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The embarrassing failure of the launch of online loyalty
award scheme 'Nectar' is a timely reminder of the vulnerability of a
company's branding to the vagaries of the quality of their IT systems
(see: Real World Risks). Steve Adams of brand
consultancy Dragon
claims "It is more of an issue with Nectar however (e.g. compared
with Egg's launch problems) as it is replacing existing loyalty schemes.
The poor press about customer dissatisfaction has compounded the
problem".
Details of the full costs of the Nectar
launch in terms of wasted marketing resources and lost opportunities
have not been released, however, it is known that 'Barclaycard', one of
the 4 sponsors of the scheme, was to spend a 6
figure sum advertising the launch. The total costs could be quite
significant, certainly many times more than the cost of ensuring that a
technical solution of proven quality was in place.
The embarrassment of large corporations due to IT
failures and the subsequent damage to branding is well known, bankruptcy
is less common. The book 'Boo
Hoo: A Dot Com story' by Ernst Malmsten documents the rise and fall
of Boo.Com and reminds us of a well known fatality. It appears that it
was not just the high (maybe even extravagant!) burn rate alone that
made the backers pullout, it was the failure of the technology to
deliver a service.
Brand failure scuppered Boo.Com long before the funding
ran out. Other well known examples of brand damage due to technical
frailty include; 'Victoria's
Secret's' webcast in Feb 2001 - 1.5 million users left in the cold,
'Firestone'
tyre recall in August 2000 - causes near site collapse, 'Britannica
Encyclopaedia' site re-launch - 10 million users denied access, and
the many reports of security
compromised e-banks.
IT quality control is not a dark art or a complete
mystery, there are tried and trusted procedures and methodologies to
ensure the risks of Information Technology can be minimised. Quality
does not come of it's own accord, it takes work and it takes resources.
The question is not whether a company can afford it, but whether a
company's branding can afford to be without it…
Sources:
Wired
news - BooHoo Review
Revolution
Magazine - Analysis
Revolution
Magazine - 6 figure launch
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