The value of a brand

Kiwiblog links to an interesting story about Vodaphone Vodafone (fixed for my illiteracy). In the story Vodafone begun charging for sending out paper statements after setting up a text statement service. Sure enough customers were unhappy – so they reversed the decision and now are not charging for the statements again.

What was important for me wasn’t what they are doing – but how they are doing it. They termed the change their mistake and that they were now listening to what their customers told them. Whoever decided to make this u-turn obviously knows what happened with New Coke.

In the case of New Coke, the Coke company replaced Coke with a new receipe – but some deeply loyal customers were hurt. When Coke turned around and stated that it made a mistake and changed the formula back they experienced an increase in market share (beyond initial levels) – and customers said they felt “flattered” that Coke actually listened to them.

Who knows, Vodafone might experience the same thing here! It just goes to show, building a differentiated brand both lets the company extract rents and allows customers the “value” associated with having a role in the brand. Sounds good to me!

  • CPW

    Didn’t they switch to New Coke because they listened to customers (via focus groups) who said they liked New Coke better?

    This was just bad framing. Should have just raised everyone’s fees by $1, then offered a $1 discount for opting out of getting a paper statement.

  • should be vodafone… learn to speel (that’s a joke).

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  • insider

    Weird thing is some companies find it almost impossible to genuinely say sorry we were wrong, despite its proven healing power. Mostly I suspect it is driven by ego and lawyers.

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  • It’s not you that’s illiterate here. Vodafone chose a stupid spelling — probably for marketing reasons, there’s a phd in this somewhere — so it should expect people to have difficulty.

  • “Didn’t they switch to New Coke because they listened to customers (via focus groups) who said they liked New Coke better?”

    Yes – but supposedly they should have realised some peoples emotional attachment to Coke (in the South).

    “This was just bad framing. Should have just raised everyone’s fees by $1, then offered a $1 discount for opting out of getting a paper statement.”

    Agreed. But given their fail I think they pulled out of it quite well.

  • “should be vodafone… learn to speel (that’s a joke).”

    All good – fixed 😛

    “Weird thing is some companies find it almost impossible to genuinely say sorry we were wrong, despite its proven healing power. Mostly I suspect it is driven by ego and lawyers.”

    Well I guess it isn’t all about profit maximisation 😉

    “It’s not you that’s illiterate here. Vodafone chose a stupid spelling — probably for marketing reasons”

    I think it is partially my illiteracy 😛