Brand-Service-Intelligence

This Equation Shows Why You Are Likely To Pay $1.75 for 4OZ of Ice – And Leave The Store Happy!

12shares12000I went to STARBUCKS the other day because I was thirsty and hungry. I ordered a Chai Latte

I went to STARBUCKS the other day because I was thirsty and hungry. I ordered a Chai Latte tall and gulped it down so fast that I was still thirsty and hungry again. Neither my hunger nor my thirst was quenched. The teal in the 12 Oz cup was over in no time, but 1/3rd of the ice still remained there – gaping at me like a child looking pessimistically at the toy store.

Starbucks-Chai-Latte-Tall.png

I tried to slurp the last drop of chai from the cup. Shortly, I gave up because I realized that there was no more Chai in it. All that was left was ice! So a third of the cup (~4 oz) was essentially ice with an effective cost of $1.75! Do we ever buy ice so expensive? Never!

But this is Starbucks ice. Branded ice!

The moral of this story is simple. If you run an organization, all the toil is until the point your product becomes a brand. Once you are a brand, you can pretty much charge your patrons for the elements – ice, water, air, fire, soil, and then some more in the name of ‘hospitality’.

On the flip side, if you are a customer, you need to stop trusting brands blindly. Their struggle is only until the point where they win your loyalty. If you want real value for your money, choose a brand in the making – something that’s still struggling. Such companies will deliver categorical value for every cent and dollar you spend – and not charge you $1.75 for a cup’s third of wet ice.

There’s a very fine balance between emerging loyalty from consumers and diligent service from brands. Sadly, as the loyalty levels go up, the service levels go south for most brands.

I am not generalizing every brand under the sun. But by and large, it’s the following equation at play:

Consumer Loyalty = 1/Brand Service Diligence

Brand-service-diligence-graph-shade-only

In its graphical form, this seems like a disastrous equation for any industry. We’d imagine that in theory, the industry itself would perish at a certain point in the graph.

To the contrary, things happen pretty seamlessly for the brand in reality. And the customer, who is showing the highest loyalty to the brand, is not even noticing the play behind the curtains.

Why are customers not noticing the foul play?

The answer to this question lies in the comprehension of basic human psychology. We keep judging people to the point where they win our loyalty. Think about making a new friend. If you are any bit an introvert, you are the skeptic at first. You judge every move, every gesture, every word of the other person. Till the time the relationship is formal, you even judge them by their default order at coffee joints (mine is a Chai Latte Tall, by the way)!

But once you become friends, the two of you love each other for what you are. Small faults and glitches are ignored over some coffee and loads of small talk. You do not judge their intent everytime they say something tacky or do something a tad over the top. The friendship stays as long as neither party does something that’s too drastic and unforgivable.

It’s the same game between brands and consumers. All you do is replace ‘friendship’ with ‘loyalty.’ Once you are loyal to a brand, you allow it living space in your comfort zone. For most products/industries, there’s one go-to brand that resides in the comfort zone of the individual buyer.

But the best things happen only when you move outside your comfort zone – do things you’re a little less ready to do. 

It is this promise that motivates up and coming brands to try and win your loyalty. As long as this motivation is there for newer players in the industry, innovation will continue to exist. And the natural law of competition shall make sure that you – the consumer – is always on the winning side. That is, as long as you are willing to give innovation a chance.

With the big brands, it is often the other way round. Back to the Starbucks example again. You do not expect an average Starbucks visitor to be full of thirst and hunger. Even for me, it was the first time when I went to Starbucks with such intense appetite.

I give it to Starbucks that they are consistent with the 4OZ of ice in every cup of Chai Latte Tall. And we are mostly ignorant (and even happy) about that. It was only when I was in an extreme state of need that I realized how terribly insufficient the volume of flavored liquid in the glass is. Honestly, it was plain happenstance but the revelation was totally startling.

The true value of a service can only be judged by how they treat you at your hour of extreme need.

In a wide selection of industries, most brands are so consistent with their dishonesty that you do not realize until they send you a major letdown. That’s why it is especially relevant that we, as consumers do not take any service for granted – and in turn not allow them to take us for granted. I have absolutely no qualms in stating this upfront from my position as the architect and founder of a tech startup.

At Onata, we place the priority of our customers atop all other preferences. So when we came out with our goal of connected neighborhoods (through Onata Neighborhood Services) wherein every neighbor could help one another, we made one important decision – at no point will we offer the services ourselves. That cuts short any chance of selling wet ice for a couple of bucks. You get serviced for every $1.75 that you spend through the app. It is ultimately YOUR Trusted Neighbors that drive value to the Onata ecosystem. This is where and how we are different from the existing band of ‘apps’ in the service industry. They find you the pros, we rebuild the service ecosystem around you!

The love of creating something new will keep bringing to consumers products and services that they never thought could be possible. For new businesses to survive and hopefully make it big, it is important that such love is reciprocated with, first the opportunity, and then the loyalty of consumers.

P.S: This article does not in any way mean to target Starbucks individually for the high ice quotient in their soft drinks. In the interest of fair play, here is a Green Apple flavored Iced Tea from McCafe by McDonald’s. Note that since the drink is named ‘Iced Tea’, they doubled down on the volume, too!

McDonalds-Iced-Tea

A version of this post first appeared on Futran Solutions.

Krishna Vemuri is the founder of Onata – Universe of Services. You can connect with Krishna on LinkedIn.

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