Impact Learning Systems

GET TO THE HEART OF CUSTOMER EXPERIENCE

The Experience is the Brand (Part 2) Malcolm Carlaw

How many refer­rals have you been get­ting lately? Refer­rals are a good indi­ca­tor that your cus­tomer is hav­ing a very good or excel­lent expe­ri­ence. There's good research indi­cat­ing that invest­ing in your cus­tomers expe­ri­ence is worth the effort. So what should you do?

One of the delight­ful moments that occur in our office is when a cus­tomer refers us to a prospect. It's delight­ful because it makes every­one feel good about their con­tri­bu­tion to that customer's expe­ri­ence. The sales­per­son feels val­i­dated in build­ing a strong cus­tomer rela­tion­ship; devel­op­ment feels jus­ti­fied in tak­ing the time to pro­duce an excel­lent prod­uct; the imple­men­ta­tion team is proud of achiev­ing or exceed­ing the client's expec­ta­tions; and the sup­port team is qui­etly con­fi­dent in the knowl­edge that none of it would have hap­pened with­out their help.

Refer­rals are a good indi­ca­tor that the cus­tomer has had a good expe­ri­ence. In a Strativity's 2009 Cus­tomer Expe­ri­ence Bench­mark Study they found a direct rela­tion­ship between a company's invest­ment in cus­tomer expe­ri­ence and the num­ber of refer­rals the com­pany received.

The more com­mit­ted the com­pany to the customer's expe­ri­ence, the more referrals.

While refer­rals are not a guar­an­tee, slightly over half (51.4%) of com­pa­nies that invested heav­ily in their cus­tomers expe­ri­ence refer­ral rates of 10% or more.

It seems a self evi­dent relationship between cusomer experience and customer referrals1 The Experience is the Brand (Part 2)ques­tion, but why do com­pa­nies invest in the whole cus­tomer rela­tion­ship thing? Well, in short, refer­rals are about ten times more effec­tive than other mar­ket­ing tools and are a lot less expen­sive. In the Stra­tiv­ity study, they found that cus­tomers were less likely to leave than those who had a so-so expe­ri­ence. See The Road to Cus­tomer Loy­alty for more dis­cus­sion on what dri­ves loyalty.

How­ever, get­ting refer­rals is not as easy as just spend­ing money. In a business-to-business set­ting there are a vari­ety of fac­tors that come into play. The customers:

  • Trust of the sales person
  • Sat­is­fac­tion with the sales relationship
  • Per­cep­tion of being special
  • Opin­ion of the prod­uct or service
  • Over­all per­cep­tion of their cus­tomer experience

So what are the invest­ment steps that will lead to a high per­cent­age of refer­ring cus­tomers? Here are five steps, most of which are not very expen­sive, that will increase your refer­ral rate:

1. Set up a refer­ral program

When a cus­tomer refers some­one, they are plac­ing a lit­tle bit of their rep­u­ta­tion at risk. Honor and build on that rep­u­ta­tion. Don't take advan­tage of it.

  • If you are in a business-to-business envi­ron­ment, find ways to make your cus­tomer feel spe­cial that don't involve elab­o­rate gifts. Build a refer­ral rela­tion­ship out of respect and or mutual self-interest.
  • If you are in retail, gifts and dis­counts in exchange for refer­rals are fine. It is accepted and even expected that price is the pri­mary cur­rency of trade in retail. How­ever, you still have to deliver.

2. Pro­vide your ser­vice and sales peo­ple with good peo­ple skills

Sales and ser­vice peo­ple that offend prospects and cus­tomers aren't going to help your refer­ral pro­gram.  This can be cor­rected through cus­tomer ser­vice train­ing and sales train­ing. Peo­ple skills can be taught. When com­bined with a lit­tle coach­ing, cus­tomer ser­vice train­ing and sales train­ing can have a tremen­dous impact on cus­tomer communication.

3. Over-perform on your promise

Good peo­ple skills can't make up for a bad prod­uct. They can help, but ulti­mately you have to deliver.  The old adage of "under-promise and over-perform" comes into play when you are talk­ing about referrals.

4. Walk your talk

In a March Blog, Hazel Walker sug­gests the giv­ing to get approach.  She sug­gests that if you want to make a mil­lion dol­lars, help some­one else make a mil­lion dol­lars. Make a refer­ral a week. It's good advise. Also see Mon­ica Postell's dis­cus­sion in an ear­lier blog on Give to Get.

5. Get the word out

One you have the mech­a­nisms in place to deliver a cus­tomer expe­ri­ence that will lead to cus­tomer refer­rals, tell peo­ple about it. Wal­ter Carl, the founder of Chat Threads has done some inter­est­ing stud­ies on word-of-mouth mar­ket­ing.  In an advo­cacy cam­paign for a Pre­mium Pet Food brand, he was able to track con­ver­sa­tions through two waves.

He started with 5,000 peo­ple who told, on aver­age, 12 other peo­ple, result­ing in an addi­tional 61,167 peo­ple.  In the sec­ond wave, the 61,167 peo­ple each told 3 peo­ple, result­ing in an addi­tional 173,101 peo­ple.  In total 293,268 peo­ple heard about the prod­uct (5,000 + 61,167 + 173,101 = 293,268). It is unlikely that you will get these results, but you could try.

As I men­tioned in  part 1 of this series, the expe­ri­ence you pro­vide your cus­tomer is your brand. If you make it an excep­tional expe­ri­ence, your cus­tomer may be will­ing to become an advo­cate on your behalf.  It is then your respon­si­bil­ity to give him, or her, the oppor­tu­nity to do so safely.  Refer­rals are an expres­sion of trust. Deliver for your cus­tomer. They have deliv­ered for you.

Mal­colm Car­law cur­rently serves as the Exec­u­tive Vice Pres­i­dent of Impact Learn­ing Sys­tems, a com­pany ded­i­cated to pro­vid­ing world-class cus­tomer ser­vice and sales train­ing to front-line agents. He speaks reg­u­larly at trade shows and indus­try con­fer­ences. He holds an MBA in orga­ni­za­tional devel­op­ment and finance. Mal­colm is an avid pho­tog­ra­pher, enjoys inter­na­tional travel, and man­ages to keep his orchids bloom­ing most of the year.
2 The Experience is the Brand (Part 2)
Mal­colm Carlaw
View all posts by Mal­colm Car­law
Share and Enjoy:
  • printfriendly The Experience is the Brand (Part 2)
  • email link The Experience is the Brand (Part 2)
  • facebook The Experience is the Brand (Part 2)
  • twitter The Experience is the Brand (Part 2)
  • linkedin The Experience is the Brand (Part 2)
  • googlebookmark The Experience is the Brand (Part 2)
  • digg The Experience is the Brand (Part 2)
  • delicious The Experience is the Brand (Part 2)
  • technorati The Experience is the Brand (Part 2)
  • http://www.selfesteemsolutions.org Self Esteem

    Thank you so much, there aren't enough posts on this… or at least i cant find them. I am turn­ing into such a blog nut, I just cant get enough and this is such an impor­tant topic… i'll be sure to write some­thing about your site

  • http://www.selfesteemsolutions.org Self Esteem

    Thank you so much, there aren't enough posts on this… keep up the good work

  • http://zacharykwilliamson.com/lead-generation-consulting/ Lead­Gen­er­a­tionGuy

    very cool site thanx… this stuff is right up my alley!






Alltop, all the top stories

We're an Alltop blog, and regularly contribute to The Customer Collective and CustomerThink.

Back to Top