|Image courtesy of xcode|
We like to invest in strategies that will give us a quick ROI but that are rarely long term.
Earlier this year I contributed to a TIME magazine post, “Could 2013 Be the Year Customer Service Gets Better?” My short answer to this question is: not until we all learn to become more patient.
When leading a department or organizational initiative, we are given a budget to operate within. Some business leaders will command a return of 3x, 5x, or more. I get this part; I love profit just as much as the next business person. What I will never accept is investing in a short-term strategy because we are looking for a feather in our hat.
I love this quote from Jeff Bezos, Founder and CEO of Amazon, about his business strategy: “We are willing to be misunderstood for long periods of time.”
What he means is that he is willing to invest in long-term strategies that may not pay a return for months or even years. If you’ve followed, or purchased from, Amazon before, you know that the majority of Bezos’ investments are focused on strengthening their customer experience to drive organic growth while Amazon investors remain patient. In fact, the Business Week article “Amazon Investors Give CEO Bezos Room to Run” underlines the notion that he receives plenty of latitude when it comes to executing his business strategies, no doubt with good reason: at the time the article was written earlier this year, Amazon stock was up 40% over the last 12 months and traded at 700 times the last 12 months' earnings!
It is very rare for a publicly-traded company to have such composed investors who aren’t calling for the CEO’s head when margins remain razor thin. Should we doubt his decisions? You decide: Amazon began operations out of a garage and is now a successful behemoth and world-class benchmark for companies in all industries.
Companies have grown impatient and lost the ability to think long term
We have grown impatient. We have grown impatient because the internet has given us not only immediacy but also an easy opportunity to achieve a short-term ROI. An SEO or a PPC campaign can increase our brand awareness and conversion, which is great; however, that's not a sustainable or long-term growth strategy. We are consistently running a rat race trying to find our next customer. This is called a “transactional business.”
I have a love-hate relationship with the internet. I love it because it allows me to deliver this blog post to you. I hate it because it has negatively changed the way we invest in customer acquisition.
“When can we expect to see a ROI?” says your boss.
If you’ve ever been responsible for managing an operating budget, you’ve heard this after you presented your strategic plan.
This is what happens with 99% of companies: we stick with strategies that will save us from getting fired. We invest in programs that are tangible, ones that you can hear, touch, and see because they offer an instant sense of accomplishment.
When your boss says, “Show me what you did with your budget,” you confidently say:
“Do you hear that radio ad? That’s what we spent the budget on." [HEARING]
“Turn to page 37; we purchased a full page ad.” [TOUCH]
“At 3:00pm, we will have a 30-second spot on channel 23.” [SIGHT]
Let’s do this again, but with a customer experience focus.
Your boss says, “Show me what you did with your budget.”
You reply with:
“Oh, I invested it into a complaint resolution system to ensure that our customers are having complaints resolved within one business day. We don’t expect to see an ROI for 12 months.”
This is neither instant gratification nor sexy. When you invest in TV, you’re profiled on a grand stage, and that’s cool. A complaint resolution system will get you a pat on the back, at best.
Let’s be customer-centric for a moment. Your customers don’t care if you’re on TV. They don’t become more loyal to your brand because you have a 30-second spot. What they do care about is that you’re around to handle their calls, emails, live chat, and tweets when they need your help. The immediate ROI of this is your customer simply saying, “Thank you.” They appreciate that you are there for them when they need you. It might take another purchase or two before they become profitable again, but I promise they will come back (if the customer is a fit for your business).
I confidently recommend that all businesses, regardless of size or industry, slash their marketing budgets in half and reallocate those monies into both employee-centric and customer-centric transformations or refinements. I advocate that they invest in advanced hiring solutions, greater training programs, and voice of the customer strategies. We need to build the foundation of our businesses first so that we can grow organically. Then we can invest in what I call “marble granite strategies,” i.e., the bells and whistles, such as a SEO program, TV, radio, etc.
My grandfather grew his fish market in Lima, Peru, where I learned my first business lessons organically - through word of mouth and repeat business. If he were alive today, he would probably be thinking, “What the…?” because he wouldn’t understand why we all run to instantly gratifying ways to grow our businesses.
The easiest sale we will make today is one from repeat or referred customers because often they are already sold on our service or product before they arrive. The only way to grow organically is by delivering a world-class customer experience. I’m sorry, but that logo you spent a month critiquing or that 30-second spot you spent three months producing isn’t going to grow your business.
Be patient, my friends. Let’s operate our businesses like it’s 1975 all over again.
Michel Falcon is a customer and employee experience coach and keynote speaker based out of Vancouver, Canada. He has been featured in, and contributed to, Time, Forbes, Digiday.com, and 1to1media. His book, “Be patient and willing: how the world’s most admired brands grew from obscurity to celebrated” is due in 2014. In the meantime, you can download his FREE ebook, “The 28 Traits of Organizations Who Are Customer Experience Titans” by visiting his website www.michelfalcon.com.