Service brands: vision of the future?

As a marketer and consultant, I always find it difficult to explain what a brand is to people that are not familiar with the concept (e.g. my mom). This task of explaining things becomes increasingly difficult when the brand is not something you can touch or feel like a service.

Service Brands are populating the landscape today and I feel a strong desire to learn from them as many other marketers should. Why? Because the idea of customer engagement, loyalty, or the idea of employees living the brand are old news to the service brands that get it right. Sure, the work is never done, but they are light years ahead of the consumer packaged goods companies.

I have put together the below diagram as an example of how the landscape of product-to-service brands is complex:

Examples Service Brand Landscape

The Bottom Line:

Three brands to take a page from are: Scottrade, Netflix, and Red Hat.

  • Scottrade has mastered customer service in my opinion. I must admit that I have a couple of accounts with them and within hours of making a major transaction on-line the local office (1 mile away) calls to make sure everything went as I expected.
  • Netflix mastered a simple concept of adapting to consumers lives and taking away the hassle of the rental store and late fees. Simplicity is their virtue. The next chapter of on-line and downloads for movies will likely test them.
  • Red Hat sells “free software”. In the early days, they boxed free software and made it easy to buy. Now they are leading and prospering in the enterprise business software arena and wining more than their fair share. The company’s culture of transparency and openness that is shared with the open-source community which fuels the software is Red Hat’s greatest asset. How else could you actually sell free stuff?

Links of interest:

Chris Grams Blog – Senior Director of Brand Communications & Design, Red Hat

The Official Netflix Blog

Scottrade YouTube Channel

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  1. As Brand Manager for a large non-profit, I’ve been neck-deep in branding services rather than tangible product. Almost as difficult as working with your constituents around the brand is working with veteran staff members who identify branding as stamping everything they touch with our logo (a tangible), rather than branding in the broader sense.

    Since our main target audience grows younger, we have much to learn from other successful service entities, especially when our existence depends on members who must pay dues in order for us to exist.

  2. I think the hybrid product/service model is going to steadily become more dominant in the market. We can see the trend of mass personalization already with facebook, myspace, youtube, etc. Even some of the big apparel companies like Polo, Nike and Converse are offering design-it-yourself merchandise. Additionally, we need to consider how easy it is for consumers to research and compare products online, as well as for consumers to organize and connect, consequently increasing their power and influence over the companies they purchase from. It therefore seems like CPG companies have a somewhat paradoxical challenge–they need to reach a broad and large group of customers in order to be profitable, but also need to provide a certain amount of personalization/customization for customers to be satisfied. It seems like a hybrid product/service model addresses this issue most efficiently: the product itself can be modular, but the service (especially if it’s customer self-service) addresses the needs of the individual customer. Apple does this extraordinarily well–they provide the same content and content management tools to everybody, but individual playlists and song choices are completely up to the customer to choose.

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