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Failure to Thrive: What Brands Can Learn


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2017 has only just passed its halfway mark but it’s shaping up to be a pretty bad year for businesses in Malaysia as one company after another abruptly shutters up their stores, some leaving their customers in a lurch.

True Fitness, Nature Republic, ChaTime, Tim Ho Wan, Bulgogi Brothers, Tous le Jours and Tora Aman are just some of the companies that have folded up shop so far. Some closures were quite high profile, with ChaTime fighting a legal battle with their Taiwanese parent company, True Fitness criticized for owing customers thousands in unfulfilled services and Tim Ho Wan’s founder hitting the news for blaming Malaysian culture for the chain store’s failure.

There are many, many reasons that could cause a company’s untimely demise. After all, competition is high and the economic climate is unforgiving. Branding may play a very small role indeed when circumstances are simply too unfavorable. However, there are still some lessons a brand can learn from the failure of others to thrive.

Some being:

Awards are not everything.

Awards are certainly a nice way to say “Hey, my product is legitimately awesome” but reputation can only take a brand so far. Dim sum chain Tim Ho Wan enjoys a Michelin star, which proved enough to draw legions to queue up for their food when they first opened. Yet, Malaysia itself enjoys a reputation as a mecca for heavenly food. It’s obvious that more than an award is needed to sustain a nation of foodies’ interest.

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Don’t be arrogant.

Knowing your customers is integral to creating a successful brand and business. That’s why Tim Ho Wan’s founder’s claims that they failed in Malaysia because “Muslims don’t eat pork” was widely panned. This is at best, an arrogant statement that seems to put all the blame on the customers for failing to appreciate their food. Netizens were quick to disagree, citing that the price of the food was too high, the service was bad and even the quality of food was so-so. Branding is not just a story and logo; product, price and customer experience also need to be taken into account.

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Keep your promises.

True Fitness was so sales oriented it failed to take care of the people servicing them – their customers and trainers. Their abrupt closure left thousands of gym members stranded. Some who had paid thousands in gym fees were told that they would be able to transfer their membership to Chi Fitness, but Chi Fitness has now released a statement to say that this is not a done deal. Even employees have not been paid. In this case, a little responsibility and accountability would have gone a long way.

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Move quickly.

Loob Holdings which owns Tealive, formerly known as ChaTime, is the only company that closed and bounced back without a ripple and this could be due in part to the fact that they moved very quickly to tell their version of the story. The CEO Bryan Loo was quick to dominate the mainstream rhetoric, painting a picture of Loob Holdings being the “little guy” in the legal battle with parent company, Taiwan’s La Kaffa. A big and fast rebranding effort also helped (although this was also hit by claims of slogan-stealing). Showing that when faced with a crisis, it’s worthwhile not to delay.

What have you learned from other brands’ failure to thrive?
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