On a recent visit to a venture capitalist friend of mine I learned that the target for new investments these days is “the application of technology.” After spending 25 years in Silicon Valley, I assumed he was chasing another software rainbow like ERP or SA or CRM or ILM. No, he did not mean software. Nor was he referring to on-line applications. Not even data services. He meant good, old-fashioned service companies that make use of these technologies to provide better service to more people. Who’da thunk?

We all know the stories of Fed-Ex, Nordstrom, the Four Seasons, e-Bay, Google and Amazon. These companies used logistics software, data mining techniques and internet interfaces to create new businesses that in turn served new markets. These guys took a technology concept, applied it to a service idea and then did the hard work of execution. Their stories have become legend.

But there are countless small and medium-size service firms taking advantage of technology to build businesses, amass markets and establish brands too. These and their fortune 500 brethren are the companies of the service economy. Their ability to back up a service people want to use with innovative technology is their currency. The pot of gold at the end of the rainbow.

But building a successful service business depends on so much more than simply making use of technology to provide a service. The experience of receiving the service itself is at the very core of the successful service company. And, of course, the ability to create the appropriate experience is crucial. For without this, you have a restaurant with bad food, a theme park with boring rides, an overnight delivery service with late deliveries, a phone company with dropped calls and a law firm that doesn’t win cases.

Services these days are comprised of two major components. The first is the technology enabling the service and second is the people who deliver it. Both of these must be in full working order. When they are, it is then possible to build a service brand.

A service brand is very different from a product brand and a bit more difficult to build because it is an intangible asset. The service is actually an experience, which of course includes the experience of finding the service, buying the service, receiving the service and paying for the service. And making it even more difficult, services don’t have packaging to help reinforce brand messages.

How do you achieve this? How do you make every customer touch point a positive one that reinforces the brand ideal? How do you train hundreds of people to express it? How do you build an environment that itself reflects the brand?

There are essentially four pillars required to build a successful service brand. They are: A well understood brand ideal or what I call getting to aha! If you don’t know where you’re going, no path will get you there. This is the “handle” or the positioning of your brand. The verbal expression of what you want and can become. Yet it isn’t necessarily a tagline. For example, McDonald’s has adopted a new brand ideal in recent years. The company is going for the “healthy fast food” market. The new tagline is “I’m lovin’ it.” The handle expresses the brand ideal and the tagline commercializes it. The process of getting to aha! is one of understanding what you want to be, what your core competency is and what the market for that competency is like. Then you can begin to mold and shape all three of these elements until you get to aha! When your brain says “aha!” you’re there.

Secondly, you need to create a culture that reinforces that ideal. There is nothing more important in building a service brand than building a culture where the employees (and the customers) are empowered to defend the brand. Service brands belong to the people delivering the service. If they don’t defend their ground at every intersection, the brand will take the path of least resistance and become something other than what its inventors intended. A highly functioning service brand culture squeezes out misfits on its own which helps to reinforce the culture building an even stronger brand.

Third, flawless execution is at the core of every successful brand. A service brand is the expression of the service at every customer touch point. And the key to creating an awesome service brand is the relentless pursuit of consistency in that expression. That means every single time a customer interacts with the service company in any way, the experience must be consistent with the brand ideal, or the intent of the service. If a theme park is to be “The Happiest Place on Earth,” then each and every time
a customer interacts with any part of that theme park, the “happiest place on Earth” message must be reinforced. That means vendors must smile, bathrooms must be clean, food must be frivolous, characters friendly, rides thrilling, people laughing and fun should be within arm’s length at all times. Each touch point is an opportunity to communicate the brand ideal to your customer. Every missed opportunity is a brand failure waiting to happen.

And finally, brand communication helps you get your brand messages out to your customers when they least expect it. Certainly advertising and PR play a role here, but great brand communication is a conversation. Great brand communicators have figured out how to make their brands part of a conversation within a community. It is interactive. It’s the process of making evangelists out of your customers. (See previous blog.)

Ultimately, a great service brand is about creating a great experience for your customers. Again and again and again and again. Building a service brand isn’t for everyone. But these days, if you’ve got a small or mid-size service business and you’re looking for the pot of gold at the end of the rainbow, think about building that brand. There’s no better way to increase your valuation. Just check out Starbucks, Google, Amazon, Netflix, Fed Ex, eBay, Four Seasons, Nordstrom, Whole Foods, iTunes, Sprint, Southwest Airlines, etc., etc., etc. And they said it couldn’t be done…