BMW: far from a comfortable journey
Until recently, I had the same car for nearly 15 years. Before 2000 I’d had almost every “lairy” car known to man – particularly German makes, like Porsche and Mercedes. But following the birth of my eldest daughter, my interest in cars waned as parental responsibilities replaced my automotive desires.
So when the time came to buy a new vehicle late last year, I was somewhat at a loss. A chance discussion at a design conference sealed my decision. I met with one of the designers that worked on the BMW i3, who convinced me to look into buying one. I surprised myself, as I’d never bought into the BMW brand before. I suspect it’s because I was never quite ready for the “ultimate driving machine”.
Nevertheless, I was impressed at the concept of the i3. It’s an electric vehicle, and the fact that it starts to redefine what a “car” is really appealed to me.
With the i3, BMW is offering more than just a vehicle that you pick out on a forecourt and drive away – it’s offering a transportation experience with additional services and features like in-home charging and 24/7 assistance. I’ve already said that I think this is ultimately the way forward for brands – they will eventually offer holistic services in the fields or industries in which they operate. Instead of selling me one component of travel, why couldn't BMW handle all my transportation needs, from providing my credit for the bus and tube to booking flights?
But there are dangers associated with brands applying their skills to new areas, because they’re not always sure what they’re stepping into. In the case of BMW and the i3, an element of the service (specifically the box that charges the vehicle) takes the brand inside the customer’s home – a place it’s never been before.
So, it’s no surprise that this is where the complications started. I was about to endure a protracted process that would last months and ultimately shatter my perceptions of the brand I’d just bought into. The problems began when BMW outsourced the charging box installation process to not one but two separate companies, one of which was a central heating company. Such was the fragmented chain of communications that followed, with no party having any knowledge of what the other was doing, the seemingly simple installation process dragged on for months. There were several laughable moments, the “highlight” being when a technician from one of BMW’s subcontractors drove more than 400 miles merely to survey my home in preparation for the installation (a survey that had already been conducted).
The petrol consumed for this frankly pointless 800-mile round trip was, of course, at odds with the environmental virtues of the car. Once the technician had completed the survey, he offered to install a box for me – but the kicker was he didn’t have a BMW-branded port in his central heating van. By offering me a box from a different automotive company it was clear to me that BMW had lost control over the experience it was trying to offer – and its brand was diluted as a result.
Stretching too far?
Virgin is the example that probably comes to everyone’s mind when they think about a brand diversifying its portfolio. It's a brand I like – I frequently fly with Virgin Atlantic. But the company’s expansion strategy hints at some pitfalls. Beginning life as a record shop in 1970, Richard Branson’s Virgin Group now owns or part owns nearly 100 sub-brands that bear the Virgin name, spanning numerous markets from healthcare services to space travel. But while Virgin’s scattergun approach to new ventures has paid off on the whole, the company has offloaded a number of sub-brands in the past, including Virgin Cars and Virgin Drinks.
It begs the question, is Virgin fundamentally a jack-of-all-trades and master of none? Of the top ten Virgin companies by revenue, only three are profitable – and two are owned by other companies, having been offloaded by Virgin Group (meaning the parent company receives royalty income only). And what about consumer perception of the brand? Are people confused about what Virgin Group offers – and what the brand actually stands for?
Overall, branching out has proved fruitful for Branson – and there are many other successes. Amazon has added cloud services and hardware manufacturing to its repertoire, having made its name selling books online. Apple segued into the music industry (among others) and became the largest music seller in the world with its iTunes service – a departure from its bread-and-butter PC manufacturing business (and later, its smartphone and tablet production arm). But, crucially, iTunes operates as a core element of Apple’s brand and it’s a key service featured in all of the company’s products.
After an arduous saga that included no fewer than three failed installations, I finally had my charging box fitted – but only once I had complained directly to BMW and spoken to the director of one of the subcontractors. Even after it was installed I received errant communications – scheduling “phantom” installation dates and one accusing me of owning two boxes. It was typical of the companies’ inability to communicate with one another. In fact, just this week I received yet another call about the (already completed) installation survey.
When BMW told me that I couldn’t even insure the car with the company's “insurance arm” despite an impeccable driving record, my perception of the brand was nearing rock bottom. The reasons I initially engaged with BMW all those months ago were shattered – and an experience that forced me to engage with multiple non-BMW partners left me feeling divorced from the brand.
The episode reminded me of how important it is that brands ensure the experience they offer is in line with their values at every point in the customer’s journey. Moving into new areas is essential – innovation is the lifeblood of business. But how brands manage these transitions is crucial. And if BMW can work on getting that right, hopefully I won’t have to buy a Tesla next time.
- Customer experience
- Brand expansion