304 respondents.
                                     general market television commercials that often
                                     feature service-oriented dialogue written to reach     Customers of interactive, customised services are
  Leonard L Berry                    both employee and customer audiences.                  willing to pay up to 20 per cent to 25 per cent
  (BerryLe@tamu.edu)                                                                        more for their favourite brands; customers of less
  is distinguished                   Lowe’s also uses “best-in-class” employees to          personalised services are willing to pay 10 per
  professor of                       teach merchandising, selling and service to other      cent to 15 per cent more for their favourite
  marketing and                      employees on its own corporate television              brands. Poor employee performance for
  holder of the MB                   network linked to all stores. The content of           personalised services has even more extreme
  Zale Chair in                      weekly 30-minute shows is also summarised in           price effects. Customers would demand at least a
  Retailing and                      the company’s employee newspaper. Lowe’s               40 per cent to 45 per cent price decrease to
  Marketing                          marketing director, Bob Gfeller, told us: “We look     switch to a low-preference brand. Customers of
  Leadership at the                  at store associates as disciples of the brand. One     less personalised services would require a 20 per
  Mays Business                      of the roles of marketing is to help prepare and       cent price decrease.
  School, Texas A&M                  inspire them to build the brand”.
  University. He is a                                                                       Service customers quite naturally want excellent
  former national                    Strong service brands earn higher prices               service and many are willing to pay for it. The
  president of the                   Our research is unequivocal in demonstrating           service they want often comes in human terms –
  American                           customers’ willingness to pay more for an              a warm smile, a genuine interest in helping,
  Marketing                          excellent service. This finding applies across all     respectfulness, resourcefulness, competence.
  Association.                       services but shows the strongest pattern for           Conversely, poor service clearly does not pay.
                                     interactive, customised services such as               Service employees rated low in attitude,
  Sandra S Lampo                     hairstyling. The extent to which employee              competency and/or customer relationship
  (SandiL@tamu.edu)                  behaviours drive brand preference for these            building skills weaken the brand and leave
  is a lecturer at                   services, the price premiums strong brands             revenue on the table.
  Texas A&M                          support and the price discounts weak brands
  University’s Mays                  necessitate are noteworthy.                            Opening night every day
  Business School                                                                           Offering a labour-intensive service is like
  where she received                 In the first phase of our study, which asked 60        opening night for a play. It’s live theatre every
  her PhD in                         respondents to “list all of the descriptive words,     time a customer walks in the door. The
  marketing in                       thoughts, characteristics, symbols or images that      customer’s critical review is what the brand gets
  2001. She                          come to mind” when thinking about their                – and so goes the company. Service-provider
  specialises in                     favourite brand (and, later, their least favourite     performance as judged by the customer shapes
  services marketing                 brand), all 60 referred to employee behaviours         the brand reality. Whereas brand strategy may be
  and retailing.                     for both their high- and low-preference brands.        conceived in the marketing department, it is
                                     No other category of brand associations (such as       played out one customer at a time in stores,
                                     advertising, facilities, convenience, reliability or   restaurants, offices, airports, hospitals and
                                     price) was universally mentioned. Moreover,            other venues.
                                     employee behaviour associations were always
                                     described positively for high-preference brands        Orchestrating the clues, connecting emotionally
                                     and negatively for low-preference brands.              to the customer and internalising the brand to
                                                                                            support employee performance develop a strong
                                     Price, on the other hand, was mentioned only for       service brand that lessens the influence of price
                                     low-preference brands and only in a negative           competition. The ultimate customer experience is
                                     context, for example, “prices are too high”, “no       created, not serendipitous. s

Branding labour-intensive services                                                            Spring 2004 q Volume 15 Issue 1 Business Strategy Review   25
Branding labour intensive_services

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Branding labour intensive_services

  • 1. Branding labour-intensive services A labour-intensive service brand can be only as strong as the people performing the service. But, say Leonard L Berry and Sandra S Lampo, there are three guiding principles for developing strong brands for labour-intensive services: orchestrate the clues; connect emotionally; and internalise the brand. The reality of such branding is that service providers’ actions with or for customers transform a company’s brand aspirations to brand reality. Independent research reveals that American service system doesn’t always work as intended consumers prefer Mayo Clinic to any other but it does work most of the time, earning healthcare institution if they have a serious medical patients’ trust, loyalty and praise. condition and their personal finances or health plan is not an impediment. How did this happen for an As Mayo Clinic’s director of marketing, Kent organisation that opened shop in the middle of a Seltman, recently wrote: “There’s a humbling Minnesota cornfield, had a one-person marketing lesson here for marketers. Great brands, in the staff until 1992 and advertised very little? end, require great products or great services. Perhaps we in marketing exaggerate our The answer derives from how strong service importance in the building of great brands, brands are created. Mayo Clinic meets or exceeds particularly great service brands. The things we the expectations of most of its patients by do to create buzz in the marketplace are clearly delivering an integrated, thorough service secondary to word-of-mouth in consumers’ experience. Patients don’t just get a doctor, they selection of healthcare providers”. get the entire organisation. From exercise physiologists to endocrinologists, Mayo Clinic A brand is not a name, logo or advertising slogan; assembles the expertise and resources needed by a brand is a person’s dominant perception when the individual patient. Imagine a huge store that sells almost everything, with experts in each department who work together to solve the individual customer’s ‘There’s a humbling problem. This is how Mayo Clinic is designed for medical consumers, a legacy from its co-founders, lesson here for marketers. Charles and William Mayo, who advocated the Great brands, in the end, practice of medicine as a co-operative science. require great products or One of the authors (Leonard Berry) recently spent great services’ a sabbatical year at Mayo Clinic studying its service system and performance. The Mayo 18 Business Strategy Review Spring 2004 q Volume 15 Issue 1 Branding labour-intensive services
  • 2. the stimulus of a name, logo or slogan is can play important roles in brand development, presented. A brand, in short, is a reputation that including creating awareness of the offering, develops most durably from customers’ actual stimulating trial, and providing language and consumption experiences. Marketer-controlled imagery to frame the desired brand. What communications such as advertising can play marketing communications cannot do, however, important roles in brand development, including is rescue a poor product or service. If creating awareness of the offering, stimulating customers’ experience with the offering differs trial, and providing language and imagery to from the advertising message, they believe the frame the desired brand. What marketing experience and not the advertising. Advertising communications cannot do, however, is rescue a provides an investment return only when it is poor product or service. If customers’ experience reinforced by positive customer experiences. No with the offering differs from the advertising US retailer advertises more effectively on message, they believe the experience and not television than the discount chain Target but the the advertising. advertising works only because customers like shopping at Target. Advertising provides an investment return only when it is reinforced by positive customer Consumption experience is important for goods experiences. No US retailer advertises more brands as well as services. However, the source Mayo Clinic effectively on television than the discount chain and nature of customer experiences differ for goods and services. This is especially apparent when comparing equipment-intensive goods to Mayo Clinic: exceeding expectations? labour-intensive services. The differences range from subtle to significant the stimulus of a name, logo or slogan is depending on which two categories are compared. presented. A brand, in short, is a reputation We focus on equipment-intensive goods and that develops most durably from customers’ labour-intensive services (shaded in the chart) actual consumption experiences. Marketer- because, first, the differences are the greatest, controlled communications such as advertising second, the branding literature emphasises Figure 1 Goods versus service brands Branding implications for four broad categories of offerings Labour-intensive Equipment-intensive Labour-intensive Equipment-intensive goods brand goods brand service brand service brand (Judith Leiber Handbags, (Ritz Crackers, (Olive Garden Restaurants, (AT&T, Dom Perignon Magnum Ice Cream Bars, Virgin Airlines, IMAX Theaters, Champagne, Painter/Artist) Bounty Paper Towels) Hairstylists) TiVo) Focal brand Product Product Company or person Company Primary sources of benefit Product and people Product Product, people, facilities Equipment and sometimes and equipment facilities and people Quality level Modestly variable Uniform Variable Uniform to variable Experience touchpoints Relatively few Relatively few Numerous Relatively few Production site Rarely experienced by Not experienced by Usually experienced by Sometimes experienced customers customers customers by customers Branding labour-intensive services Spring 2004 q Volume 15 Issue 1 Business Strategy Review 19
  • 3. Customers for goods don’t visit the factory; service customers often do packaged goods, which are equipment-intensive in around on two legs...” as services researchers their manufacture; and, third, relatively little has Leslie de Chernatony and Francesca Dall ‘Olmo been written specifically about services branding Riley put it. – especially from the customer’s perspective. Because goods are produced before they are In equipment-intensive goods, the product is consumed, they can be inspected prior to branded. For virtually all services, however, a purchase. Companies that sell labour-intensive company or specific service provider are goods, such as certain types of clothing, can branded. The focal brand differs for services in inspect and remove items not meeting part because they lack the tangible form that specifications before shipping to vendors. facilitates packaging, labelling and visual display. Conversely, many services are produced and A beauty salon’s name and logo can be put on consumed simultaneously, thereby limiting the the facility and even on the service provider’s opportunity for pre-consumption quality inspection. clothing but cannot be put on the haircut. Branding plays a special role for labour-intensive Moreover, brand impact shifts from product to services because strong brands increase customers’ company or person in proportion to the role trust of an intangible, variable offering that is service plays in creating the benefits customers difficult to evaluate prior to purchase. A strong buy. Customers brand the source of the benefit brand is the surrogate when there is no dress to they seek in purchasing. Washing powder try on, no automobile to test-drive, no bananas to provides the benefit and Persil is the focal scrutinise. The more consequential, complex and brand. Few customers know or care that Unilever variable the service, the more customers need is the manufacturer. brand reassurance. As Stan Richards, founder of Dallas-based advertising agency The Richards Conversely, customers brand the company for Group, stated in a speech: “A strong brand is a services that are not uniquely dependent on a safe place for customers”. specific person, such as a restaurant or hotel service. The more the service’s value to the In general, services present more customer customer equates to an individual provider, the “touchpoints”, or discrete experiences, than more likely it is that the individual will be the goods. With goods, the customers’ experience primary brand rather than the company. It is with the product comes largely from seeing, quite common, for example, for customers to handling and using it. With labour-intensive follow a hair stylist who changes salons. services, the breadth of discrete experiences is typically more extensive and often of much The labour-intensity of goods and service longer duration. Customers for goods don’t visit production figures prominently in the consistency the factory; service customers often do. of quality. Generally, the greater the involvement of human beings in the production of a good or Consider the breadth and duration of brand- service, the greater the variability. Labour- impression touchpoints for airline travel. The intensive offerings are less predictable because customer directly experiences at least three human beings vary in their skills, knowledge, service “factories”: the departure and arrival personalities, attitudes, moods and personal airports and the aeroplane. Within these commitment. Variability occurs not only among a environments, passengers experience facilities, group of employees but also with the same equipment, multiple service providers and other employee as a result of fatigue, personal customers. It is a complex mix of experiences problems, an encounter with an unpleasant over a period of hours with numerous opportunities customer or other reasons. for pleasing or displeasing customers. From a quality and branding standpoint, a bank’s Branding when the product is a manager of its ATM network has a different set of performance concerns than the manager of human tellers. In the latter case “...the brand deliverer...walks A labour-intensive service brand can be only as 20 Business Strategy Review Spring 2004 q Volume 15 Issue 1 Branding labour-intensive services
  • 4. strong as the people performing the service. Managers must consider whether the setting Service providers’ actions with or for customers communicates the brand image the company transform a company’s brand aspirations to brand seeks. Mechanics clues signal what customers reality; their on-the-job performance turns a may expect from the service and create a marketer-articulated brand into a customer- critical “first impression” before customers can experienced brand. For labour-intensive services, experience functional or humanics clues. the most important marketers are the employees Travellers frequently select a restaurant based who perform the service. The importance of on what it looks like, for example. employee performance permeates each of three branding principles we now discuss. Mechanics clues have the greatest impact on brand strength when they contribute directly to Principle no. 1: orchestrate the clues customer value creation. They are especially Customers always have an experience when they important for services in which customers interact with an organisation. They consciously experience the facilities for an extended time, and unconsciously filter a stream of “clues” and such as hotels, hospitals and air travel. organise them into a set of impressions, both By orchestrating mechanics clues, US airline rational and emotional. The composite of three JetBlue Airways has established a distinct brand types of clues introduced to the management identity and achieved impressive early success. literature by consultants Lewis Carbone and The clues include leather seats equipped with a Stephan Haeckel creates the total experience. seat-back monitor showing DIRECTV programming free of charge, extra legroom and Functional clues concern the technical quality an endless supply of high-quality snacks. of the offering: does the product work and is the service competently performed? Starbucks could squeeze more tables into its facilities but crowded furniture would Mechanics clues are associated with objects undermine its value proposition of a respite and and include sights, sounds, smells, tastes a place for private conversation. Barnes & Noble and textures. makes book shopping fun with creatively designed, spacious, comfortable stores that Humanics clues are stimuli emanating from include chairs and benches where customers people, such as language, mannerisms, may relax with a book, magazine or Starbucks enthusiasm and appearance. Customers tend to coffee. Busy consumers who rush in and out of interpret functional clues rationally and other stores linger in Barnes & Noble. mechanics and humanics clues emotionally. Humanics clues typically offer the best Strong-brand service companies tell a cohesive, opportunity to create a strong, differentiated compelling story through the management of brand for labour-intensive services that clues, leveraging the opportunity to earn customers experience directly. Human interaction customers’ confidence through functional presents the best chance to exceed customers’ quality and their affection through mechanics expectations, provide memorable service and, especially, humanics quality. experiences and build customers’ trust in a firm. Exceeding customers’ expectations requires the The three categories of clues play different roles element of pleasant surprise and provider- in developing and differentiating a labour- customer interaction usually offers the best intensive service brand. opportunity to achieve it. Just as labour intensity can produce unwanted variability in the service, Functional clues are the foundation. Companies so it can produce pleasing variability when an cannot compete without customers’ confidence employee performs with uncommon grace, in their competence. Employee kindness and kindness, respect, resourcefulness or problem- responsiveness cannot rescue an unreliable, solving persistence. error-prone core service. Functionality, however, is rarely enough to create a Our research underscores the importance of differentiated brand because competitors are humanics in developing strong service brands. In often quite similar in their technical the first phase of our study, we asked 60 capabilities. Differentiation on functionality consumers to select a service brand they hold in alone is difficult to achieve. high regard and would recommend to a friend (a high-preference brand) and to select a service Mechanics clues provide a tangible brand they do not hold in high regard and would representation of the intangible service. Facility not recommend (a low-preference brand). design, equipment, furnishings, signs, displays and colours, among other sensory clues, paint a Respondents provided detailed information about visual picture of the service. At a minimum, their selections, including listing all the mechanics clues offer a setting for the service. descriptive words, thoughts, characteristics, Branding labour-intensive services Spring 2004 q Volume 15 Issue 1 Business Strategy Review 21
  • 5. symbols or images (known as brand associations) and resource allocations – that service employees for their high- and low-preference brands. We provide service. then asked respondents to pick the single most important association that helped them Principle no. 2: connect emotionally determine their opinion of the brand. Great service brands establish an emotional connection with customers. These brands reach Employee behaviour was, by far, the most beyond a purely rational and economic message, influential in shaping consumers’ perceptions of create a personally rich experience, and spark their high- and low-preference brands. Of the 60 customer feelings of closeness, affection and trust. most influential associations noted for high- As retired advertising executive Charlotte Beers preference brands, 82 per cent related to wrote: “The truth is, what makes a brand powerful employee behaviour; for low-preference brands it is the emotional involvement of customers”. was 90 per cent. The influence of employee behaviour – employees’ attitudes, competence Emotional connections require values alignment and their personalisation of the service – was between brand and customers. The strongest confirmed in the later phases of our research brands are those that reflect the core values the using different methods and larger samples. target market holds dear. Touching customers emotionally through authentic, innovative, caring, The following three quotes from respondents, generous service experiences elevates a brand indicative of many others, illustrate the powerful beyond price, features and benefits to a higher role employee behaviour plays in brand level of meaning – and customer commitment. development or destruction. The last quote Advertising can set the stage but customers are demonstrates that good mechanics generally well attuned to commercial overstatement and cannot rescue bad humanics: generally require experiential proof that a company genuinely cares about them as human beings. “Every time I walk into that store, the sales clerk has a smile on her face. Seeing her smile makes Services that are periodically delivered, me smile. I don’t know how she does it but she personally important, intimate, complex, variable always seems like she is having a good day. She in quality, family oriented and/or highly makes it a pleasure to shop there.” interactive lend themselves particularly well to an emotion-based brand positioning. Many services “No one knows how to operate any department in have some or all of these characteristics, that store. Every time I ask someone for help, including medical help, insurance, home repair, his/her response is ‘Hmmm...I don’t know’. If I’m banking, hairstyling, clothes retailing and car lucky, he/she might say ‘Let me ask someone repair. For services such as these, customers else’. Inevitably, they always seem to ask often seek a close and trusting relationship and assistance from another employee who doesn’t respond with their loyalty when they find it: know either! I don’t know how those employees even make it to work every morning.” “This grocery store is brand new and it looks like they spared no cost in the building. In fact, it looks more like a department store than a grocery store. But no matter how nice it looks or how nice the facilities are inside, I will never shop there again. The employees there are just rude and lazy. They act like it is a chore just to check out my groceries or answer my questions. I would much rather go to my old grocery store. It may not look as good but the people there are nice.” ‘The truth is, what Excellent humanics are critical in building a makes a brand strong brand for labour-intensive services that customers experience directly. Functionality is powerful is the essential but insufficient. Innovative mechanics can spark interest, stimulate trial and, for certain emotional services, offer core benefits. Humanics play a more pervasive role because treatment of the involvement of customer is central to the service experience. Customers want service employees to provide customers’ service. The primary reason many service brands underperform is too many managers who don’t insist – through their own behaviours, policies 22 Business Strategy Review Spring 2004 q Volume 15 Issue 1 Branding labour-intensive services
  • 6. “I have been going to this restaurant every store’s offering links traditional family values Monday night at 7pm for years. The manager and with an innovative, highly personal experience. I have gotten to be very good friends because I No mall stores engender as much palpable go into his place so often. Now, every Monday customer joy as Build-A-Bear Workshop. night he saves my table for me. I never have to Marketers can learn about the emotional wait in line or make a reservation. In fact, I don’t penetration of their brands just by observing the even have to order. He has my favourite plate body language of customers considering or waiting for me.” experiencing their offerings. “I just love the sales associate at this place. She As Clark has written: “When I first opened Build- always calls me when something comes in that A-Bear Workshop, I expected that children would she thinks I might like. If I call her before I am be enthusiastic customers. Not as obvious is the coming into the store, she will pull outfits in my other huge segment of our business. size with matching shoes, hose, and handbags Grandparents, parents, aunts, uncles and that she thinks I might like and have them teenagers all love the concept of making their waiting for me in the dressing room. She also has own bears. Teddy bears are ageless and so is the a Diet Coke with lemon waiting for me because bear-making process”. she knows that is what I like.” The St Paul Saints are a minor-league “My doctor is amazing. Even though I only go to professional baseball team in St Paul, Minnesota, him two or three times a year, he always asks that consistently sells out home games and has a about each of my kids...by name!” long waiting list of people wanting to buy season tickets. What makes the Saints’ success even Each of these quotes from our study resonates more impressive is that it operates in the same with emotion. When consumers use words like metropolitan market as a major-league team, the “love” and “amazing” to describe service providers, Minnesota Twins. Providing a service premised they are conveying a high – and unusual – level on the core principle that “fun is good”, the of commitment to a commercial relationship. The Saints offer a strong entertainment value for brand has become personal to them and families and have earned the affection and important to them. They are not just loyal loyalty of the community. customers; they are advocates who are prepared to do their part to sustain the relationship. At Saints’ home games a band plays as fans enter the ballpark. A pig is the team’s mascot, As the quotes above and the examples below carrying water and new baseballs to the umpire illustrate, emotionally strong brands always between innings and wearing different reflect what advertising agency executive Jeff costumes throughout the game. Before each Bremser calls “brand humanity”. Such brands season, school children participate in a “name “relate in human terms to human beings”. the pig” contest. Events, such as a sumo wrestling match, are staged on the field between One of the most impressive US retailing success innings. Players hold a pre-game autograph stories of recent years is Build-A-Bear Workshop, session on the field and sometimes read to which has grown to more than 140 stores since children before games at the “reading tree” just its founding in 1997. Build-A-Bear sells more outside the stadium. than the stuffed teddy bears, dogs, frogs, kittens and bunnies customers take home; the Each home game also features an overall company also sells an experience that creates promotional theme. One of the best-ever family joy. The National Retail Federation named promotions was Halloween in July. Fans were Build-A-Bear Workshop the Retail Innovator of encouraged to wear costumes to the game and the Year for 2001. children received free candy. Fans in the best costumes won prizes. The store’s functional, mechanics and humanics clues are orchestrated to create an emotionally “The fans are the magic,” says Saints general rich experience. Designed as a mini-theme park manager Bill Fanning in the book Discovering the in the shopping mall, the store features two Soul of Service. “Our job is to provide a fun, fan- animated bear sentries who greet customers. friendly, personalised atmosphere that Customers may buy pre-made stuffed animals encourages their collective personality to come but most choose to personally create their own at out. Win or lose, we want the fans to leave with a the stations in the store: Choose Me, Stuff Me, smile on their faces”. Hear Me, Stitch Me, Fluff Me, Name Me, Dress Me and Take Me Home. Principle no. 3: internalise the brand Services are just as intangible for employees as Founder and CEO Maxine Clark created a store they are for customers. Employees must experience that makes customers smile. The understand and believe in the brand to market it Branding labour-intensive services Spring 2004 q Volume 15 Issue 1 Business Strategy Review 23
  • 7. well to customers. The more service employees Garden sponsored a series of “Family Reunion” internalise the service concept and values, the dinners across its entire chain of more than 500 more consistently and effectively they are likely restaurants. Each restaurant was asked to invite to perform their service roles. two families in their community experiencing a special need to enjoy a family dining experience Internal branding means teaching, selling and at Olive Garden free of charge. The restaurants reinforcing the desired brand to employees. worked with community organisations and Service companies need to emphasise brand- monitored local news reports to choose the strengthening behaviours in employee training families. The Family Reunion dinners included a and education. The desired brand experience serviceman recently home from the Iraq war, a for customers and the employees’ role in mother and son who hadn’t seen each other for providing it should consistently frame company- 65 years and families consumed by medical bills to-employee messages: in written materials such who had not been out to dinner for a long time. as training manuals; in new employee orientation sessions; in regular gatherings, such The Family Reunion dinners reinforced to as pre-shift huddles; in company courses; in employees the meaning of Olive Garden’s individual and unit performance evaluations and advertising tag line: “When you’re here, you’re reward decisions. family”. Olive Garden president Drew Madsen commented in an interview: “Employees told us The brand strategy – and the customer and that they felt more connected to Olive Garden competitive research that supports it – should be than ever before. Others shared that they were so regularly communicated to employees. Keeping touched by the act of service that they would brand-related information from the field continue to be involved in the community with organisation because of competitive concerns is their own families”. typically a mistake. Savvy competitors usually have the information anyway and employees Employees are an important “second audience” charged with implementing a brand strategy need for advertising. Just as advertising can be used to to understand and believe in it. External brand development requires internal brand development. Employees are more likely to connect emotionally with customers if they themselves feel emotionally connected to the company’s purpose. Ritz Carlton Hotels is praised in the management literature for its practice of pre- shift, employee “line-ups” that focus each day on one of its service standards. What Ritz Carlton actually accomplishes is daily reinforcement of brand-strengthening employee behaviours. Darden Restaurants, a successful operator of casual dining restaurants with more than 1,200 outlets throughout North America, practices internal branding with particular zeal. Two of its chains, Smokey Bones and Olive Garden, illustrate this. Smokey Bones is a barbecue restaurant that seeks to be known for its energetic atmosphere, friendly servers, food quality and sports theme built around communal viewing of televised athletic events. The operating system is designed to free managers to work on the floor during business hours, coaching and engaging employees. Smokey Bones’ president, Clarence Otis, told us in an interview: “Employees frequently remark that the managers take the time to make it fun. Having the managers on the floor sustains the energy in the restaurant”. NewsCast Olive Garden’s brand promise is to provide guests with a genuine Italian dining experience and make them feel like family. In 2003 Olive Airport experience: plenty of touchpoints 24 Business Strategy Review Spring 2004 q Volume 15 Issue 1 Branding labour-intensive services
  • 8. frame a brand message for customers, so it can value for the price you pay”, “charges way too be used for the same purpose with employees. much”. Not one of 60 people describing a favourite brand mentioned price, not even in a Mary Gilly’s and Mary Wolfinbarger’s research positive way. show that employees see and are influenced by their companies’ advertising. Why not capitalise In effect, customers are far more concerned on the opportunity in advertising to portray about price for a poor service than for an employees performing the service as it should be excellent service. Results from the other parts of performed, to speak to the company’s core values our study empirically confirm that price – the and purpose, and even to feature actual financial burden customers must endure to employees rather than actors? obtain a service’s benefits – does not equal value. Depending on the nature and extent of the Lowe’s, a fast-growing US home-improvement benefits, customers may be willing to endure a retailer with more than 800 stores, practices relatively heavy financial burden. internal branding through multiple media. Lowe’s features top employees in 60-second How much more will customers pay for an excellent “advertorials” that run on cable television service and how big a discount is required for a programming related to home improvement. poor service? We investigated these questions in Store employees appear in the background of the third part of our study with 304 respondents. general market television commercials that often feature service-oriented dialogue written to reach Customers of interactive, customised services are Leonard L Berry both employee and customer audiences. willing to pay up to 20 per cent to 25 per cent (BerryLe@tamu.edu) more for their favourite brands; customers of less is distinguished Lowe’s also uses “best-in-class” employees to personalised services are willing to pay 10 per professor of teach merchandising, selling and service to other cent to 15 per cent more for their favourite marketing and employees on its own corporate television brands. Poor employee performance for holder of the MB network linked to all stores. The content of personalised services has even more extreme Zale Chair in weekly 30-minute shows is also summarised in price effects. Customers would demand at least a Retailing and the company’s employee newspaper. Lowe’s 40 per cent to 45 per cent price decrease to Marketing marketing director, Bob Gfeller, told us: “We look switch to a low-preference brand. Customers of Leadership at the at store associates as disciples of the brand. One less personalised services would require a 20 per Mays Business of the roles of marketing is to help prepare and cent price decrease. School, Texas A&M inspire them to build the brand”. University. He is a Service customers quite naturally want excellent former national Strong service brands earn higher prices service and many are willing to pay for it. The president of the Our research is unequivocal in demonstrating service they want often comes in human terms – American customers’ willingness to pay more for an a warm smile, a genuine interest in helping, Marketing excellent service. This finding applies across all respectfulness, resourcefulness, competence. Association. services but shows the strongest pattern for Conversely, poor service clearly does not pay. interactive, customised services such as Service employees rated low in attitude, Sandra S Lampo hairstyling. The extent to which employee competency and/or customer relationship (SandiL@tamu.edu) behaviours drive brand preference for these building skills weaken the brand and leave is a lecturer at services, the price premiums strong brands revenue on the table. Texas A&M support and the price discounts weak brands University’s Mays necessitate are noteworthy. Opening night every day Business School Offering a labour-intensive service is like where she received In the first phase of our study, which asked 60 opening night for a play. It’s live theatre every her PhD in respondents to “list all of the descriptive words, time a customer walks in the door. The marketing in thoughts, characteristics, symbols or images that customer’s critical review is what the brand gets 2001. She come to mind” when thinking about their – and so goes the company. Service-provider specialises in favourite brand (and, later, their least favourite performance as judged by the customer shapes services marketing brand), all 60 referred to employee behaviours the brand reality. Whereas brand strategy may be and retailing. for both their high- and low-preference brands. conceived in the marketing department, it is No other category of brand associations (such as played out one customer at a time in stores, advertising, facilities, convenience, reliability or restaurants, offices, airports, hospitals and price) was universally mentioned. Moreover, other venues. employee behaviour associations were always described positively for high-preference brands Orchestrating the clues, connecting emotionally and negatively for low-preference brands. to the customer and internalising the brand to support employee performance develop a strong Price, on the other hand, was mentioned only for service brand that lessens the influence of price low-preference brands and only in a negative competition. The ultimate customer experience is context, for example, “prices are too high”, “no created, not serendipitous. s Branding labour-intensive services Spring 2004 q Volume 15 Issue 1 Business Strategy Review 25