Saturday, February 5, 2011

House of Brands idea great as long as they're not homogenised

Hard to believe, but my car's heading into the panel shop for the second time in twelve months because some buffoon, probably texting or in deep conversation on the hand set, rammed into the BMW X5 stopped behind me hard enough to push it a metre or so into me. "It happened so quickly," she said.

What? We were stationery for at least a minute before she thumped the Beamer without even hitting the brakes on the Honda borrowed from her mate. I'd love to have heard that conversation later in the evening!

Anyway, the point of this is that it's once again locked me in mortal combat with my insurer and fender benders. I have my preferred panel shop and the insurer has theirs, but we haven't got to haggling over that yet. No. We're still at the so-called driveway assessment stage. Sorry. We're not at the driveway assessment stage because, as a seriously overworked traffic manager at the assessment centre pointed out, the company has cut staff, while adding to its stable of brands.

It's an interesting take on economy of scale and its interface with a multi-brand strategy. The brand bit of it is all about creating products and services that appeal to clear niches in the marketplace. The problem is that, at the head of the brand household, is a corporate entity with its own commercial objectives. The challenge from the brand perspective is to ensure that each brand retains its own culture, its connection with its community of customers, while you're taking advantage of greater corporate scale.

My recent experience suggests to me that one Australian company that prides itself on its corporate "One Company: Many Brands" strategy is battling to maintain individual brand identity while deriving benefits from economy of scale at the back end.

In short, the company is using its multiple brands as a growth engine, but failing to recognise that, when customers need it most i.e. to make a claim, they come into contact with the back-end of its business - call centres, assessment centres and so on.

This week, for example, I rang to make a claim and abandoned my call after waiting 12 minutes entertained by jingles and lame messages. Several hours later, I rang again, my first contact with humans being some 10 minutes later. And cheekily, one of the hold messages said they understood I wanted to talk to a person, not a voice prompt. They were right. I did want to speak to someone!

Concluding the second call, I was informed that someone would call me in the next 24 hours to book my car in for a driveway assessment. 24 hours later - nothing. My wife tried to phone the assessment centre without luck. She drove over. The harassed traffic controller said they'd cut staff and were struggling to cope. If this isn't material for Undercover Boss, I don't know what is!

Believe it or not, this is not a whinge. You see, the assessment centre is something of a processing funnel for all the company's brands - economy of scale. The experience you get with one brand at this point is no different that you get with any of the company's other insurance brands.

Homogenisation of back-end support systems to achieve economy of scale makes absolute sense from a financial perspective. But companies that take this approach must understand that you can't homogenise brand experience - because the essence of brand is tribal and unique.

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