A retail brand that used to be cool drops its logo from its clothes. A once-mighty smartphone company continues to lose market share. A giant fast-food chain tries to lure customers back with a major rebrand.
Every day, the business world is littered with headlines like these: cautionary stories of companies that are struggling to keep customers. Once undisputed leaders in their industries, these companies are bleeding revenue, profits and market share. While there are many reasons why big brands eventually lose their luster, the more important question is: What will it take for these companies to turn around their business?
Everybody loves a comeback story, but orchestrating one isn't easy. The good news: History shows us that it's possible to turn a declining company into a rising brand once again. Here are three paths back from the brink - all driven by closer, smarter customer relationships.
- Innovate for your customers.
If you're trying to lure back customers, you had better offer customers something of value. That's the lesson from Delta, a company that was headed for bankruptcy a few years ago but has pulled off the one of the biggest turnarounds of 2013.
How did Delta do it? By taking a customer-centric approach:
Delta focused on the things that mattered most to customers ÛÒ reliability and service. It brought back the Red Coats, senior airport customer service agents empowered to solve problems on the spot. It also implemented a "flat tireÛ policy that allows workers to waive change fees and schedule passengers on the next flight if they were delayed by unforeseen circumstances. Delta added WiFi to their fleet faster than competitors, and it achieved 95% on-time performance without cancellations.
A failing brand is often a sign that there's an issue with your products or services. Delta's story shows that putting the customer at the center of everything you do - and letting customer insight drive innovation - is the right step forward.
When your brand is in decline, letting customer insight drive innovation is the right step forward. (CLICK TO TWEET)
- Get back to basics.
In the early 1990s, IBM's business was in trouble due to the recession and increasing competition. In fact, in 1993, the company reported an $8 billion quarterly loss - the largest corporate loss in history at that point in time.
To turn its business around, IBM didn't launch a splashy marketing campaign or a brand new logo. Instead, it went back to the basics of its business and simplified its strategy:
Under the leadership of Lou Gerstner, IBM shed businesses that had pushed it away from its core competencies and jettisoned redundant infrastructure. "The last thing IBM needs right now is a vision," said Gerstner, referring to his goal of getting IBM back to its former glory. IBM set its sights on three areas: hardware, a business-software line, and lucrative IT services. The ability to see a path, take decisive action, and simplify the organization helped stave off the worst.
When your company is in trouble, it might be tempting to do a rebranding exercise. What IBM's success shows us, however, is that getting back to what you do best and simplifying and clarifying your strategy is often more useful.
Getting back to basics is harder than it sounds: you need to focus on the basics that your current, former and potential customers really care about. If you truly know your customers, you are more likely to come up with a clear strategy that makes sense for what's happening in the market now. Don't go at it blindly: let your customers show you the way.
Knowing what current, former and potential customers care about will help clarify your business strategy. (CLICK TO TWEET)
- Improve the customer experience.
There's no better time to focus on your customers than when you're in the process of a turnaround. One example is Sprint, currently the third largest wireless network operator in the US. Its comeback was in no small part due to the leadership of Dan Hesse, who took over as CEO in December 2007 as the company was only weeks away from filing for bankruptcy.
Riding on a reputation as an executive who preferred simplicity when it came to dealing with customers, Hesse's trademark offering was the "Simply Everything" plan -- the first time a carrier offered unlimited flat-rate pricing on voice calls, text messages, and data. As the years progressed Sprint started showing improvement in customer service metrics -- it is the most improved company in the American Customer Satisfaction Index over the last six years -- and the perception of its network began improving.
By focusing on a key obstacle to customer satisfaction, Sprint was able to avoid bankruptcy and start becoming a profitable company once again. While many companies facing bankruptcy put the lion's share of their energy in cost-cutting and rationalization, Sprint also recognized the importance of providing great customer experiences - especially when you're in the process of rebuilding your brand.
Cost-cutting alone won't help when rebuilding your brand. Providing great customer experiences is key. (CLICK TO TWEET)
Collectively, these examples show that when your brand is in trouble, getting closer to the customer voice becomes even more critical. Having the right leadership in place is useful, but your customers can help sharpen your strategy and validate whether you're on the right path.