As you may have heard, the tobacco industry has been accused of using video sharing websites to get around a ban to advertising for cigarettes.

Giles Lury, our Director of Branding, was invited to comment on those latest accusations on Peter Allen and Aasmah Mir’s show on BBC Radio 5 live Programme 5 Live Drive.

To hear what Giles has to say you can listen again here  (26/8/2010 from 1:53:26 and lasts around 3 minutes).

It sounds like the worst kind of complacent pap to say that every bad experience for a customer is an opportunity for a brand, but a quote in the Chicago Tribune this week from American Airlines managing director of customer experience Mark Mitchell suggests that’s exactly the case.

Cited in an article examining the role of the ‘professional apologizers’ – aka specialist customer service staff – employed by the airlines, Mark said:

“We know how our customers score us on a routine flight, and we also know how they score us when we handle a delay situation very poorly or very well. When we handle a delay situation well, they score us about 14 to 16 points higher than they do for just a regular old on-time flight.”

Does your brand leave your customers feeling like Mr Grumpy or Mr Happy?

Staff at Southwest Airlines, meanwhile, aim to contact every passenger affected by delays or other problems within 24 hours of their experience to apologise, offer a brief explanation and a small gift - usually a discount voucher for a future flight. The result is that Southwest had the lowest consumer complaint rate of the 19 airlines ranked by the US Department of Transportation in 2009.

There are at least two differing schools of thought as to why the successful recovery of a poor experience can do wonders for brand perception. The first (and somewhat depressing) view is that consumers have come to expect certain industries to perform badly and provide poor service - a perception for which Ryanair is surely the poster child. A brand that makes an effort to repair some of the damage done, therefore, accrues bonus points above and beyond the norm.

The alternative, more encouraging possibility is that consumers understand that no brand can be perfect one hundred percent of the time, and respect those brands which acknowledge that fact and act appropriately.

Interestingly, the latter view agrees with the findings of some qualitative research we conducted recently among brand loyalists of another service provider. When talking to those most loyal to the brand, we found that they were capable of transforming even a strongly negative experience into a reason to support and believe in that brand. Thus a wrongly charged fee subsequently refunded became an  example of excellent customer relations, while stories of oustanding service from competitor brands were ignored or dismissed as ‘salesman’s tactics’.

It’s often difficult for marketers to persuade senior management that the best thing a brand can do when it gets something wrong is metaphorically to throw up its hands and admit it. No organisation likes to open up a vulnerable area to attack. The alternative, however, may be to log in one  morning to find your brand immersed in a stream of vitriol from unhappy customers – particularly in this age of social media and blogging.

So the next time you find yourself in a situation when the ordure has just headed skywards, take a deep breath, tell the truth and say you’re sorry. As your mother always told you, it’s the right thing to do…

“Your premium brand had better be delivering something special, or it’s not going to get the business” – Warren Buffet

“The conspicuous consumption of valuable goods is a means of reputability to the gentleman of leisure” – Thorstein Veblen

“Give us the luxuries of life, and we will dispense with its necessaries” – John Lothrop Motley

“Brand managers for premium brands must know when it is best to pass on short-term growth opportunities that could tarnish the brand’s long-term health” – David Murphy

“Premium…it’s a relative idea” – Anon

Borrowed with pride from all over the place.

Reading in the latest copy of our Kidscan newsletter this week about Kellogg’s moves to reduce the amount of sugar in their breakfast cereals, particularly for those aimed squarely at kids, such as Coco Pops, got me thinking about an innovative product that tackled a similar issue in a completely different way.

Sipahh started in Australia in 2005, after founder Peter Baron took a fresh look at the flavoured milk market, and found it expensive, messy to make and way too high in sugar. Sipahh straws are wide plastic straws, filled with flavoured beads that gradually dissolve as the cold milk is sucked through the straw, adding flavour and colour to the milk. The flavours are somewhat less intense (read: less sugary) than pre-mixed flavoured milk, but kids still love it – not least of all because it’s FUN to watch the milk change colour and the beads dissolve.

What I love about his approach was that he didn’t just go for the obvious solution – making a cheaper, lower sugar version. Instead, he reframed the problem and thought about physically how the milk was flavoured, moving it from part of the production process firmly into the consumer experience.

Having now expanded into a number of countries worldwide, with regional flavour variants, Sipahh still seems to be going strong – tapping into the need for parents to get calcium into their growing kids, and the kids’ desire for fun food and drink.  In 2006 multinational big-boy Nestle launched a copycat product under their Nesquik brand… always a sign that a new product or category is significantly different, interesting and relevant, although sadly it will probably keep Sipahh out of the UK.

This is an example I intend to continue to use widely when talking about innovation, because it neatly shows how powerful the way you define your starting challenge and market can be in producing truly different and new ideas.

In the age of global powerbrands, the classic Jaguar brand is being cleverly positioned and extended for new audiences. Now owned by the Indian TATA group, it has launched a new product squarely aimed at the Russian market.

The XJ Sentinel is an exlusive ‘price on application’ extension to the XJ brand – as this Guardian article cites, it’s “the ultimate vehicle for the security-conscious oligarch”. Bristling with security features, the car contains an interior armoured cell built to withstand 15kg of explosives, and tyres which will still roll when punctured by gunshot. You can even have your chauffeur sent on a security training course  - all included in the price.

The video below even contains a handy reference guide of how it performs against an arsenal of weapons. Just in case you wanted to check.

This proposition is built on a very functional need for a select group of affluent consumers. With a stream of high-profile assassinations on the mean streets of Moscow, there is no better way for Jaguar to differentiate itself from the likes of Mercedes and BMW. In addition, the insight behind the car may be irresistible for any ambitious affluent Russian businessman to resist – after all, who would want to admit they’re not important enough to have a price on their head?

It will be interesting to see if the XJ Sentinel will also give Jaguar a new lease of life in the Russian market. Watch out for it – and remember how important the passenger must be…