All projects: Gel, Jobs, Gootodo, Games, Uncle Mark, Goovite, Blog, Bit Literacy
Putting Customers First... Pepsi?
I'm not a fan of carbonated sugar water, but a recent Business Week article [1] got me thinking about Pepsi. In particular, how does a soft drink company create and improve its customer experience? After all, there's not much to play with: the taste comes from a secret formula that can't change, the bottle pours the liquid with no problems, and the label is already determined by corporate design guidelines.
In other words, the product - carbonated sugar water encased in plastic - can't change much in the tangible experience it delivers.
Certainly there are ways for the company to increase sales: run a promotion or sweepstakes with prizes printed on the bottle caps, or just invest more in old-fashioned advertising. Those might improve business metrics, but they don't improve the customer experience of the product; they aren't particularly customer-centered.
How, then, is a company like that supposed to enjoy the benefits of customer experience management?
Here's one way to do it:
Put customers first in corporate strategy.
Business Week reports that Pepsi is "defining its mission as serving the customer rather than protecting its venerable brands" of Pepsi and Frito-Lay.
"Protecting venerable brands" refers to a time-honored practice within major packaged goods companies, global corporations, and even (yes) many Internet-based businesses. The strategy is to preserve the brand, while leading customers every step along the way. Ad impressions (ad infinitum, ad nauseum) have to lead customers, sheep-like, to buy the product. Likewise, if the company makes any changes to the product, customers must be taught to accept and desire those changes. Any new product launches must be sure not to threaten the sales of the core brands.
The traditional strategy of "protecting" a brand is thus heavily company-centered, and mostly uninterested in improving the customer's experience.
Pepsi, according to the Business Week article, has engaged in a different strategy. Instead of telling customers what they want, they have become "more obsessed with understanding and catering to changing tastes than in trying to shape them." Far from protecting brands, Pepsi is LETTING THE CUSTOMERS LEAD the strategy, based on the customer experience they want.
One telling anecdote centers on snacks from Pepsi's Sabritas brands. Marketing these products could have threatened core Frito-Lay brands, but Pepsi's research showed that Hispanic customers preferred the Sabritas brands. The article reports: "Despite no advertising and minimal distribution, U.S. sales of Sabritas brands are expected to exceed $100 million this year -- double what they generated in 2002." Not bad.
Better still, the core brands have survived, and the company is thriving. Business Week reports that Pepsi is enjoying consistent double-digit growth. While I'm not a nosher of Frito-Lay or Pepsi myself, I have to admire the customer-centered strategy, and the business results it created.
[1] "Pepsi's Thousand And One Noshes," Business Week, June 14, 2004. Online for Business Week subscribers only.
This is a bit of a tangent from the subject at hand, but related.
I've always been amazed by the way that soda cans work in America. We live in a society obsessed with cleanliness, hygiene, overpackaging etc etc. Yet what's the first thing that we do when we open a can of soda? We take the hostile, germ-infested world, and actually DIP IT into the stuff we're about to ingest!
Think about it. That aluminum tab, in contact with who knows what - rat droppings? ozone? truck-driver spit? - goes straight into the can! How is this possible? How can they get away with it?!
So if Pepsi wants to address a REAL issue, maybe they'll take a look at this one. (Okay so it's not a real issue, but hey - how easy would it be to spin into one?)
Not only that, but then we put our lips to the lid - where the little groove on the circumference can collect all sorts of particulate nastiness...