CHAPTER 1

What You Don't Know Can Hurt You

Customers are skeptical. They've been lied to by just about everyone who's hadthe opportunity to do so. From role models who can't keep extramarital affairsfrom wrecking their golf game to behemoth corporations betting against their owncustomers' investments to politicians regularly resigning for engaging in thevery activities they legislated against, no one has been telling the truth. Youneed an element of trust to get genuine customer buy-in, but we've spent ageneration and a half teaching the public to trust nobody.

This creates a problem for today's business leaders. How do you connect withthese empowered, educated, skeptical consumers? This is a question of someurgency. If you don't have the answer, you have to figure it out now, and youhave to keep your business thriving at the same time. There's absolutely no timeto hesitate. If you cannot connect with your customers in a meaningful way, youwill become irrelevant to them. When you're irrelevant, you're replaceable, andyour customers will inevitably replace you with a brand that they do feelconnected to.

Irrelevancy arrives in those still moments when an organization is facinguncertainty. These are the times when the company is trying to figure out whatto do. Choosing the right course is difficult: if you opt for the wrongdirection, you'll saddle your company with the burden of invisibility whenyou're least prepared to bear it.

Let us show you how that happens.

Do You Want Fries with That?

Initially modeled on European cafés, Starbucks had a good thing going. We findStarbucks absolutely fascinating as a company. At the beginning, it made someexcellent decisions from a brand-building perspective: Starbucks became astrong, and arguably an iconic, brand. Yet in the wake of this success came aseries of inexplicably bad decisions that could imperil the brand's dominantposition.

Starbucks captured its initial fan base by offering an experience unlike anyother that was commonly available in America at the time. Customers responded toand valued the fact that Starbucks offered a unique experience. Starbucks'sinterpretation of the coffeehouse as a comfortable, upscale "third place" wherecustomers could relax, self-actualize, and gain valuable social currency wasirresistible. Neither work nor home, Starbucks provided a place where peoplecould spend their leisure time, socialize, and connect.

The success that Starbucks enjoys is due in no small part to its amazingcreation of an organization-specific culture. Customers understand that youcan't order a small regular coffee at Starbucks. Instead, you have to ask for aFor Here Single Grande White Chocolate Mocha.

Starbucks is about far more than selling coffee. It sells community.Specifically, Starbucks sells exclusive, aspirational community. Starbucks wasspecial because it wasn't for everyone.

While clearly Starbucks hasn't abandoned that initial concept, it has made somechoices that seem to be aimed at pursuing what appeared to be low-hanging fruit.There's a chance that this will fundamentally hurt the Starbucks brand over thelong term.

When customers were confronted with drive-through windows, a move towardautomating in order to serve more customers, and price-driven promotions, theyfound that they weren't having a unique experience anymore. They were simplybuying more expensive coffee in a setting that was eerily reminiscent of thefast-food joints they'd been trying to avoid— and now those fast-foodjoints have pricey coffee drinks of their own. Starbucks has lost itsdifferentiator.

What makes organizations go off track?

Can Anybody See Me?

What type of person are you least likely to see in a Burger King? Yes, hard-corefoodies won't be there, but for a long time, 18-to 35-year-old males, the coredemographic of the fast-food industry, weren't there either. Instead, they wereat McDonald's. Why?

McDonald's had rapidly adopted the concept of the third place and focused on theexperience that its customers got along with their large order of fries. BurgerKing had chosen to focus on the quality of the product.

There was only one problem with that approach: the largest part of the desiredaudience didn't actually care all that much about the quality of the burgersthey were wolfing down. It's not that Burger King's "have it your way" campaignwas bad, per se— it's that it featured a message that the customers had nointerest in hearing. The brand became irrelevant. Even now, Burger King isundergoing a convoluted dance to discover that sweet spot where it becomes adefault choice for the drive-through diner once again.

What's the best way to recover lost market share from your competition?

You Can't Reach That Bar?

Managing customer expectations has long been considered the Holy Grail ofmarketing. It's certainly an elusive goal. We'd say it's impossible to achieveif you don't take one critical piece of information into account: customerexpectations are not forged by your company; they're created by yourcompetitors.

The customer who is in your store is not judging your merchandise, service, andambience strictly on their own merits. Your business does not exist inisolation. You do not have the first website your customers have ever seen.Yours is not the first tech support call line they've ever called. You have nothired the first receptionist they've ever met.

In particular industries, the standards have already been established in theminds of many customers. You know the names. Every industry has its own IKEA,its own Harley-Davidson, its own Rolex. These companies have established thebaseline for excellence. Every retailer wants its customer service to beconsidered just as good as Zappos'. Harley-Davidson defines what it means to bea motorcycle. Rolex is synonymous with luxury watches.

These organizations are continually creating the world's view of a category.They are shaping the perceptions, images, and memories that create leadingbrands. These are the standards your customers have been exposed to. This iswhat they have in mind when they develop their expectations.

Apple resets...