Forget About ROI, Start Thinking About 'ROE'

Word-of-mouth is gold and social media is the vessel we use to promote it, but how exactly is it accomplished? As businesses we are always looking for ways to lower the cost of acquiring new customers. It’s simple economics, the lower the acquisition cost the more sales (and money) we make…simple right? Not exactly. As with most things it’s easier said than done, but if you make it part of your daily customer/employee interaction to give your customers something positive to talk about you go a long way to influencing a higher rate of word-of-mouth, let’s call it your ROE or "Return On Experience."

In this post I’m going to throw out some radical ideas. Radical ideas that, at first, you will discount as being just that, radical. Then these ideas will start to work on you as you mull them over in your mind, more than likely you will talk with your spouse about them or maybe a co-worker asking yourself and them what if? What if you did try what I’m about to suggest, what would happen? Would it produce rapid word-of-mouth, would it reduce your cost per customer, would it create you more sales? The answer to all of those questions, of course, is yes but I understand that there will be a certain amount of skepticism involved but as you will soon find out, the logic is iron clad.

Customer Experience

I’ve brought this up before but I thought it important enough to bring it up here again and that is: it’s the difference between what people expect and the actual level of customer service received that will dictate whether or not a person will talk about how their business with you went. Of course it goes without saying that if you fail to meet those expectations the word-of-mouth will be negative but if you exceed them, well …all sorts of magical things start to happen, such as repeat and referral business!

The idea is to go so above and beyond what the customer expects that you earn massive amounts of exposure on the level of Return on Experience (ROE) you receive from shocking your customers with your level of customer service. In fact, I don’t want you to think about it as “customer service” at all, instead think of it as:

Customer Enchantment

It might just be me but when I think of the term customer service I think about doing all the things that I’m supposed to do such as be helpful and friendly but when I think in terms of customer enchantment I think on a much, MUCH grander scale. In other words I don’t want you to think about how you can give good customer service, I want you to think in terms of “how can I enchant my customers?”

Enchantment: (en·chant·ment ) Captivation: a feeling of great liking for something wonderful and unusual.

Before I get into some ideas of what I mean I feel it’s important to remind you about the story of the boy and the starfish. You know the one, the one where there are thousands of starfish beached upon the sands where a little boy, one-by-one, is throwing the starfish back into the water. When asked why he’s even bothering when there are too many to make a difference, the little boy replied after throwing a starfish back in the water, “It mattered to that one.”

I bring up that story because I understand that what I’m about to propose would be impossible to do with every customer, of course you wouldn’t want to do what I’m about to propose with every customer anyway because then it would become expected and the whole idea is to go beyond what is expected. Another thing to keep in mind is that you are trying to work your way into your customers social graph (both online and off), or at least become a conversation within it. By influencing your customers to say positive things about you, you in effect create customer that create other customers, thus reducing your customer acquisition cost theoretically in half.

Scenario #1 Let’s say you have a customer come in to your dealership to purchase a vehicle for his daughters 16th birthday. He of course is excited but you decide to take things to the next level by getting the car wrapped for him, complete with a big bow on top. But you don’t stop there because you really want to enchant your customer so you then give to his daughter a year’s worth of free oil changes, 5 complete details and a $150 gas card.

Scenario #2 A customer drops off her car for an oil change and you learn that she is due to give birth to a baby boy in two weeks so you decide to go shopping for her. You buy her some baby related items, maybe a diaper bag and diapers, maybe some baby clothes or baby blankets. While talking with her you learn that she is in need of a car seat or maybe even a stroller so you picked one of those up for her as well and put them in her car for when she comes back to pick it up.

Scenario #3 You learn that one of your customers has had a death in the family so you send a big bunch of flowers to their house, along with a gift certificate for a free house cleaning and yard maintenance with a hand written card that says, “It’s always tough losing a loved one and we understand that there are always too many things to worry about during times like these. Attached you will find a gift certificate for free house cleaning and yard maintenance, two less things that you have to worry about. We truly are sorry for your loss.”

Do you get what I mean when I say customer enchantment? I sure hope so because by doing things such as the three scenarios above you go a long way to influencing word-of-mouth. Think about what will happen once the word gets out about the things you are doing for your customers and it will get out. In fact your customers will find a way to bring up the amazing things you did both in person and all over Facebook (and Twitter, MySpace, and others) any and every chance they get. They will happily do this because you made a difference in their lives and did something they would NEVER have expected. You now have a customer and a word-of-mouth generating machine for life.

Another Crazy idea

What if you empowered your employees to do this sort of thing. Maybe create an enchantment budget, think of it as advertisement if you have to but by allowing your employees to get creative with customer enchantment and then giving them the means by which to do so you are creating an environment that creates rampant word-of-mouth.

What ideas do you have when it comes to creating customer enchantment, how can you increase your ROE?

Social Media for Business is About Giving, Not Taking

Many organizations – and particularly businesses – still look at social media and wonder, “Where’s the value?” From their perspective, social media fails to deliver the goods. And the bad news is, from their perspective, it probably always will – because the question “What can I get out of social media?” misses the very point of social media.

At the heart of the misunderstanding is the question “Why is social media here?” Consider Facebook, for example. Was Facebook created to help users share their experiences and find like-minded people, or was it created to serve the needs of stalkers? Okay, that question was too simple. But if you change the second option to “to help corporations improve their profits by leveraging the social networks of unsuspecting users”, the answer would be the same.

Harsh, you say? Perhaps. At least from the business’ perspective. But from the average Facebook user’s perspective, corporations who use social networks to reach out only for financial gain are seen as outsiders – just short of “creepers” and “lurkers” (see Urban Dictionary).

By design, social media are venues for giving, not for taking. And to users, a participant’s motives are self-evident.

30 years ago, there would have been less scrutiny on organizations attempting to leverage social media for financial gain – had there been social media. In the ‘80s, it was cool to be a taker. Yuppies flaunted their earnings and their consumption, stocks (and retirement funds) were on the rise, and everyone-who-was-anyone expected to retire by age 55. Takers suffered a setback with stock market crash of 1987, but the mindset rebounded with great resilience, turning a blind eye to the footloose behavior of the ‘90s in favor of more big corporate gains. Then, with the new millennium, came the collapse of Enron, the creation of the Sarbanes-Oxley Act and a growing public distrust in corporations. To a new generation, “taking” was no longer cool. And it was this new generation that gave birth to social media.

Don’t get me wrong. I’m not suggesting that the current generation is innocent of “what’s-in-it-for-me” behavior. Quite the contrary. After all, this is the generation who brought us Napster (the illegal version) and Limewire. What I am saying is that the spirit of social media – from Myspace to Facebook to YouTube to Photobucket to Wordpress – is about sharing. Users turn to social media to share their ideas, their creations, their social circles, and their influence.

And as long as corporations engage with social media for the same reasons (or ostensibly the same reasons), then engagement can work.

Such examples of corporate sharing aren’t even difficult to find. Philanthropy is an obvious place to start, but stopping there would miss the point of social media. Because money isn’t the biggest asset in the social vault. Knowledge is.

So, start a dialog with your customers. Share your manuals (even on products you no longer support). Develop slide presentations that educate (not sell). Create infographics. Promote responsible behavior (which, for brewers, could include curbing sexism). Make a difference.

In brief, if you want to get something out of social media, you have to stop trying to take.