Designing relationships over experiences (Part 1)

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Iconic, global brands are getting record setting shares for the worst reasons. It’s time for brands to shift their focus from creating experiences to designing relationships.

Pepsi produced and aired a commercial that managed to offend the sensibilities of its most prized target audience, the youth segment. United Airlines managed to get embroiled in an outrage of human rights proportions after turning a passenger over to the authorities and allowing the use of force in one of their aircraft. Uber’s misguided culture is vented publicly, revealing the dark personality of the company that many credited for leading with a focus on service.

What these crises have in common, beyond the short term loss of value, is that they highlighted how out of touch brands are with their customers’ values. And their failings are deeply ironic, considering the scale on these companies’ investments in customer experience.

Pepsi’s infamous TV spot caps a major effort by the f&b giant in repositioning its major brands and innovating its products and distribution. How did PepsiCo manage to misunderstand its customers’ by so much? A misplaced focus.

Pepsi Kendall ad 2017

It’s bad enough that United chooses to inconvenience a paying passenger to make room for solving an internal problem (the airline has since pledged not to do that again). But turning a passenger to the authorities, and standing by as he was abused by the authorities goes against the airlines pledge to carry people safely to their destination. It underscores the entire industry’s misinformed focus on profit at the expense, and now safety, of its customers.

Protest over United forcefully deplaning a passenger

It’s been a tough quarter for Uber. Its CEO was captured on film berating a driver a few days prior to revelations that the company chose to ignore a sexual harassment claim due to the perpetrator’s good business performance. The public venting followed Uber’s misguided decision to take advantage of a taxi drivers’ strike in NYC (in protest of the new administration’s immigration ban) and revelations that it used of a secret tool to keep authorities from assessing its practices. #DeleteUber didn’t impact rides much, but criticism of its leadership continues and the company’s reputation will never be the same.

People protest Uber and the government's immigration order

In all these cases explanations were given and apologies ensued. But they beg the question–how could they get it so wrong? After all, the three are credited for leading the transformation of their respective categories by answering unmet customer wants and needs.

I would argue that ultimately it’s a matter of focus. Over the past decade or so, brands have dedicated large resources to enhance the customer experience through technology applications and product innovations. But what good are intuitive apps, sleeper seats and custom flavored sodas if your customers feel offended, alienated and unsafe?

Businesses must shift their focus to the customer relationship (a more rewarding and reliable goal, in the face of accelerated technology and innovation cycles). This proposal is not as esoteric as it sounds, but it does call for collaboration across disciplines to create business models that can realize higher proximity with the customer.

In contrast to the PepsiCo, United and Uber ‘fails’, many companies are leading through relationship. I’ll cover those in my next post.

Diego Kolsky is Partner and ECD at The Velo Group.