Contract Quality vs Brand Quality | Customers, Etc.
Do you ever work so intensely at something that you start dreaming about it?1 I wonder what lawyers dream about. Like, imagine you’re a lawyer and you have plans to go to the Apple store over the weekend to buy a new iPhone, but you’ve been working on contracts all week and that’s really messing with your sleep.
You wake up on Saturday morning to head to the Apple store and the company bus swings by to pick you up. You don’t remember the company having a bus, but it’s well-appointed and there’s seating for a dozen people, which is good because your team of lawyers is with you. They weren’t at your house when you woke up. They were already on the bus when it arrived.
When you walk into the Apple store, you start looking at the iPhones. There are a variety of options. All phones have the same operating system and a touch screen. They come in different sizes. One of them has three cameras on the back, which is weird, you think, maybe you’re dreaming.
You get an Apple employee’s attention and indicate which phone you would like to purchase. They invite you into the back to begin negotiations.
The negotiating room is something to behold. This is Apple, after all. An Apple employee puts on a pair of white gloves and gently removes the iPhone from the box, placing it on an acrylic display stand in the middle of the conference table. There’s lighting built into the display (how do they do that?) and the product really stands out. You start questioning if you should even be negotiating terms with a company like Apple.
Apple’s legal team walks in.
“I’d like to talk about device uptime,” you start, nodding to the head of your legal team, who passes you the documents you had prepared to read. “We need at least 4 nines2 of uptime in any given month. Uptime below 4 nines will automatically initiate a 1% refund of the purchase price, below 3 nines a 5% refund, below 2 nines the option to terminate coupled with a full refund.”
The Apple lawyers just sit there. You can’t really tell if they’re trying to respond or just ignoring you. You think you see someone’s lips moving, but you’re not sure. Maybe they only want to do a pro rata refund. You’d push back on that.
“Let’s talk about issue resolution,” you continue, “If we have issues with the device, we need to be able to rely on prompt resolution. High severity issues will receive a response within 30 minutes, full resolution within two hours, all other severity issues will receive a response within 4 hours, full resolution within 2 business days.”
The Apple lawyers are again unresponsive. Did they even hear you or is this just a negotiating tactic? You hear a loud hum from outside the room. You raise your voice, “Where do we stand on these issues?” Nobody responds. The hum gets louder.
In an instant, the room fades and you reach across your nightstand to turn off the alarm coming from your iPhone.
Brand quality
Yes, the dream is absurd, but that’s sort of the point, right? You don’t buy an iPhone because you’ve pored over the contract and everything looks perfect. You buy an iPhone because you’ve used Apple products before and like what they make, or a friend recommends them3, or you find the product’s design beautiful and appealing. All of these aspects are a reflection of Apples brand.
Brand quality is what we were touching on last week when we were talking about hard-to-measure quality. In the context of customer support, I wrote:
Your customers won’t notice the work you do behind the scenes, but they will notice its outcomes. Customers can tell the difference between a quick-but-not-so-helpful response and a response where the support team really took time to listen and understand their problem.
Spending time on the harder-to-measure aspects of quality can help to improve your team’s reputation. In business, we call this your brand.
Brand quality is what might guide you to implicitly trust the brand, perhaps not even paying too much attention to the contract terms.
Contract quality
Two weeks ago, when we were discussing service level indicators (SLIs), objectives (SLOs), and agreements (SLAs), we were talking about “contract quality”. I’m calling it contract quality because it’s the type of quality that can be easily—more or less—baked into a contract. Especially in the business-to-business (B2B) space, where organizations and relationships are complex, businesses need to offset risk by ensuring contracts provide favorable terms for the relationship. This can mean things like 99.99% uptime or 4 hour service escalation response time.
Brand quality vs contract quality
Which is more important? Brand quality or contract quality?
When you’re running a customer support team, you might take particular pride that your team provides incredibly helpful and clear answers. Perhaps you’ve even had customers tell you that your support is miles ahead of the competition. This is good to hear. It feels good.
But what do you do if you’re selling to a large enterprise and they ask for a 30 minute 24/7 response time? You might think to yourself, “sure, I can stand up an international team that can provide mediocre responses any hour of the day, but who wants that? Don’t people really want thoughtful, clear, and empathetic support, even if they have to wait until Monday for a response?”
Herein lies the conundrum. At the negotiating table, the only thing you can discuss is contract quality. If the prospective customer asks for a 30 minute response time and 24/7 support, you can’t really say, “how about 4 hour 9-5 Monday through Friday support, but the support you get is going to be awesome.” How would you even go about measuring “awesome” and including that in the contract? So the lawyers end up negotiating about the only thing they can negotiate about, which is contract quality4. Brand quality gets left out.
Which “quality” should you focus on?
I don’t know that there’s a universal answer here. If your customers care more about contract quality and don’t really care about brand quality, you’re probably going to be focusing on the type of improvements you can make that are easier to measure. On the other hand, if your customers value the high level of care they receive from the relationship, you may end up focusing on the aspects of quality that are harder to measure.
Another way to think about it is what type of feedback loop you’re working in. I’ve talked about feedback loops a lot in recent months, and it’s helpful here as well.
Contract quality is going to exist mostly in a balancing feedback loop. You’re going to want to expend the minimum amount of resources to meet an expected level of service. If you put in too many resources, you’re wasting money.
Brand quality exists as part of a larger reinforcing feedback loop. If customers value the harder-to-measure aspects of the service you deliver, they’re going to be more likely to recommend your product and service to others. This in turn will invite more customers to do business with you, who will then have an opportunity to appreciate the remarkable service you deliver, who will then tell their friends, etc., etc.
It’s worth noting that brand quality is hard to create in a silo within a company. You can provide outstanding customer support, but if the product has an awful user experience, customers are going to leave. In order for brand quality to really be successful as part of a reinforcing feedback loop that brings in more customers, it has to be a whole-company effort5.
It’s not always an either-or situation, of course. If you aim to provide 10 minute response times to customers—even if you don’t include that number in customer contracts as an SLA—you still might get responses from customers saying, “Wow, I never expected a response so quickly.” Even though that metric is easy to measure, that’s a positive reflection of your company’s brand.
Again, I can’t tell you which type of quality—“brand” or “contract”—is going to be best for your business. There are probably opportunities to improve quality that touch on a little bit of both. My bias is to lean into the harder-to-measure aspects of brand quality which are going to generate positive reinforcing feedback loops for customers and for the business.
I would always have the weirdest dreams after coding in JavaScript.
99.99%
“a friend recommends them” is the foundation of Net Promoter Score (NPS), which provides a quantitative way to measure the effectiveness of a brand, which is traditionally hard to measure. Fair warning that NPS can be gamed and is often abused, but still, if you’re looking for a way to measure brand, NPS is a known entity.
I can sort of see it from the prospective customer’s lawyers’ point of view. Let’s say the customer loves the brand and product of the vendor and is excited to purchase. Maybe the champion is even a bit nervous about “going through legal.” The legal team doesn’t care about the brand. They can’t care about the brand. It’s their job to win as favorable terms as possible within the contract. This will include contract quality, but it won’t speak to brand quality.
If the vendor does a good job and provides an amazing experience to the customer, the customer will never look at the contract. Nobody will even mention it. They’ll gladly expand when it’s time to renew. But if for some reason the relationship sours, the contract protects the customer and provides the customer a way out. Put another way, if brand quality ends up diminishing or not being present, contract quality gives the customer some protection.
Some of my posts from earlier in the year, like this one creating a simple customer journey map, touch on this. The entire point of a Chief Customer Officer is to get the entire business to stop thinking about operating in silos and instead think about operating in lockstep in service of the customer. That’s what creates a brand.