Referral Marketing is More Important with Social Media

Posted by Tom Smith on Fri, Oct, 17, 2014 @ 10:10 AM

referral marketing





I’ve done a lot of work in and around referral marketing both before and after the growth of the Internet and social media.


Referral marketing continues to be the most powerful, effective and cost efficient marketing you can have.


This is particularly true for high-priced products and services and high net-worth individuals.


I’m talking about personal referrals as opposed to providing feedback online to a group of people you don’t know.


However, this is also important since 92% of people trust what they hear from a family member or friend, 75% trust what they hear from a stranger on the Internet, while fewer than 20% trust what they hear from a company.


I don’t think most people like making referrals unless they are asked for a referral by a friend. Then they are pleased to share their positive experience on a particular product, manufacturer, service or service provider.


If asked for a referral, then the person is proud to have been asked and sees it as an opportunity to help their friend by providing information of value.


There are a couple of reasons people are not comfortable making referrals unless asked: 1) they don’t want to seem like they’re a sales person, and 2) referrals are inherently risky.


If the product or service being recommended does not live up to the expectations of the buyer, then the referrer’s credibility is questioned.


Every time a referral is made, there is an implied endorsement also being made.


As such, if you are the recipient of a referral, I suggest you over-deliver so your new customer, and the referrer are both pleased with the outcome.


This also enhances your chances of obtaining additional referrals from both customers.


What also enhances your chances of obtaining referrals is to create “raving fans.” I’m a raving fan of a national quick service restaurant (QSR) chain (Chipotle), a local auto tire and maintenance provider (Atlantic Avenue Tire) and an online book seller (Amazon).


I have personally brought all three businesses at least 100 new customers because these companies have never let me down. They consistently provide excellent service, good value and are ultimately reliable.


Regardless of your business, if you can provide consistently excellent service, product quality and value for your customers, you can build your business with referral marketing.


That is even more true today since your raving fans will tell others about you via their social media channels -- especially if you ask them to, or better yet, provide an outstanding customer experience.


Want to Accelerate Sales? Download the Free e-book  "Customer Bonding Programs:  How to Get, and Keep,Customers for Life"

Tags: loyal customers, customer experience, raving fans, referrals, promoters, referral marketing

6 Ways to Turn Customers into Brand Advocates that Accelerate Sales

Posted by Tom Smith on Mon, Mar, 03, 2014 @ 10:03 AM

empower customers to provide referrals via social media





Here are just six ways to turn loyal, satisfied customers into brand advocates that will help accelerate sales by sharing their positive feelings about you, your products and services with their families, friends and colleagues.

  1. Invest in your customers. Have a customer bonding program that reaches out to your customers on a regular basis to ensure they are happy with the products and services you are providing and to let them know how much you appreciate their business. Failing to follow-up, and stay in touch, with your customers after they buy your product or service essentially tells the customer you only care about making the sale. You don't care about them as individuals. An ongoing, well thought out, customer bonding program will help you have customers for life.

  2. Wow customers with unusual customer experiences. Not everytime, sometime. Find out what you can do to simplify your customer's life and do it. They'll remember you for it and share what you've done with their family, friends and colleagues. Zappos has raised the bar with next day delivery. You should be creative about what you provide customers based on your knowledge of what's important to them.

  3. Provide customers with information about your brand. Loyal customers are interested in your success. Give them a "behind the scenes" look at how things work and how you do what you do.The information you provide will help them generate referrals for you as well as enable them to educate less educated customers. Chipotle recently did this with their Farm Team and is taking a more activist stance with their latest series of "Farmed and Dangerous" videos.

  4. Invite vocal customers to become advocates. You can identify vocal customers by those that provided in-depth answers to open-ended questions in your Net Promoter Score (NPS) or customer satisfaction survey. Their responses give you the opportunity to engage with them more deeply and have a better understanding of what they like, don't like, and how you can improve your service.

  5. Transform negative experiences into positive ones. Listen to the customer's concern. Let them vent. Thank them for bringing the issue to your attention. Fix it to the customer's satisfaction. By doing so, that customer is likely to be with you longer than a customer who never complains. 

  6. Use all social media channels. Find out where your customers are active in social media and strive to be in the same places. Empower your employees to help you engage with customers across all the different channels. Your employees likely know the various social media channels better than you do.


Empower your employees to empower your customers. 


Want to Accelerate Sales? Download the Free e-book  "Customer Bonding Programs:  How to Get, and Keep,Customers for Life"

Tags: loyal customers, dialog, connecting emotionally with customers, customer retention, customer engagement, referrals, social media

2014 Retail Emotional Loyalty and Customer Engagement Leaders

Posted by Tom Smith on Mon, Feb, 17, 2014 @ 10:02 AM

emotional loyalty and customer engagement









The 18th annual 2014 Brand Keys Customer Loyalty Engagement Index (CLEI) has been published by Brand Keys.


The survey looks at emotional engagement expectations relevant to "brand buzz," "shopping experience," and "value for the dollar" as the strongest influences on consumer decision making and engagement with brands.


According to Brand Keys, meeting expectation for the category ideal correlates with brand engagement, purchase loyalty and sales.


Companies that are more emotionally-driven are likely to have higher expectations that grow faster while more rational categories have lower expectations and move more slowly.


This is vastly more complex than Net Promoter Score (NPS) which uses just one question, likelihood to recommend, to measure a company's performance through their customers' eyes. Like CLEI, there's also a strong positive correlation between a company's NPS score and it's financial performance.


Following are the emotional and engagement leaders for the 2014 retail category:

  1. Apparel -- Victoria's Secret = 81%

  2. Athletic Footwear -- Nike = 91%

  3. Department -- Macy's = 80%

  4. Discount -- Walmart = 93%

  5. Home Improvement -- Home Depot = 87%

  6. Natural Foods -- Whole Foods = 90%

  7. Online -- = 93%

  8. Price Clubs -- Sam's = 94%

  9. Sporting Goods -- Dick's = 83%


I find it interesting that Costco is behind Sam's even though Costco's 78% NPS score leads the retail industry.


I am not surprised that Zappos is number four behind since it falls consistently behind it's owner. However, I find Zappos delivers a far surperior customer experience. Zappo's will talk to you as a human being. Amazon will only correspond via automated, or impersonal, email.


Lastly, it is interesting that Trader Joe's is number three behind Whole Foods even though it leads the NPS grocery category with an NPS score of 63%


Granted CLEI and NPS are apples and oranges. It would be interesting to see if the financial performance of the high-performing CLEI companies is equal to or greater than high-performing NPS companies.


Regardless, differentiating your brand on customer service, providing an excellent customer experience (#cx) and delivering on your promise increases customer loyalty and engagement and is a smart business strategy and a great way to keep customers for life.


Want to Accelerate Sales? Download the Free e-book  "Customer Bonding Programs:  How to Get, and Keep,Customers for Life"

Tags: customers for life, loyal customers, loyalty, satisfied customers, customer engagement

Put the Customer First to Accelerate Sales

Posted by Tom Smith on Mon, Feb, 10, 2014 @ 10:02 AM

customer-centric Julep Jane Park













Nice to read how Jane Park, a former Starbucks executive, is putting customers first in her omni-channel collaborative beauty company, Julep, in Fast Company "Minting Julep."

With Julep, Ms. Park is reimagining the entire enterprise of selling beauty products to women, from product design to the transaction experience.

She understands how crucial the happiness of the customer is a every step of the journey.

She communicates her vision on her home page, "We believe beauty is about connection, not competition." It's more important for her, and her employees, to make a real connection with customers.

She has trained her employees (facialists and manicurists) to listen closely to customer reactions to products and experiences and report their findings.

These findings have been used to refine colors, packaging and scents.

Being omni-channel, Park has brick-and-mortar and virtual, online, test labs with about 5,000 participants.

This is a brilliant way to engage customers so they are involved in the product development process as well as provided the opportunity to have a "behind the scenes" look that will enhance their emotional connection to the brand.

Park realizes that testing is also marketing, not unlike using focus groups to create buzz for a new product or line expension among key influencers.

By involving customers in your brand, in product development, with your employees, you are creating multiple opportunities for your customer to make an emotional connection to the brand. The stronger the emotional connection, the stronger the customer relationship with regards to spending, repeat business, referrals and social media sharing.

The success of the process is reinforced by the following quote from a customer, "When you get to see everything that a company puts into its product and how passionate the people are, it really builds a brand loyalty."

What can you do to get your customers more involved with your brand?


Empower Employees to Get Insights Download the Free e-book "How To Get Insights From Analytics" to Accelerate Sales

Tags: loyal customers, customer experience, earn your customers trust, empower employees, consumer insights accelerate sales, connecting emotionally with customers, customer centric

8 Steps to Cultivate Satisfied Customers for Life

Posted by Tom Smith on Fri, Jan, 24, 2014 @ 10:01 AM

Thanks to a HubSpot (#hubspotting)cultivate customers for life webinar on "Cultivating Happy Customers" for the following thought starter.

It's everyone's job to delight customers.

If that's not understood by everyone in your company, you can rest assured that your most important customer will have the opportunity to deal with the person that doesn't understand it (Murphy's Law).

Loyal customers are worth 10 times more than their initial purchase.

In the case of Chipotle, I'm now worth at least 3,000 times more than my initial purchase based on the number of times I've eaten there over the past seven years and the number of people I've introduced to the brand.

Forty-eight percent of customers who have had a bad experience will tell 10 or more people about it. If they're active on social media, think of how many people follow them on Twitter, Facebook, It'll be a lot more than 10 people.

Customer perception of your company is formed by every interaction with your company -- every person they speak with in person and on the phone, every advertisement they see or hear, every social media mention, everything.

You cannot provide awesome service if you don't know who your customers are, what they like, what they don't like, what they define as awesome service.

Most customers aren't loyal to a business, they're loyal to what a business stands for.

I'm loyal to Chipotle because they have food with integrity.

I'm loyal to Atlantic Avenue Tire because they're committed to keeping my vehicle running safely, at a fair price, for the life of the vehicle.

The three pillars of customer delight are: product, communication and education.

The 8 customer delight guidelines are:

  1. Delight employees to delight customers. Loyal employees = loyal customers. Employees will only treat customers as well as their manager treats them.
  2. Educate employees. Ensure everyone in your organization knows that the customer comes first and while the customer may not always be right, they are always the customer. Explain the value of having a "customers for life" philosophy. Recognize and reward employees that provide an outstanding customer experience.
  3. Empower employees. Do you trust your employees?  You should you hired them. Entrust them to engage customers in person, on the phone and via social media. The better the customer gets to know your employees the more likely they are to make an emotional connection to your brand. Your employees are your brand. Trust your employees to solve the customer's problem even if it costs a little more. Nordstrom has built a very successful, and profitable, brand with this philosophy.
  4. Listen to customers. Ensure you, and your employees, understand their needs and wants. Find out what you do well in their eyes and what you can do better. Thank them for their feedback. If they won't tell you something's not right, who will?
  5. Ask customers questions. Who, what, when, where and why? Ask follow-up questions. This will build a trusted relationship between you, your employees and your customers.
  6. Help customers. Educate them. Provide information of value. Anticipate their questions based on questions you've received from other customers. Expect nothing in return. You have to give to get.
  7. Follow-up with customers. I used to produce advertising for Wachovia Bank, before it was bought by First Union, when it was widely recognized for its outstanding customer service. Wachovia had the "sundown rule" whereby the banker was to call the customer by the end of the day with either an answer to their question or a status update on where they were in the process of answering the customer's question. This is one reason Wachovia scored so well in customer satisfaction surveys and why First Union bought them when the First Union brand was in the toilet.
  8. Take action. Measure and track everything. I highly recommend using Net Promoter Score to monitor customer satisfaction over time. It's a great tool to promote a dialog with customers. An eNPS (employee Net Promoter Score) survey is a great way for employees to be educated about the importance of customer satisfaction.
What steps are you, and your company, taking to have satisfied customers for life?
Want to Accelerate Sales? Download the Free e-book  "Customer Bonding Programs:  How to Get, and Keep,Customers for Life"

Tags: customers for life, loyal customers, outstanding customer experience, customer satisfaction, net promoter score, loyal employees

Loyal Employees = Loyal Customers

Posted by Tom Smith on Mon, Jan, 13, 2014 @ 06:01 AM

loyal employees = loyal customers







There's a strong positive correlation between satisfied customers and satisfied employees.

It's easy to get so involved in the tactics, metrics and technology of loyalty programs that the most important part - the human aspect and their emotional connection to the brand - gets neglected.

The CRM technology involved is a marvelous tool - without it, loyalty programs would not be possible.

But we must remember that loyalty, and its opposite, the desire to simply walk away, are both intensely human emotions.

Unless the program generates an emotional connection with the brand, it won't work.

We must also remember that humans aren't as predictable as technology.

Actions that might make one person loyal could well turn off someone else.

It even more complicated -- something that engenders loyalty in someone on one day might do the opposite on another day.

Customers are human, and loyalty is a strong emotional link.

Who is more qualified than customers to tell us what customers want, and what they don't want? That's why it's critical to have an ongoing dialog with your customers.

One thing is certain, building loyalty will not get any easier with the advent of social media.

While advances in technology have made loyalty programs more effective, accurate and appealing to customers, these same advances have made it much easier for customers to switch suppliers.

Comparisons of stock, prices, trading policies, delivery times and costs are now only a click away from customers.

If the item is to be shipped to a customer, do they care from where it comes? No, just that it was delivered for no additional charge. Zappos has set a very high bar.

Many suppliers are equally trustworthy and reputable. Your firm must have some unique property that differentiates you from your competitors.

All other things being equal, a good loyalty program can do that.

A Loyal Employee is More Valuable Than a Loyal Customer

Employees are also human, and they bond emotionally with your customers.

The virtuous circle of "customer - employee - shareholder - customer" has become well-known in loyalty marketing.

These groups go together and if the loyalty or even cooperation of any of the groups is lost, the chain breaks.

To be completely successful, they must all work together, supporting each other, to build strong relationships.

According to Frederick Reichheld, the father of the Net Promoter Score (NPS), "the only way a company can build a loyal customer base is by building committed relationships with the employees responsible for serving those customers."

In fact, "loyalty leader" companies identified by Reichheld out-performed their competitors by a factor of 2.2 in the stock market.

Recent research shows top executives are not only realizing the value of employee loyalty, but actually doing something about it.

It would seem that while there is no shortage of businesses that pay lip service to employee loyalty - even featuring it prominently in their company policy - fewer actually have procedures in place that emanate through the business right down to the bottom and exert a real effect.

The days when management could expect undying loyalty simply because they have employed someone have gone forever.

Add to that the fact that in many cases, it's actually the employees near the bottom of the ladder - those who are often treated most poorly and are underpaid - that have most personal interaction with customers, and it becomes clear there is a problem.

Without loyalty to the business there won't be enthusiasm at the customer-facing level, and that's enough to nullify very expensive marketing programs that are intended to show customers how important they are.

In this time of cost-cutting resulting in employee cutbacks, fewer employees are being asked to do more and more work and, quite understandably, are becoming demoralized and discontented.

It is becoming increasingly difficult for managers to maintain the loyalty of their employees.

And, the level of employee loyalty is influenced by factors other than those within an organization.

For instance, the state of the general job market has a major effect on whether employees change jobs frequently or not. As more jobs open up, the opportunities to defect increase.

So how should top management approach the challenge of increasing the loyalty of employees?

Empower Employees to Get Insights Download the Free e-book "How To Get Insights From Analytics" to Accelerate Sales

Tags: emotional connection to the brand, loyal customers, loyalty, earn your customers trust, empower employees, loyal employees

Cultivating Happy Customers For Life

Posted by Tom Smith on Thu, Nov, 21, 2013 @ 06:11 AM

happy customers for life








Great webinar by Mark Kilens (@markkilens) leader of HubSpot Academy.

It's everyone's job to delight customers.

Loyal customers are worth at least 10 times more their first purchase. In the case of Chipotle, I'm worth 10,000 times.

Forty-eight percent of customers who had a negative experience will tell 10, or more people about it.

Customer perception of your company is based on EVERY interaction with your company.

EVERY email.

EVERY phone call.


EVERY social media exposure.

Everything must be consistent. Consistency builds trust. Trust builds loyalty.

You can't provide awesome service if you don't know who your customers are, what they want or what they value.

Every customer is different. Don't assume you know what they want.

Most customers are not loyal to businesses, they're loyal to what businesses stand for. Chipotle stands for food with integrity. 

Consumers value quality, price, value and results.

A loyal customer will forego a cheaper product or service to do business with you because they have developed an emotional connection with your brand.

There are three pillars of customer delight:

  1. Product -- must be as good or better than anything else currently available.
  2. Communication -- personal, open, honest, transparent and consistent at all times.
  3. Education -- customers want to know about your products, your service, your people, your mission and your values. Let them "see behind the curtain" and involve them in improving your products, services and customer experience.
Here are 8 gudelines that will help you delight your customers and turn them into "raving fans:"
  1. Delight employees -- customers will never love a company until the employees love it first, loyal employees = loyal customers.
  2. Educate employees -- make sure employees know that the customer is always the top priority and to under promise and over deliver.
  3. Empower employees -- let them be themselves, they are the face of your organization.
  4. Listen to your customer -- let them tell you what they're trying to accomplish and then repeat it back to them to ensure you're on the same page.
  5. Ask follow-up questions -- who, what then, why, where and how to fully understand their needs, wants and goals.
  6. Help customers -- educate, businesses that are the best educators will be the most successful; provide solutions.
  7. Follow-up with customers -- ensure all of their problems have been resolved, be easy to do business with, do what you say you'll do when you say you'll do it. Follow-up a couple of days after the interaction to ensure the customer doesn't have any additional questions -- they'll be amazed.
  8. Take action -- measure and track everything and encourage your customers to do the same, use Net Promoter Score to determine the success of your efforts.
Customers do business with those they know, like and trust.
By providing a consistently outstanding customer experience, you will build trust, satisfaction and raving fans.
It's not what you say, but how you make your customers feel that creates a lasting relationship.
People delight people.
You, and your employees, will determine whether or not you have happy customers.
Please let me know if I can assist you in any way.
Want to Accelerate Sales? Download the Free e-book  "Customer Bonding Programs:  How to Get, and Keep,Customers for Life"

Tags: customers for life, loyal customers, trust, customer satisfaction, earn your customers trust, empower employees, connecting emotionally with customers, customer bonding programs, do what you say you'll do when you say you'

5 Ways to Nurture Relationships with Raving Fans

Posted by Tom Smith on Tue, Sep, 10, 2013 @ 06:09 AM

Nurture relationships with raving fans


Thanks to Vocus for the following along with my thoughts on the five suggestions they provide.

Your raving fans are your most valuable customers.

They are invaluable on social media when it comes to spreading positive word of mouth.

Prospective customers trust 90% of what their friends and family say about a brand and 80% of what a stranger says about a brand.  However, they trust less than 30% about what a company says about its brand.

Prospects search social before making a purchase decision to find what people are saying about your company, your products or your services. 

Following are five ways you can nurture relationships with your raving fans to encourage continued positive engagement:

  1. Listen to feedback
    What are your raving fans saying about your brand – positive, negative and everything in between? These are your biggest fans and biggest promoters. Take their invaluable insights into consideration and show your fans that you hear what they’re saying. When people know you’re listening, they’re more likely to talk. The more they talk, the more you and your prospective customers learn. 

  2. Respond in a meaningful way
    When fans engage with your social content, you should be prepared to continue the conversation. Canned responses like “Thanks for the RT” do nothing to further the conversation. Real and authentic responses keep the conversation going and allow you to glean valuable insight from your business’ biggest fans. Raving fans want to develop a more meaningful relationship with your brand -- the people that are your brand.

  3. Recognize loyalty
    Feature raving fans in a blog post or call them out on your social channels. You might even consider giving them access to new products and services before they are available to the general public. These types of activities not only reward brand loyalty but also generate buzz. You already know that your raving fans are positively predisposed to your products. Who better to give you some initial feedback and insights? 

  4. Involve fans in your business process
    Thinking of introducing a new product or service? Invite your raving fans to test your idea and provide feedback. This not only helps you bring a better offering to the marketplace, but also gives your best customers a sense of ownership in the process. It also empowers your raving fans to enhance their credibility among their followers. 

  5. Reward referrals
    Referrals are a powerful tool in new business development. As such, encourage raving fans to spread the good word about your business by offering them incentives to do so, such as discounts or other perks. 

With the amount and diversity of online information available at a user’s fingertips, what people say about your brand on social media becomes an increasingly important means of differentiating your business from the competition. 

The more positive mentions of your products and services by someone other than your brand, the more credibilty your brand will have with prospective customers.

Want to Accelerate Sales? Download the Free e-book  "Customer Bonding Programs:  How to Get, and Keep,Customers for Life"

Tags: dialogue, emotional connection to the brand, loyal customers, connecting emotionally with customers, raving fans

Use Data to Provide an Outstanding Customer Experience

Posted by Tom Smith on Mon, Sep, 09, 2013 @ 06:09 AM

Use data to provide an outstanding customer experience


I was recently booked on a Delta flight from RDU through ATL to Cedar Rapids for an interview.

My flight from RDU to ATL developed some unidentified problem while waiting to take off and had to go back to the gate.  

The pilot could not give us an idea of how long it would take to address the problem but it was clear to me that I would not make my flight from ATL to Cedar Rapids with only 50 minutes to make my connection in ATL if my flight from RDU was on time.

The flight was full.  Passsengers were trying to figure out whether or not to stay on the plane or get off the plane and take a chance on getting another flight, or set of flights, to their ultimate destination.

Fortunately is was in the back of the plane with a window seat, not going anywhere fast, so I called the travel agent that had made my reservation.

They were able to let me know there was a flight from RDU to Minneapolis in 80 minutes and that I could get from Minneapolis to Iowa City a couple of hours later than originally planned. Only one seat was remaining.  Did I want it?  No brainer.  Problem solved.  Got off the plane without stressing about dealing with the madding crowd at the gate.

In hindsight, this shouldn't have been an issue.  I have a Delta app on my iPhone. Why didn't Delta immediately offer me the alternative the travel agent provided with a message to my phone.

Delta knows where I'm going. They know I'm not going to make my flight in ATL. Why not use the data they have about me, and the status of their flights, to provide a proactive solution to the problem and take some pressure off their agents?

Hopefully they're working on it.

Everyone's talking about how you can improve marketing by leveraging big data.

How about improving the customer experience by using the data you already have?

If companies aren't thinking about how to use the data they currently have to improve the customer experience, they're wasting money on big data with the goal of getting more customers.

A satisfied customer will spend more, more frequently and have a greater lifetime value than a non-customer or a non-satisfied customer.

Why not invest more to improve the customer experience to have more satisfied customers?

Do you have any examples of how your firm is using data to provide an outstanding customer experience?

Need More Insights From Your Analytics? Download the Free e-book "How To Get Insights From Analytics" to Accelerate Sales

Tags: loyal customers, outstanding customer experience, earn your customers trust, improve loyalty and retention

Emotional Connection, Not Points = Loyalty

Posted by Tom Smith on Tue, Sep, 03, 2013 @ 06:09 AM

Emotional connection = loyalty


Loyalty programs are ubiquitous. But how effective are they?

If you agree with the premise that every consumer is unique and different, it's difficult for generic loyalty programs to be very effectve with individual customers.

To be truly effective, loyalty programs need to offer something of more value to customers than just another discount.

Customers become conditioned to, and begin to expect, discounts.

Customers are more interested in an exceptional customer experience than a plastic card.

In order for a customer to be loyal to your brand they must have an emotional connection to your brand.

If they have an emotional connection to your brand, they want to see you succeed and they want to help you succeed.

However, to earn the loyalty of a customer, there is reciprocity involved. You must recognize the customer and be loyal to them as well.

Customers want to be recognized and acknowledged. They want to know you appreciate their business.

Not all customers want the same thing. Find out what a customer wants and needs by asking them. Have a dialogue with them.

Do you want to have a "customer for life?" If so, let the customer know that and ask them what it will take for you to continue to provide them with products or services.

Know what the customer wants and deliver it, on a consistent basis. Ocassionally, over deliver. A loyal customer will notice the extra effort and reward you with more business or more loyalty. They'll tell their friends, famliy and business associates about you because they want to see you succeed.

The more dialogues you have, the more positive experiences you, and your employees provide, the greater the emotional connection to your brand will be.

The greater the emotional connection, the greater the revenue, repeat business and lifetime value of the customer.

Every customer is different.  Your job, find out how each customer wants to be treated and treat them that way.

Do this and you'll have customers for life.

What do you do to build an emotional connection with your customers?


Want to Accelerate Sales? Download the Free e-book  "Customer Bonding Programs:  How to Get, and Keep,Customers for Life"

Tags: dialogue, emotional connection to the brand, customers for life, loyal customers, outstanding customer experience, loyalty