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Customer experience lessons from Red Bull

Here are four ways the energy drink brand uses unconventional thinking to stand apart from its competition.

Customer experience lessons from Red Bull


Today's marketplace is increasingly competitive, and in a still-tight market, smart companies understand that it really comes down to the details when differentiating a product. Having superior merchandise or being first to market? Fantastic. But your competition is lurking right around the corner. Competing merely on price? That works too, especially if a Chinese factory and high-volume are key components of your business plan. Otherwise ...

And then there's service. Your customer service offerings can help you stand out after other companies have followed suit and re-produced what you've painstakingly developed, and your customer service will take you far after yet another competitor has lowered their prices. In short, the customer experience matters more than your product.

Take Red Bull. They know a thing or two about the customer experience.

Defiant, edgy and outside of the box

Bloomberg Businessweek published an article in May of this year titled "The Mastermind of Adrenaline Marketing." The title refers, of course, to Red Bull's fearless leader, Dietrich Mateschitz, the Austrian who singlehandedly invented and continues to dominate the energy drink category. Curiously, Mateschitz's business model doesn't fit neatly into the product, price or service categories—yet Red Bull plows forward with enviable growth.

So what is Red Bull doing, and what lessons can we all learn from Red Bull's business model? First, let's clearly define the standard business strategies that the majority of companies focus on: product, price and service.

  • Product:Companies that focus on succeeding based on product alone will attempt to be the first-to-market, spend a sizeable budget on R & D, or invest heavily in technology. It can certainly work, but it's expensive and a company has to work on continuously staying ahead.
  • Price:Basing your business model solely on being the better deal is a tricky game. In a competitive field, companies engage in fierce battles to drive down prices, outsource and increase volume to offset decreased profit margins. However, a lower price is a tantalizing option for most consumers.
  • Service:And then there's customer service. How good is your customer service? Customer service is special—you can teach it, happy customers will be ambassadors for your brand, and you can upsell or cross-sell your other products once you establish a relationship with your customers.

The Red Bull example

Product:Red Bull entered the picture in 1984 and started to gain momentum by 1987. First-to-market? Check. The "energy drink" category had not yet been defined prior to Mateschitz's re-purposing of a Thai concoction.

Yet in the "product"' category, what stands out about Mateschitz's beverage is that it really doesn't taste very good. Taste, apparently, isn't all there is when it comes to promoting a sugary beverage.

And, true to form, the copycats quickly followed. The energy drink industry is now a $10 billion dollar market in the U.S.

Red Bull, clearly, needed to move beyond product as their point of differentiation.

Price: When Red Bull began selling in the late 1980s, Mateschitz decided people would be more enticed if it was positioned as an ultra-premium product. So he doubled the price—selling it at $2.00, when all other carbonated drinks were selling for $1.00. And as we all know, it worked. His not-very-tasty, expensive beverage flew off the shelves.

Service: The category that Red Bull plays in—ready-to-drink beverages—doesn't quite fit in the customer service model that matters when selling a B2B product, service or B2C product that doesn't come in the refrigerated section of a store. Red Bull no doubt has a smart distribution strategy, but for the sake of this exercise, let's look at other components of service—the user experience.

A charming aspect of great service is that it puts a nice polish on your brand. When customers have a positive customer experience, they're likely to tell their friends and become a returning customer.

Red Bull has mastered the customer experience by becoming the face of extreme sports and associating its properties with "adventure" and pushing the limits. Red Bull is not so much an energy beverage as it is an aspirational brand.

Red Bull's not-so-traditional approach

Much of Red Bull's success comes from Mateschitz's out-of-the-box thinking. Here are a few lessons we could all use.

Believe in your product. Mateschitz frequently quotes this line: "It is a must to believe in one's product. If this were just a marketing gimmick, it would never work."

Do you believe in your product—really believe in your product? Red Bull, Mateschitz freely admits, is not so much a product as it is a philosophy. You have the ability to sell more than a tangible product—you can sell associations and a lifestyle when you place some credence in what you're selling.

Sell your idea, not just the product.Once you've defined the philosophy for your product, you then have the task of selling the idea. Red Bull doesn't sponsor basketball or football stars—for a reason. They sponsor BASE jumpers, Formula 1 teams, windsurfers, pro-snowboarders and motocross champs (to name a few). Who you align your product with matters.

Know your target audience. Red Bull isn't targeting soccer moms. Red Bull is targeting athletes and the youth who are drawn to extreme sports. Their top-level aspirational target—extreme athletes—has a nice way of trickling down to the everyday man who wants to identify with Red Bull's image. Long-haul truckers or college kids who want to pull an all-nighter? Target audience.

Take the risk with un-traditional marketing.If you ask most people where they've seen Red Bull's brand, their answer will not be a Super Bowl commercial. Instead, they will have likely seen the Red Bull brand on Shaun White's secret snowboarding practice half-pipe that Red Bull built and leaked to YouTube. And Red Bull's latest venture? Media. Red Bull will now be launching 1.2 million glossies and iPad apps that promote the Red Bull lifestyle.

There's a lot of clutter these days in traditional marketing channels. It pays to think outside-the-box.

Your advantage over Red Bull: The customer experience

For those of us selling products or services that don't lend themselves well to extreme sports or having our own fleet of performing vintage aircraft, we can still take many of Red Bull's lessons and pluck one of the best tools from the product, price, service toolbox.

Service.

When you focus on service and customer care, you will stand out in a marketplace replete with similar products at competitive prices. People will remember how they were treated by your customer service representatives, and in an increasingly impersonal technological world, you can build a brand around your customer service personality.

Peggy Carlaw is the founder of Impact Learning Systems. She is also the author of three books published by McGraw-Hill includingManaging and Motivating Contact Center Employees. (Photo by Foxymoron.)



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