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One of my favorite concepts is the idea of brand deposits, more commonly referred to as brand equity. Brand deposits is a phrase from Steve Jobs. Here is an explanation from the book Insanely Simple: The Obsession That Drives Apple’s Success.
“He [Jobs] believed that a company’s brand works like a bank account. When the company does good things, such as launch a hit product or a great campaign, it makes deposits in the brand bank. When a company experiences setbacks, like an embarrassing mouse or an overpriced computer, it’s making a withdrawal. When there’s a healthy balance in the brand bank, customers are more willing to ride out the tough times. With a low balance, they might be more tempted to cut and run.” Cult of Mac
I was thinking about brand deposits the other day after having a poor experience at Starbucks. Now, I generally don’t call out specific companies on this blog, but in this case, my overall point is positive.
In the end, I am a Starbucks fan and patronize them almost daily.
A Clean, Well-Amplified Place
Last Sunday, my wife and I had planned a working Starbucks excursion. We were behind on some key projects and wanted to go sit somewhere out of the house and knock out a few important items that had been getting pushed down the To Do list. We figured a nice, quiet coffee shop would do the trick.
We know the various Starbucks locations in our area and which ones are well managed. It was at the store in my area that is probably the least well managed that we had an experience that demonstrates the importance of brand deposits.
Since it was on the way to another errand, we went to our least favorite of the area Starbucks. We were able to find a table near a power outlet (always a hot commodity at any Starbucks), but that was where the positive experience ended.
The table was sticky and unclean. The Barista working the register was seemingly indifferent to my wife and the other patrons in line. And to top it all off, the music was blaring! And, I mean AC/DC blaring.
The music was loud enough that I got up and walked around the store to see if there was another table more strategically placed. There was not.
I have experienced loud music at Starbucks before (insert old man joke here), but never like this. My wife and I could not even have a conversation, and since that was the purpose of our visit, it sort of put a wrinkle in the experience.
Eventually, I got up and very nicely asked the Barista if she could turn down the music, telling her that we could hardly hear each other. It’s hard to describe the tone of adolescent condescension with which the Barista replied, “when I can,” but it was pretty obnoxious.
The short end to the story: After 15 more minutes or so of unchanged volume, we left. The community coffee shop experience Starbucks tries so hard to create was ruined that day by a poor employee. As Starbucks experiences go, it was a pretty bad one.
How Brand Deposits Are Like Customer Insurance
Here’s the beauty of brand deposits. Despite that experience, the very next day I was sitting at my desk drinking my morning Starbucks.
You see, after over a decade of patronizing Starbucks, the company had built up a lot of brand deposits with me. I have received great service and great products. I have used their locations as culturally acceptable locations for key business meetings. I have even written quite a few blog posts at those rounded, wooden tables.
That is the essence of customer loyalty.
Sure, I’ve had bad experiences. I’ve tasted my coffee after driving away, and it was wrong. I’ve had a new Barista so logjam the morning rush that I’ve been late to a meeting because of it. And I’ve had the staff talking extremely loudly with each other while I tried to enjoy a quiet coffee.
However, over the years Starbucks has delivered great value, both in product and services. They have made brand deposits day after day, from the smiling, friendly Baristas to the clean, well-lit (and usually quiet) environment.
Of course, I’ve probably been to hundreds of Starbucks locations, and my transactions, without question, number in the thousands. The brand deposits created by Starbucks in those encounters are money in the bank for Starbucks, both literally and figuratively.
What if my experience on Sunday had been my first experience at Starbucks? What if the alternative music concert and the snarky 17 year old had been my introduction to the Starbucks brand? It would have been quite awhile before I ever walked into another one, and I probably would have only given them a second chance because they are everywhere.
If that had been my introduction to a local business, I doubt I would have ever gone back.
The brand deposits Starbucks has built up along the way by giving great experiences had accrued a positive balance in the metaphorical account. When the bad experience made a withdrawal, there were still plenty of funds left over, and I was drinking a Starbucks drink the very next day.
That is the power of brand deposits.
For more on the power of brand deposits, please check out our upcoming FREE eBook 7 Secret Customer Service Techniques Every Expert Knows! The 7 Secrets is scheduled for release on September 24 to subscribers of our email newsletter, The Customer Conversation. You can subscribe using this link. You will get some other goodies when you sign up, and we will never SPAM you — ever.