CHAPTER 11
Bringing In New Customers
Creating Optimal Growing Conditions
One of the most beloved metaphors used by direct response marketers and clever copywriters is the concept of the “greased chute.” The idea is that once a prospect starts viewing (or reading) your sales or marketing material, you want to make it incredibly easy for that person to continue viewing (or reading) it, increasingly building interest until the prospect decides it is imperative to buy now, Now, NOW! Picture the customer sliding down a greased chute saying yes, Yes, YES! The next time you can’t sleep in the middle of the night, turn on the television. Essentially any infomercial will exemplify the greased chute in its full glory.
Copywriters and clever marketers have dozens of tactics, tricks, and strategies that they use to create the greased chute effect, and they are undeniably powerful. Many of them are fairly innocuous and used in almost all types of sales or marketing, such as captivating headlines, benefit-laden bullet points, short paragraphs, and story structures. However, marketers who are trying to create a greased chute take their pitches to another level by appealing to customers’ emotions, pushing all the right buttons—sometimes with little regard for anything else.
Marketers have become exceedingly good at using their tricks and tools of the trade to make their content appealing to consumers—almost too good! Add in psychological testing of elements (such as headline colors, font sizes, picture placements, and so forth) that affect buying behavior, and it’s possible to create ads and campaigns that are extremely persuasive. Many companies, consequently, find it fairly easy to drive new customers through their doors. They are actually pretty darn good at that. It’s the steps that immediately follow that pose the challenges—the precise steps that distinguish Evergreen businesses from the rest of the pack.
When considering how your company acquires new customers you need to think about two major components. On the one end of the rainbow is your front-end (customer acquisition) marketing, which is everything you do to bring the customer in. After working through the previous chapters—crafting your corporate character, building your ideal customer archetypes, understanding the role your content plays—you should now be an expert at building your front-end marketing. You should now know, firsthand, how effective marketing can be when you understand how to match your messages to your customer archetypes, at the right time, using the right medium.
On the other end of the rainbow is your back-end marketing. This is everything that happens after the sale. The biggest and most glaring misstep that I’ve seen is that most marketing doesn’t pay any attention to what happens at this point in the process. Average marketers believe their sole purpose is to sell content. As long as someone took the next step and became a customer, the marketers feel as though they have succeeded. As long as the sales reps closed the deals, they feel as though they have done their job. These average marketers and salespeople aren’t at all concerned with how the content is delivered, consumed, or experienced after the sale. This is a big mistake.
Up until this point, the main message of this book has been related to the importance of forming Evergreen relationships with your existing customers and shifting your business from a how-do-we-get-more-new-customers mindset to a how-do-we-better-care-for-our-new-and-existing-customers mindset. But as I’ve mentioned a number of times, every business needs new customers to grow. I’d be crazy to suggest otherwise. A business that is only focused on keeping its existing customers would eventually find itself in serious trouble.
In this chapter, I’ll show you how to put the final piece of the puzzle—the new customer experience—solidly in place. You’ll learn how to create your own version of a greased chute that sends your customers down a path toward a richer and more meaningful relationship with your company (and one they’ll be happy to ride without feeling as though they are being taken for a ride). Once you make the new customer experience the best it can possibly be and build Evergreen relationships with all of your customers, you will be on your way to striking that Evergreen Marketing Equilibrium that we discussed in Chapter 1. In short, you will be setting the stage for building an exciting and thriving Evergreen business.
MANAGING THE EXPECTATIONS GAP
Most organizations exist to create a transaction. They choose to have a simple transaction where the content is purchased and customers go on their merry way, rather than choose to put systems in place to make sure the entire new customer experience is the best it can possibly be—from the moment the decision is made to purchase content through to its delivery and consumption. However, the best companies recognize that both the content and the new customer experience serve a strategic purpose in the Evergreen process. The content plays a major factor in transforming a new customer into a long-term Evergreen customer. But, just as critically, so does the marketing.
Believe it or not, marketing that’s too good can actually increase customer attrition. How? I can hear you now: “But, Noah, with all of the energy you’re asking me to spend thinking about marketing, you’re now telling me my marketing can be too good? How so?” Because it often creates what we call an “expectations gap.”
What Is the Expectations Gap?
When there is a difference between what a customer was sold and what the customer actually gets, there’s an expectations gap. It’s the feeling the customer has when something was promised in the marketing but not provided in the content. This gap can be created unintentionally through overzealous company-generated sales and marketing, or inadvertently through fantastic word-of-mouth. (“You absolutely must try this restaurant—it was the best meal I have had during my seventy years of traveling this planet, and I guarantee that absolutely everything you taste will put you in a state of bliss!”)
Failure to manage the expectations gap is one of the most common reasons organizations lose customers early on. Furthermore, failure to manage the gap utterly obliterates any chance of keeping customers for the long term. The takeaway: To increase your chances of fostering Evergreen relationships, your company has to maintain a careful balance between making your content sound as appealing as possible and preparing new customers for the inevitable less-than-perfect experiences they may encounter.
How Can You Minimize the Gap?
To minimize the expectations gap you need to ensure consistency between your front-end and back-end marketing efforts. Take a minute to ask yourself: Is what you promise in your marketing congruent with what customers actually get or the benefits they receive? Does your content live up to the promises that were made? If not, then it might make sense to tweak your marketing to be more in sync with the content you deliver. Vice versa, you could try to learn where you are falling short and make the appropriate changes to your products and services.
Your content delivery, the processes used for building your Evergreen relationships, and how you bring new customers into your community all need to be carefully considered. Everything should be thought out in terms of “What happens next?” in the life of your customer. And, more important, how do you further the emotional and psychological connection between the customer and your company? If you remember in Chapter 1, I introduced the Evergreen Marketing Equilibrium, which shows the delicate balance you need to strike between “getting the customer” and “keeping the customer.” Not only do you need to ensure your front-end marketing is as effective as possible to make the sale and gain the new customer, you also need to ensure that the new customer experience—delivered through your back-end marketing—is sculpted in a such a way that it begins the Evergreen process. To minimize the expectations gap, you want customers to know upfront what they can expect from our company, when and how.
CREATING CUSTOMER LOYALTY WITH THE FIRST TRANSACTION
Marketers typically have a single goal—to make the sale. They want to bring the customer from point A (not a customer) to point B (now a customer). But this goal is misguided. The real goal of marketing should be to encourage our new customers to accept our position and philosophy and show that our content can better their lives, or their businesses, and meet their specific needs and desires on an ongoing basis. We want the customers to see that there’s more to doing business with our company than just an exchange of money for content.
Great marketing is about converting new customers to a new way of thinking about experiencing our company. We’re trying to generate an intense emotional feeling when customers do business with us. This is an absolute necessity when it comes to the longevity of any specific customer. I hope by this point in the book you realize just how important the emotional impact of the customer experience has become. There’s a brief moment in time where organizations have an incredible opportunity to shift their direction and momentum from getting the customer to keeping the customer.
Navigating the Pivot Point
The moment after a person moves from point A to point B (thereby becoming a customer) is what I call the “pivot point.” You (as a company) can stand still, or you can pivot. Once the first transaction is made, you have a customer. From that point on, however, you have to assume you are at risk of losing that customer, so your stance needs to change. You can either let the customer decide his fate, or you can do everything in your power to keep that customer. Since you’ve read this far, I hope that you will choose the latter approach—not only to keep that customer, but also to foster a long-term relationship.
The moment your shopper becomes a customer you have a major opportunity. This might be the single most important moment in the life of the new customer. And most companies, quite frankly, blow this opportunity. For instance, if you’ve ordered anything online, you’ve no doubt received an e-mail afterward confirming your purchase (and possibly also providing tracking details so that you can keep tabs on the delivery). Typically that’s all these companies do, and consequently they miss a wonderful opportunity to increase their customers’ level of engagement with the company and to strengthen their relationship.
Consider some alternative approaches: If you own a restaurant, you might, for instance, follow up the new customer’s first meal with something as simple as a welcome e-mail. If you have a web service, you might offer a free video that shows new customers how to get the most from your content after they sign up for your service. If you own a hotel, you might bestow a simple gift basket to each guest upon checking in.
Indoctrination really isn’t a nice word, but that’s essentially what you’re doing with your new customer. You want to indoctrinate the customer to a new reality. It’s encouraging your customer to think about your content in a new way. It’s getting your customer to enter a new type of relationship with you, and helping the person to establish a new way of doing business with you. When a prospect becomes a customer, the way you communicate should change. Instead of trying to sell more, more, more, you should focus on increasing the bond between your company and your customer. You should also be introducing your customers to your community and enticing them to participate. You want your new customers to feel as if they are now part of an exclusive group or club. You do this by communicating in a way that creates a sense of belonging.
The best organizations have elaborate back-end systems in place for customer retention. They see every transaction as an opportunity to create a long-term customer. I don’t think it matters if you own a small-town restaurant or are the CEO of a $250 million company. The goals are one and the same. Every transaction offers you the same opportunity. The question is: What will you do with this opportunity?
Learning from the Stick Letter
Those same direct response marketers who developed the concept of the greased chute had another trick up their sleeves—the “stick letter.” This was an actual physical letter, and here’s how it worked: When a customer’s product arrived a couple of weeks after the purchase and the customer opened the box, inside (right at the top) was a letter, and it served a very specific purpose.
To the customer, the letter appeared to be simply a nice gesture from the business or product creator offering congratulations on the purchase and promising a wonderful opportunity or experience. This letter, however, also served a strategic purpose—to resell the customer on the purchase and ease post-purchase buyer anxiety, and in so doing reduce the number of refunds requested. (Keep in mind, these letters were originally developed to accompany products that offered things like the chance to get rich quick, or start a home business, and that are typically purchased from infomercials in the middle of the night—presumably when judgment was somewhat clouded.) The stick letter also offered some “action steps” or tips for getting started and urged the customer to begin using the product immediately.
I’m certainly not implying that your company needs to write stick letters to ease the post-purchase anxiety caused by your content. (After all, you’ve gotten this far in the book, and you know how important your content is. I have no doubt that yours is top-notch!) However, all businesses can learn from these clever copywriters, as they proposed specific steps that, when taken, acted in powerful and positive ways. As we move forward, you’ll realize that what these marketers were doing in those early days was really a young form of onboarding—that is, getting their customers accustomed to doing business with their companies.
Every company needs procedures in place to make the sale stick. Let’s build out yours.
ONBOARDING NEW CUSTOMERS
You need to have in place a “new customer welcome plan,” sometimes also called a “correspondence procedure.” Many web services call this onboarding—the process of getting new customers up to speed on using and consuming the content. Essentially, onboarding includes all the things you do to welcome the new customer to the reality of doing business with your company. It’s a standardized way of teaching all new customers about doing business with you.
The main purpose of your new customer welcome procedure is to encourage customers to adopt certain beliefs and attitudes, and also to get them to start both consuming the content and taking part in the other great aspects of your company, such as your community. Your new customer welcome procedure should comprise two key components—saying thank you and walking your new customer through the next action steps. The format, method, or medium will differ, depending on what kind of business you’re in, but the essential concepts are the same.
Thank Your Customer—and Reiterate the Benefits of Your Content
The first goal of onboarding is simple. You want to thank the customer for doing business with your organization. But before you do this, take a moment to think about what makes sense, and feels the most personalized, for the specific customer archetype you are thanking. For some companies, a thank-you note or letter sent by mail might be most appropriate. Others might offer a verbal (and possibly more public) congratulatory welcome for taking the step of becoming a customer.
An important point to consider: When congratulating or thanking customers, be aware of privacy. Companies often overlook the privacy of their customers by sharing welcome messages publicly—in social media or beyond. This can be a huge faux pas for an organization. Luckily, this issue can generally be avoided, simply by being mindful of the issues at hand. For instance, my friend Stu McLaren of WishList Member, a company that creates web software for private membership sites, wonderfully balances his desire to recognize his best customers (as discussed in Chapter 7) with his need to respect their privacy during his monthly webinar. He’s careful to only mention first names in his public shout-out, which ensures he’s not compromising anyone’s privacy.
This part of the onboarding process is a little like the stick letter, because it also involves reselling your new customers on the benefits that attracted them to want to do business with your company in the first place. Create a sense of buzz and excitement. Show customers what a wise decision they have made, and reaffirm how your content will change their lives. Back up the claims made in your marketing by restating the key benefits you promised that your customers will experience from your content. As you can see, we are learning some powerful lessons from marketers of the past. The key, again, is to adapt your new customer welcome plan in a way that’s congruent with your character, the experience you want to create, and the archetypes of your customers.
Walk Your New Customer Through the Next Action Steps
The second goal of onboarding is to give your customer a clear and concise to-do list—what we call the “next action steps.” The sooner your customers start using, and consuming, your content (and participating in your community), the better. The reason marketers sent stick letters years ago was because they knew the longer a customer had a box full of eight-track tapes and manuals sitting around, and the more time passed before he started consuming the material, the more likely it would be that the customer would request his money back.
You need to get your customers taking action as quickly as possible to avoid any negative post-purchase thoughts that may creep in after the sale. You want to give your customers clear and concise action steps. This might mean instructions on how to start using your content. A dating website, for example, might have a customer immediately set up a profile, upload a picture, and fill out a personal bio. A website that sells a product might ask a customer to join the community forum or post a comment to a social media site. A larger B2B organization, for example, might direct the customer to a set of next action steps to prepare for a large delivery.
Don’t assume that every customer will automatically know what to do next. Too many tech services, for instance, think their customers are computer savvy. This isn’t always the case, which is why online services should always offer website tours. Regardless of whether your industry is high-tech or low-tech, always start from the position that new customers need to be shown what to do next, and how to do it. Even if your ideal customer archetype is a twentysomething who knows the iPhone like the palm of his hand, don’t lose sight of the other customers who are bound to come through the side door.
As part of the onboarding process you should also show your new customers what your best and most loyal customers are doing, and how they’re taking part in your community. The same concept that we discussed in Chapter 7 concerning customer loyalty programs pertains here; customers should be allowed the opportunity to see what your best customers (those on the upper levels of the Evergreen Ladder of Loyalty) are doing. So, for example, if you publish a newsletter that you send to your new customers, then it should highlight some of what your best and most loyal customers are doing. You want to encourage certain behaviors, and the most effective way to do this is by showing your new customers the behaviors of your best customers. This is called harnessing the power of “social proof.” It’s a psychological phenomenon where, when placed in a new situation, people assume that others are aware of what is appropriate and accepted and therefore they imitate the actions of others. Showing your new customer what the best and most loyal customers are doing has the added bonus of demonstrating all the great things that come from doing business with your organization.
I have a client who publishes a monthly newsletter and is very strategic about what goes into that newsletter. The newsletter highlights the community and what his best customers are doing. This subconsciously conveys to those new customers that there are certain customer expectations, and that there is a path for customers to follow during their lifetime doing business with the organization. It also shows customers the recognitions and rewards that come from a greater level of loyalty with his company.
The goal of onboarding new customers, and setting the tone for the new customer experience, is ultimately to create a sense of attachment to your organization and your community structures. You want the customer to understand your utmost gratitude for anyone becoming a customer; you want to show that you’re there to ensure the experience is the best it can possibly be. You want to ensure that your company delivers the highest-quality content, meets the promises made when you marketed your products or services, and is well poised to offer a unique and fulfilling customer experience. But there’s more. You want your customers to recognize something deeper, more intimate, and more profound is available than simply buying your content.
Remember in Chapter 7 when I described the unexpected welcome package I received from Audi a few months after purchasing a new car? Well, that was essentially a modern-day version of the stick letter. Of course, I wasn’t going to return the car, so they weren’t really trying to reduce any post-purchase buyer anxiety I may have been having. However, they were strategically detailing the character of Audi, and how I might associate myself with that character. Likewise, they were introducing me to the Audi community. They were hoping to instill a feeling that’s partial to the brand. They wanted me to adopt certain perspectives and attitudes and beliefs about the company. They wanted me to feel that I’m now part of an exclusive group—to feel a sense of belonging. This is precisely how organizations create raving fans and evangelists. But most important, when done properly, this kind of onboarding creates an instant bond between the company and the customer.
Most marketers and organizations make the mistake of thinking that their content is the most important element of their success. After reading this far, you know better. Of course, the content you provide is important. Of course, it needs to be world-class and better than anything your competitor provides. But the entire purpose of trying to get a new customer should always be to create a long-term customer with massive value. The worst way to approach marketing is by assuming that the main point of getting a customer is to elicit a onetime transaction. At the point of the first transaction, or even the first time customers are exposed to your organization, you have an opportunity to enter a conversation with them unlike any they have ever had before. This is your opportunity to invite your customers to join your community, and show them all the amazing things going on—mainly that your content is only a small part of the experience you provide.
COMMUNICATING WITH THE CUSTOMER AFTER THE HONEYMOON IS OVER
During the pivot point, that critical moment after someone decides to become a customer, you have an active customer—but from that moment forward you should be concerned with losing that same customer. You should now focus on building an ongoing and strategic communication plan that’s based on what you anticipate the “lifetime” of your customer to be. Each piece of communication should be designed to accomplish two key criteria:
1. Strengthen the bond between your customer and your company. To do this, you need to pay special attention to your corporate character and the key points you want your customer to associate with your company. You should be looking for ways to increase the customer’s involvement in the greater community. Ask yourself: How can you get the customer to _________(fill in the blank: contribute, communicate, consume, and so forth)?
2. Drive greater revenues and increase the value of the customer. More important, each communication should increase the frequency of transactions and, of course, the amount of money spent during each transaction.
Each new customer deserves to be treated like your best and most loyal customers. You never know if a customer will eventually become one of your most profitable customers, so it would be foolish not to focus on the entire process a new customer goes through when doing business with your company. Consider building a blueprint or action plan for your new customer follow-up. Long-lasting relationships are established when customers are satisfied, and even more so when they understand that you are nurturing and trying to further the relationship. This is done through each and every interaction with the customer after the sale.
Almost nobody follows up with the new customer. When was the last time a restaurant called you a few days after you dined there to see how your meal was, or a hotel you stayed at reached out to hear about your experience? It certainly doesn’t happen very often. Why? More often than not, it’s because the business has moved on to the next new customer.
Consider the following: A few days after the sale, what if you simply asked your customers if their needs had been met? I’m not talking about some faceless survey; I’m talking about a genuine follow-up. (Note: An automated survey could serve this purpose, provided it maintained a personal and authentic tone.) Imagine what you might learn that could help improve your business. Even more important, what if someone in your company actually took the time to consider acting on the responses?
Do you have step-by-step procedures in place for the early life stages of a new customer? If not, you should. Checklists are a simple yet highly effective way to manage the new customer process. Businesses use checklists all the time. Restaurant franchises use checklists for everything from how to assemble a cheeseburger to how to clean a bathroom. When you board an airplane, your pilot runs through a preflight checklist to ensure passengers get to their destination safely. Regardless of the size or scope of your business, you should have a new customer checklist. Sure, it’s easier and far less stressful to just let customers come and go on their merry way, but your business will never reach its full potential if you follow this path. If you want your business to become Evergreen, you should have (and use!) a new customer checklist for the first three months of the life of a customer.
Unfortunately, most companies do little more beyond saying “thanks,” and then dumping the customer into the single database for ongoing marketing promotions. Proper onboarding requires you to think about your customer life cycle and, more important, to consider the steps you want a new customer to take. For example, does your content require specific training or tutorials? Is it complicated to use? If so, your onboarding process should include a schedule for specific training, follow-up calls, and reminder e-mails.
What we’re really talking about here is the education of consumption. You want to teach the customer how to consume your content and how to contribute to your community. What are the next steps you want the customer to take? When is the next time the customer should make a purchase? What should the customer do if there’s a problem, question, or concern? These are all questions you should be able to answer.
Following Up Effectively with New Customers
When onboarding new customers, it is critical that you ask (and answer) each of the following key questions before sending out any piece of communication:
• Does the message highlight the actions and behaviors of your best and most valuable customers? If not, then it should. Whether it contains customer testimonials, social proof, or case studies, all communications should show your new customer that there’s more to your company than meets the eye.
• Is the messaging educational and valuable? Your ongoing customer follow-up should always be valuable. It shouldn’t be created simply to upsell, downsell, or resell—especially in the early days of communicating with the new customer. Don’t worry; there’s a time and a place for that. One of the greatest challenges for companies is figuring out what to contact the customer about, and when. If you only ever talk about your latest promotion, your customers will lose interest very quickly. Instead, your messages should help customers better use your content and ensure they are receiving the maximum benefit. The contact needs to serve a purpose. If it doesn’t, you are better off not making that contact.
• Is the messaging personalized to that specific customer archetype? Your messaging should always be conversational in tone. It should tell stories about your company to perpetuate your key character points. It should be authentic, highlighting both the good and the bad. When things go wrong, be open and honest about what happened and why.
• Are you using the appropriate delivery mechanisms? Based on customer archetype and customer data, you need to ensure you are delivering your follow-up marketing in a way that’s congruent with the recipient.
If you ask each of these four questions every time you communicate with new customers, you’ll do fine.
Recognizing Expected and Unexpected Behaviors
Your new customer welcome procedure needs to be fluid and able to adapt to certain customer behaviors. You need to know what the expected behaviors are, and then you must also keep a watchful eye on your new customers, so you can observe when these behaviors have changed or haven’t occurred. Suppose a website has a series of videos for customers to learn how to use that specific product; these learning tools are part of the onboarding process. You should be tracking behaviors to ensure the customer is following through on desired actions. If a customer watched the first two videos, but then didn’t watch videos three, four, and five as anticipated, something might be wrong.
In Chapter 10, I shared the story about the online subscription provider who was losing customers because they couldn’t retrieve their passwords. It wasn’t until someone noticed a change in regular behavior and actually called the customers that the company figured out what was going on. (And by then the company had lost hundreds of thousands of dollars.) You need to recognize these kinds of situations and reach out accordingly. If your customer hasn’t completed tasks that 80 percent of the rest of your clients complete, then find out why. You might be on the verge of losing a new customer!
PREPARING FOR A (HOPEFULLY INSANELY) SUCCESSFUL PROMOTION
No chapter about bringing in new customers would be complete without a discussion of discounts—particularly those super-deep discounts peddled by many online companies. Discounts have become popular with many marketing strategists lately. Why? Because they are a comparatively cost-effective way to spread the word to an extremely wide audience. Do they work? Well, yes—but only if they’re managed properly.
Let’s return to the story that we started in Chapter 1. When Rachel Brown’s bakery, Need a Cake, was swamped with 8,500 new customers pretty much overnight, it almost destroyed her company. All the excitement generated by a promotion gone viral was overshadowed by one simple fact: Brown wasn’t able to deliver on the promises she made. She just wasn’t ready for what happened. She was inundated by too many new customers all at once, and she wasn’t able to handle the volume. This undoubtedly meant that those new customers didn’t walk away with the impression that Brown expected to make, which in turn significantly diminished the chances that many of those “new customers” actually ever came back again.
More critically to the long-term health of Brown’s company, we don’t know how her existing customers were impacted by this blunder. Remember, the company was more than twenty-five years old! Surely, Brown had plenty of existing customers—cupcake loyalists all—who shopped her business regularly. We’ll never know the full extent of the damage, but we do know that the promise of “new customer salvation” undoubtedly wasn’t worth all the hype and trouble.
Groupon, and other promotional-type sites, can certainly be useful for generating new customers. However, the implications of these promotions need to be carefully considered—and they need to be managed strategically and correctly. The most important thing, something that so many people totally miss, is that systems need to be put in place for retaining all the new customers, and making every new customer a long-term customer. If you are thinking about engaging in one of these promotions, here are the six steps you need to take to run this type of promotion successfully.
Step One: Understand the Promotion in a Broader Context
The worst (and deadliest!) trap I’ve seen so many companies fall into is that they confuse these types of promotional discount websites as their sole marketing strategy. Let’s be clear about something: Offering super-deep discounts to entice new customers is not marketing. These websites should be viewed as a “once in awhile” or “rarely used” tool to drive new customers to your business. They should not be viewed as your go-to source for generating new customers. This kind of thinking will inevitably backfire, since you run the risk of conditioning the general public into thinking that a discount will always be available with your company, which will ultimately devalue your content until it’s pretty much worthless.
Another thing to consider is whether a “discount” is even congruent with the type of business you run. What if Rolex started doing buy-one-get-one-free offers? It wouldn’t be congruent with the company’s character, would it? Even a onetime, ultrarare discount might not actually make sense for your company. Would your character offer this type of promotion? If the answer is no, then you need to turn to other strategies for bringing in new customers.
If you find yourself turning to discount websites more and more frequently to bring in new customers, this may point to a bigger problem: You may not be adequately focused on building long-term customer relationships. Before you give in to your knee-jerk reaction to run yet another promotion, take a moment to think about ways in which you might better nurture your current customer relationships.
Step Two: Plan the Promotion Carefully
I can’t really blame Brown or Groupon for what happened to Need a Cake. In any event, placing blame misses the point. The real point is that both Groupon and Brown should have known better. They should have had caps on how many Groupons would be sold, and they should have known what Brown’s business could realistically handle. When you embark on one of these promotions, you need to carefully weigh the metrics and the ramifications for your business model. At the very least, ask yourself the following:
• What will the promotion cost on the front end?
• At what point will you break even on a new customer?
• Can you negotiate a better profit split?
• How many new customers can you realistically handle?
• How many discounts are you willing to offer, and when will the offer expire?
As with any type of promotion or marketing venture, you need to focus on reality and set realistic expectations so that you do not end up letting customers down.
Step Three: Be Ready to Capture New Customer Information
Since we’ve already discussed the importance of data capture at length, I won’t go through all of the nitty-gritty again. (If you need a refresher about how to gather customer intelligence, and why, just go back to Chapter 9—it’s all there.)
What I will say, however, is that typically these promotional-type websites don’t provide businesses with personal information about the customers. You typically get a name and that’s about it. In short, don’t expect to have the data capture process done for you. Be prepared to capture the information about every new customer yourself so that you can implement your new customer welcome procedures.
Step Four: Prepare Your Staff
When my clients have run these types of promotions, they generally do a very good job of preparing their staff for the more practical aspects that the influx of new customers will have on the business. That’s not the challenge. The biggest challenge I’ve seen (and I’ve seen it over and over again) is that staff is typically not well trained on the emotional part of the equation. Staff members, if not directed otherwise, tend to view someone with a discount as a different (read: lesser) type of customer. Consequently, these customers can, at times, be treated very poorly. It happens—and then, seriously, what’s the point? Why did you go through all the effort (and cost) to bring in new customers, only to have them walk away with a less-than-stellar impression of your company? Don’t let this happen in your business.
At the root of this problem is the fact that many of these teams weren’t focused on the true value of a new customer or well versed in the character of the organization. You need to address these issues with your staff members. In addition, you can do a number of things to maximize the value of the customer’s first visit. For instance, train your team to recognize the right time to upsell your content. Make sure that your staff understands your high-profit-margin products and encourages new customers to try them.
Step Five: Remember the End Goal
The goal isn’t to get a flood of new customers, like Brown did. Rather, the goal is to get customers you can build long-term Evergreen relationships with. It is your job to ensure that you do everything within your power to make the new customer’s first experience the best it possibly can be. Only then do you increase the odds that this new customer will become a regular customer with long-term value.
Only by spending the time needed to carefully consider each step of the process for this type of “new customer” can you be fully prepared to deal with the customers when they arrive. Every new customer presents such an opportunity—whether the customer comes to your business through a promotion, or a direct referral, or strong word-of-mouth marketing. Be sure to never forget the end goal.
Step Six: Take Good Care of Your Existing Customers
No matter what you do, your existing customers will know that you are offering heavy discounts. You would be foolish to think they won’t notice. Likewise, you would be foolish to think that it won’t have some impact of them—and how they view your company. Remember how strongly Starbucks loyalists reacted to the company’s efforts to turn low-value customers into high-value customers? There is a natural tendency for customers to think: But what about me? I’ve been loyal and I’ve been paying full price. Don’t I get anything for my loyalty?
Recognize that this reaction is going to happen—and take preemptive measures that will minimize any damage. There are a number of ways to handle this dynamic, and ultimately you’ll need to take the approach that works best for your company. Here’s one approach to consider: Inform your existing customers of the promotion yourself, and perhaps even suggest that they try and snag one of the discounts while they’re available. Maybe run a special promotion just for existing customers. Consider suggesting to longtime customers that, since they love your company so much, they should refer someone they know to your new promotion.
You know the feeling when you find out about something from someone else and you wonder why the person who should have told you, didn’t tell you? It’s exactly the same thing here. Don’t ever embark on a promotion, with the intention to tempt new customers, at the expense of creating a less-than-desirable reaction with your existing customer base. The gains aren’t worth the potential losses.
It may seem a bit counterintuitive for a marketing book to wait until the last chapter to focus on the nitty-gritty of getting new customers (not to mention waiting until the last few paragraphs to focus on running a proper promotion!). But with the Evergreen strategic approach to marketing, this is precisely where these concepts belong. You see, if you’ve been reading carefully, you know that, in fact, this whole book has been about getting customers. When you embrace the concepts of the Three Cs, you can’t help but get (and keep) customers—and grow your company exponentially.
They used to say retention is boring and acquisition is sexy; if you’ve read this far, then you’ve seen just how “sexy” keeping customers can be. Not only that, it can be tremendously fulfilling as well, to say the least. Too often organizations miss the single most important and profitable component of long-term, sustainable growth because they are struggling with the “new customer addiction.” It is often said that the first step in overcoming a problem is admitting the addiction.
We’ve really come full circle in these eleven chapters—and I hope I’ve opened your eyes to this new operating paradigm available to your organization. Just like an addict who is being checked out of rehab, you can say good-bye to an old way of life and greet the rest of your new life with open arms.
I have just a few more important words to share with you, in the afterword, before you go on to grow your business.