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10 Ways to Increase Your Subscription Stick Rate

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Whether you think of yourself as a strong or a weak marketer, it’s likely you are not spending enough time working to keep your customers around longer.  Most folks prefer climbing the next peak.

And yet, you’ve heard it a million times.  It’s a ton easier to sell more to an existing customer than to a new one.

In previous posts, I’ve talked about the fact that every business is one way or another in a subscription model.  You either have customers on recurring billing or are “just” trying to sell them again after their initial transaction.

In this post, I want focus on the traditional subscription (continuity) model, where a customer has signed up for a product or service that has a recurring billing component.  That might mean monthly, quarterly or annually.  The point is that every so often, a customer re-ups with you.  That also means that every so often, they have an explicit opportunity to cancel or ask for a refund.

When I work with marketers about increasing their customer LTV and subscription stick rates, the below list details the top places I dig in.  To make sure we understand what is happening at each level, to set a baseline (if necessary) of where they are, and to help inform prioritization of testing to improve that component of the business.

  1. Do you actually know your subscription / continuity take rate and your stick rate on an overall basis?

This is a simple (note, not always “easy”) one.

Sure you can go crazy by splicing and dicing your numbers countless ways.  By cohort. By channel or front-end campaign.  Gross or net of returns.  By customer count and by revs.

But start with the basics. Of the people who start each month, how many are around for the next few billing cycles. Where are the biggest points where customers drop off? Just starting there will reveal a good bit of info and insight to help inform what you should be testing.

For those of you who are already doing so, hopefully I just gave you a few more ways to think about it.  You can always get more sophisticated about how you segment your customers.  And likely you’ll want to do different things for different segments.

But without a base level of understanding of where you’re at, it’s hard to know what to do next.

  1. Do you know the top 4 reasons customers are cancelling or asking for a refund?

Most likely the list includes “too expensive”, “don’t use the product”, etc.  But you might have something totally different on your list, for example that your product is too complicated to use. While no one wants to hear that type of feedback, I’d always rather know that than not.  Because depending on the order of the most prominent reasons, you can decide what to test next and how to tackle each reason.

  1. Do you have a cancel / save offer, script, and training when customers want to cancel?

Next, what do your agents say when a customer calls to cancel? Do they have specific guidelines or an outline to follow? Have you tested (and measured) different strategies? Ultimately, it’s a business decision on what kind of offers you might want to give to a customer.  I’ll say that it drives me crazy when the mobile phone carriers offer me a big discount when I’ve called to cancel.  Why did it take my wanting to cancel to get such a good offer?  For your business, the scripting might include something as simple as probing why a customer is cancelling.  Sometimes there’s a lack of information or training the customer needs.  Whether or not a rep can keep a customer, at the least, that information needs to be documented and passed along to the appropriate person (See #1 above and #10 below).

  1. Do you have customer care agents or sales agents handling cancel / saves?

This is again another business decision, but if you want a true save strategy, I’d suggest that you test your sales agents, not your customer care agents, for this task.  Sales vs. care agents are totally different people.  Both should come from a place of providing value and service to a customer.  But care agents generally have a softer demeanor, while sales agents are typically more skilled at overcoming objections, speaking to features, benefits, and value of an offer.

  1. Does the product actually meet the promise you made when the customer signed up in the first place?

This one sounds obvious, but beyond making sure your product is a good one, this point goes to real expectation matching.  What does your customer actually think your product or service is going to do? Does their experience match that expectation?

Note, beware if you find yourself saying, “well, if only the customer watched the 20 minute tutorial or did x, y, or z, they would know what to do.”  To those folks, I’d ask what guidance are you giving them to watch the tutorial or to know to take the additional action.  At the same time, if your product is touted as “simple to use” and “you can get going in only 5 minutes”, then arguably it shouldn’t take a 20 minute tutorial to do so.   Or if your site is so confusing that customers who are in fact looking for information can’t find it, I’d posit that your “simple” brand promise is not being delivered upon.  Remember it’s not solely about a customer’s explicit use of your product or service.  But rather their entire experience, from order entry to FAQ’s and customer support.

  1. What info do you put on the credit card descriptor?

You may or may not be as anal as your customers, many of whom look through every line of their credit card statement.  Even though your customers may love you, if what shows up on their credit card statement seemingly has no relevance to the brand they interact with, their chances of challenging the charge and/or calling you to cancel will increase.

This kind of thing can happen for different reasons.  Sometimes, a marketer has a business name that differs from the various products she sells.  And so it’s simply easier to put the company name on the descriptor.  This isn’t exclusive to folks intentionally trying to hide their brands from the company name – my guess is that anyone reading this is a purchaser of something from P&G (Proctor and Gamble) but doesn’t explicitly realize that P&G is the parent company.

Take a revisit of what appears on the credit card statement from a brand new customer’s perspective and think about whether or not it would confuse you.

  1. What happens when a customer’s credit card declines?

Do you have a process to retry, use Account Updater, or to possibly call a customer to let them know their credit card has declined? At the least, testing the frequency and overall quantity of retries is something all marketers should do. Whether that means every day for a week or two, or once a week for 4 weeks, the reality is that the cost per attempt is something you or your team should know (let’s say it’s roughly $0.10). Then it’s simply a matter of comparing the necessary success rate vs. your price point and margin.

Account Updater is something I’ve discussed previously, but the short version is that some banks provide a paid service to update the expiration date of a valid card but one that has simply gone past its expiration date.  It’s an extremely rare customer that will call to update their expiration date.  The beauty of the service is that you only pay per successfully-changed card.

Finally, depending on your price point, margin and call center fees, it might be worth exploring calling customers for whom their card has declined.  By the way, one measure of knowing whether you are proud of your product/service or just trying to sneak under the radar on their bill is how you respond when you consider calling a customer.  If your product is actually of true value, then while yes, some customers will take the call as an opportunity to cancel their subscription (how is this worse than the declined credit card by the way?), you should feel a responsibility to make sure your customers have uninterrupted access to your product.

  1. Do you send an email prior to a new billing period and offer additional products?

This might not seem obvious to extending stick rate.  How would notifying people of an upcoming charge and/or offering them more to buy improve retention?  Like many others out there, I’ve signed up for Dollar Shave Club and must say that their pre-shipment emails are some of the best I’ve seen.  Not only am I informed about my next shipment and given the option to delay it, but they have a very slick one-click tool to add additional items to my order, shaving cream for example.  I may not have needed new blades, but if I needed shaving cream, that keeps me on as a customer.  At the least, they’ve added to the customer LTV.  Best case, because I continue to think of myself as a Dollar Shave Club buyer, I’m more likely to keep my subscription active vs. cancelling altogether.  Which either means new acquisition for them or reactivation, neither of which is easier than maintaining an existing customer relationship.

  1. Do you allow customization?

I alluded to this, but it deserves its own call-out.  Increasingly, customers expect to have some level of control on when and what they receive.  We no longer live in the world of one-size-fits-all.  Customers may really like your product but aren’t using it at the pace you suggest.  Or perhaps they have a busy travel schedule for the next month.  Or maybe they use some of your products dramatically more than others (especially relevant for those in the beauty category).  It’s preferable to give people the ability to customize their order online.  But even if you market it online and only your reps can make the change, I would encourage you to test how much flexibility to give your customers.  This is also where using customer feedback and cancelation reasons can help to inform where you start.  If the number one reason people cancel is that they don’t use it (assuming it’s a consumable) as frequently as suggested – beyond revisiting the amount you’re shipping, how you help them consume the product, etc. – you might want to consider varying the quantity or frequency of their orders.

  1. Do you have someone accountable for retention marketing?

Whether you are a solopreneur or running a 9-figure business, if you have a subscription component of your business, someone should be working to improve it.  It might be the difference between getting to the point where you can stop being a solopreneur and can hire someone.  Or it might mean adding even more margin to your business.  Regardless, do the math.  How many people do you add onto a subscription each month?  What’s the stick rate.  How much do you have to move the needle to justify more attention or a hire to improve the value of those customers?  Again, it might be just you for a while.  Or it might just be a no-brainer to bring someone one.  But make sure it’s an informed choice you’re making.

As one of my friends says, there’s never been a more difficult time to acquire a new customer.  And yet, too often we keep focusing on getting new ones at the expense of maintaining our existing ones.  With a bit of process and working at it, there are ways to keeping your customers around and happy a lot longer.  But it requires attention and some testing.

Now it’s a matter of taking this playbook and applying it your business.  The rewards are worth it.

Cost Optimization Isn’t Sexy Until You See What It Does To Your Bottom Line

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I have previously shared the process that businesses can use to scale media and revenues.  If you’re a small company, that’s where the focus should be, because if you don’t have sales, the rest doesn’t really matter.

As you scale, though, it becomes crucial to make cost optimization an additional area of focus.  You of course want to get as much margin on those sales as possible.

I’ll acknowledge that optimizing your media, CPA’s, and revenues can be more fun and sexy than, say, lowering your costs to your shipping carriers.  Or working to improve your merchant processing fees. But if your larger goal is to put more money in your bank account or to have more money to invest back in the business, then shifting from what’s more fun to what is more impactful is an important change to make.

Below is a breakdown of 8 cost-focused categories where I’ve seen significant impact to a business’ bottom line.  As with any area that you want to improve, make sure there is a single person who is accountable for that part of your business.

  1. Merchant Processing
  2. Commissions to affiliates
  3. Commissions to sales reps
  4. Shipping / Fulfillment
  5. Technology
  6. Product Costs
  7. Customer Service

Prioritization

At the risk of repeating something from my prior article, I cannot stress enough how important prioritization is. Whether across cost buckets or in evaluating tests within one.  Sometimes you know straight away where your numbers are out of whack.  Even then, I’d suggest taking the 5-10 minutes to do some math on how much impact you think you can have.  Or how much improvement you need to get relative to other areas you may focus on.

Testing

A quick word on testing.  Generally, many of the areas below are more about vendor pricing and so it’s easy to assume that there really isn’t testing involved.  Most of the time, I’d agree with you.  But to the extent you are affecting customer experience, such as changing shipping carriers or repackaging your product, keep a particular eye out for noise from your customers.  These types of changes may not be based on a pure A/B test.  If you approach them as tests, however, then you and your team are likely to be more mindful of watching for changes elsewhere.

Let’s dig in…

1. Merchant Processing

This is arguably the least sexy of anything on this list.  It’s likely not the largest expense on your P&L, but it may be the one you cannot survive without.

If you can’t process payments, you are likely not in business.  And there are a TON of companies who are seeing their processor go away as a result of Operation Chokepoint, the government’s way to shut down marketers with questionable or problematic business practices.

When it comes to payment processing, many businesses optimize for ease and speed at the outset.  As such, they set up with Paypal, Stripe, or a 3rd party that works with smaller, oftentimes higher risk marketers.

But once you achieve any sort of scale, you may be leaving dollars on the table in higher processing fees because you have a sole provider or simply because you haven’t shopped around for a better partner.  Whether Paypal adds incremental orders for you is something you should test, but typically, going through one of these services means you have a higher overall rate or per-transaction fee.  Or how much you’re charged for chargebacks.  Or countless other buckets in that annoying bill that you aren’t really paying attention to.  That is real money out of your bank account.

You might also be eligible for better service, such as a lower reserve (or none at all) or getting approved to process more when your volume increase. Unfortunately, I’ve worked with several clients who weren’t able to scale, not because they didn’t have the demand, but because they literally couldn’t transact those orders.  Their merchant processing partner hadn’t approved them for higher volumes.  That is a painful, frustrating and costly situation in which to be.

Here’s the thing – merchant processing is one of the most annoying parts of running your business. And it’s an area that very few people understand.  But it could be costing you percentage points to your bottom line.  And those points are 100% margin, 100% cash.

So what to do? At the very least you (or someone on your team) should go through your statements to try to understand the different components of your bill.  There are consultants who can help you do this as well; it’s your choice whether you want this knowledge in-house or just want to pay for outside help.  Then get on the phone with your processor to talk through your bill.  Make it a goal to get better pricing and service for your company.

(I’m actually trying to get a friend to put out a marketer-friendly, no sales pitch webinar explaining some of the more important aspects of merchant processing. If that’s something you’d be interested in, shoot me a line here.)

So while merchant processing may not be as sexy as front-end split testing, when all is said and done, what margin do you get on that test that got you a 5% lift, versus the lower points you pay and better relationship you have with your processor?

2. Commissions to Affiliates

These next two sections arguably should’ve been in my prior article, as they are ultimately about media, but a) I forgot to put them in there; and b) they have some commonalities and relate to broader vendor and employee management, so they’re going here.

When it comes to affiliate commissions, I’m actually going to push back on a commonly-held philosophy: trying to pay out out as little as possible.  Many marketers see their affiliate channel, whether offline or online, as a hedge against paid media.  So they use it to balance out their numbers, in case their paid media comes in over goal.  I understand that mentality.  We did this for some time at Beachbody.  But then we realized that we need to manage our paid vs. affiliate traffic channels separately.  The latter wasn’t there simply in case the former had an off week so that our overall numbers looked okay.  Each had to perform on its own.   And our goal was to maximize the opportunity from each.

To do so, we, similar to most people who use affiliate traffic at scale, knew that we wanted to do everything we could to reduce friction for your affiliates – deliver to them ready-made banners, creative, swipe copy, etc.  And in that “etc.” bucket needed to be “give ourselves the best chance of maintaining that partner’s traffic by making working with us as lucrative as possible..”

Most affiliates are driven predominantly by how much money they make.  That’s their business, they’re allowed to think that way.  So while you might be hedging against your cash media, it’s also likely that you are not getting the traffic you could.

This isn’t to say you are blind to issues like fraud or attribution.   Not to mention remembering to nurture the relationship, since behind every affiliate name is a person.  But I’d also suggest looking at the value of customers coming through you affiliate channels.  Figure out what margin you’d be happy with.  There isn’t a great reason why that margin should be any different as that from your paid media channel.  Then payout as much as possible.

Once you know that figure, you can test out different payment structures – how much is paid day 1, over time, or even whether you extend lifetime commissions to your partners.

3. Commissions to Sales Reps

I could make the same argument here re: payout amounts as for affiliate commissions above, so I’ll add an additional nuance.

And it starts with a small point I made just above.

Remember:  Your sales reps are people. 

As such, each is motivated by different things.  What you have to do is figure out a model that works for your business and then attract those for whom that model works.

One area where I’ve seen people make huge gains with their salespeople is in creating the right incentives for the behavior and results they wanted to see.

On one side, paying your salespeople too high of a base salary might result in their doing only as much to not get fired.  (You already have this issue with most employees.)  On the other side, if you pay 100% commission, that might mean too much financial stress for your folks.  In fact, I’ve seen businesses put their sales reps on $500 per week for the first 3 months just so they have some income coming in.  But it’s not so unwieldly that it’s a massive risk for their org.  And then I’ve seen these same companies have some high 6-figure and 7-figure earners from their sales department.

To be clear, there is no right answer.  I have some friends who will argue for hours that any commission is a bad thing.  That the best way to get people to deliver their best is by paying only a salary.  Others see that as the worst thing you could do.  You need to find the model that works for you.

My goal here is simply to raise some considerations to help you think through different structures.

As if there was any doubt, sales is a brutally hard job.  More than 50%, possibly 90%, of the time, you’ve just got the wrong person in that role. And it has nothing to do with comp structure.  There is only so much you can do with the comp structure if you don’t have the right people in the right role.

But if you feel like you do, figure out how to craft a model that works for them and the business.

4. Technology

I’m intentionally steering clear about specific tools or technology partners.  Those choices are too business-specific.  Instead, there are a few processes I’ve seen have great results regardless of business type, technology partner, or otherwise.

The Ask

Last month I was a conference where one of my friends negotiated $7K in monthly savings from 2 different partners – his ESP (email services provider) and his ecommerce platform partner.  Better yet, he got those reductions simply by asking.

Whether or not $7K per monthly is a rounding error for your business or a significant part of your take-home, that’s $84K in real savings.  And this was a reasonably low effort way to reduce costs.

My point here is in some ways the same as elsewhere – you should take a regular review of your partner fees.  And sometimes it’s just as simple as asking for a reduction.

Auditing

This is going to sound so obvious, but I can’t tell you how many times I’ve seen it make it a big difference.

On a regular (at least once a year), audit of your technology expenses, particularly those with a monthly plan on a credit card.  It’s likely you signed up for some service (or seven) that was a trial that rolled to full price (you’re familiar with that model, right?).  Or someone who is no longer around put one in place.  Regardless, if no one is leveraging that tool, it’s a waste of money.

Some of these services may be $50 per month, some may be several thousand per month.  For starters, if you’re not using something, cancel it.  Just as important, doing this type of review is a healthy way to reinforce to the rest of your organization that you don’t tolerate waste.

(I’d also suggest doing this with your personal credit card.  I’m guessing you have a bunch of similar types of services that you continue to pay for but haven’t gotten any use in months.)

Post-Mortems

This is by far the most difficult of the three, from almost every possible perspective.  Ultimately, this is about looking back on where you’ve made technology (or frankly other) investments.  Ideally, you evaluate ROI, or at the least, examine how the final costs of certain projects and what you got out of them, even if qualitatively.

Whether in a startup or in a billion-dollar plus organization, people complain about IT.  Tools don’t do what people want. Everything takes too long.  Projects go over budget.

So why does that the adage of “what gets measured gets improved” not seem to apply to IT?  If you’re a performance marketer, then measurement is a hallmark of your business.  And yet so often, whether quantitatively or qualitatively, rarely do we conduct a look-back on IT projects to see what went well (or didn’t) and what, particularly process-wise, can be done better the next time around.

At the least every quarter, sit down with your teams to conduct a formal review conversation.  Leave ego, blame and excuses at the door (I know, easier said than done).  And have some honest and service-driven conversations about how you can maximize your investments in IT, arguably one of the more important enablers (or inhibitors) of your business.

5. and 6. Shipping / Fulfillment

If you don’t ship a physical product to your customers, then by all means jump to the next section.  But I’m going to lump both of these items together here.

A few questions to start.

If you do ship a product, do you know:

  • Do you know your average per order shipping cost?
  • Assuming you ship different products or different configurations, do you know the cost by these subsets?
  • Given that shipping rates are grouped above certain weights, do you know your tiers and have you looked to see if there is a way to decrease the weight of your higher-volume packages?
  • If you ship product to Alaska, Hawaii, Canada or anywhere else internationally, have you examined shipping costs and/or customs and duties fees. It’s possible that customers in these regions are not in fact profitable to the business.

With your fulfillment partners, do you know:

  • The average cost of processing your product through your warehouse partner is?
  • If you have multiple items in an “typical” order, have you explored whether it would be cheaper for your warehouse to pick and pack each order real-time versus “pre-kitting” those orders beforehand.
  • What about storage costs? I’ve got a couple products that I keep at the freight-forwarder at the Port of Los Angeles because their storage fees are so much cheaper than the warehouse’s (or Amazon’s).  I didn’t think storage fees were that big a deal until I got an unwelcome buzz-kill from an invoice late last year.

Or how about something super simple – what percent of your net revenues are shipping and fulfillment?

I’ve got some folks in the physical products space where shipping is ~7% and fulfillment is ~3% of net revenues.  This is such a bad number to compare to because there is no context of their business.  But do you know your numbers?

Getting a benchmark is always the first step towards improvement (“what gets measured gets improved”, right?).  Then, just like all the other parts of your business, it’s a matter of identifying leverage points and working to chip away at them.  Whether it’s changing the way you all operate internally or getting more out of your vendors, you have to put some focus towards these areas.

Even then, sometimes your partners don’t respond.

One of my recent clients had gotten so frustrated with their fulfillment partner that they began in-depth conversations with several alternative vendors.  When they came back to their current partner to talk through why they were seriously considering switching vendors, what became clear was their 3PL’s pricing was actually pretty decent but that their service sucked.  And that was in large part because their left wasn’t talking to the right.  I’ll admit that typically a partner will jump to fix things and then service will fall off again in a short while.  In this client’s case, their current partner, to their credit, has raised and maintained their level of service.  Which is a win for both parties.

Many times, unfortunately, a change is in fact necessary.  And as much as it takes real work to switch vendors, when you know it’s the right thing to do, it’s then a matter of getting it done.  (The same can be said with any relationship.)

Yes, it’s frustrating to have to get to this point, but it all begins with someone having accountability for this part of the business, and then making sure that pricing, service, and anything else you deem important is at the level you demand.  And deserve.

A few other notes here.

Service Levels

Amazon has changed the game in terms of expectations on shipping.  And yet, if you look at a lot of offers running on TV, they rarely tout next-day shipping or even 2-day shipping (which is considered rush).  They can get away with several business days to get their product to their customers.  In part this could be explained because the typical buyer of a TV-marketed product is a bit older, but that can’t explain everything.

Sure, these marketers are likely losing some customers in not offering Amazon-type delivery.  But not everyone is Amazon.  There could be financial, logistics, or technology reasons that limit your ability to get your product to a customer next day.

And you know what? That might be okay.  At least for now.  Because going with a service like Fedex Smart Post, which can take 3-6 days, might be more economical for you.  Even when you factor in the impact on conversion, additional contacts to your customer service department, or to your brand.  But you can’t always optimize for everything.  And at the least, you should be intentional about what you’re doing and know your options.

Direct vs. Through a Partner?

At what point does it make sense to try to negotiate your shipping costs directly with a carrier as opposed to through your 3PL partner?  Many folks manage their shipping agreements through their warehouse partner. At the outset, this is probably a good idea. As your volumes increase, it might make sense to explore what you can negotiate directly.  (I’m assuming that you’re shipping outside of Amazon.)

As a somewhat arbitrary guide, I’d say once you are shipping several thousand units per week, it’s time to have these conversations.

What you may find is that your 3PL, because of the sheer volume they process, gets better rates than you can get.  But it’s possible that:

  • You find that they haven’t negotiated their terms in a while.
  • You might learn about certain fees or services that you were previously unaware of
  • Building the relationship directly might allow you to resolve certain issues in the future, if only because you know the vendor directly. During my time at Beachbody, I cannot stress how important these direct relationships were, even when we continued to work through vendors or agencies.  Simply being able to pick up the phone to avoid any game of “operator” saved us a ton of money, not to mention time.

The worst that can happen is the carrier says your volume isn’t high enough or that your rates don’t change.  But hopefully at the very least, you’ve started to build the foundation for a direct relationship.

One Warehouse or Multiple Locations?

Here are some of the considerations to answer that question.

  • First you need to know the current geographic distribution of your customers.
  • Once you have that, then it’s a matter of understanding shipping cost by zone (how far away from your fulfillment center you ship to).
  • Does your current 3PL actually have multiple locations?
  • What is the net additional inventory position you’ll have to have in place, and what is the financial exposure of that additional inventory? (It’s never a matter of splitting up your existing inventory evenly into the new warehouses. And since inventory = working capital = cash, that isn’t a no-brainer decision for anybody.)

Multiple warehouses may not be applicable for all businesses, but it might be worth looking into.  It might mean net additional inventory and some additional costs with your current 3PL.  It might mean exploring a new partner.  It also might mean lower shipping expenses and few customer service inquiries.

7. Product Costs

Beyond the “ask for a discount” point I’ve made arguably too many times, let’s talk about China.

Conventional wisdom used to be that manufacturing a product in China is cheaper than producing it in the US.  I’d suggest that in many cases that is correct.  But I’d also suggest that it doesn’t capture the fully-loaded cost of delivering a product to your warehouse.

In particular, it misses the cost of shipping your product across that big ocean over there.  If you were one of those unfortunate folks who got caught out when the Port of LA workers went on strike last year, it also misses the cost of being out of stock.  I know of too many 8- and 9-figure businesses that lost millions in sales because their product was stuck in a container.  They literally couldn’t access it even though it was in port.

In addition, when you manufacture in China, you have to consider a couple other items: 1) a month off for Chinese New Year (sure, it’s not a month-long holiday but the effects are at least that long); and 2) shipping via boat is a lot cheaper than via air.  But it’s also a lot slower, so you’ve got a time-in-transit issues to content with.

Finally, know your customer.  In some markets, being able to say “Made in the USA” can be an important marketing tactic.  In others, no one is paying attention.  Or maybe no one has suggested that the customer pays attention and it can turn into a competitive advantage for you.

If there’s one theme that has resonated throughout here, it’s to make sure someone has done the diligence to explore alternatives.

8. Customer Service

Let me start with here with a sampling of metrics with which to manage customer service:

  • Customer Satisfaction (CSAT) / Net Promoter Score
  • Contacts – phone, email, chat
  • Total costs
  • Cost per contact, cost per initial order
  • Calls offered / Calls Handled / Abandonment rate
  • Speed of Answer / Avg. Handle Time / Avg Talk Time
  • Calls answered within SLA’s
  • Disposition Reports – reasons for calling, reasons for cancelling
    • Wizmo (“Where’s my order”), refund request, continuity cancel, escalation, etc.
  • Cancel-Saves
  • AG / BBB complaints
  • Revenues / Margin generated and vs. costs
  • Reship rate

That’s a lot there.  But I find that customer service is one of those areas that needs a particular form of structured metrics to best manage it.  Not to say that the numbers are the only way to manage customer service.  But when you look at that list above, you realize just how much specific information you can have about the performance of your call center.  And that makes identifying areas of improvement that much easier.

Sales vs. Care

Perhaps one of the most important points I can make about customer service is that reps who are great at customer care are not the same ones who are great at sales.  Sure, there may be those edge-case examples of reps that can do both great.  But it’s crucial to approach the call centers differently.

Everyone should be customer-focused.  Everyone should have a sensibility for brand.  Everyone should be aligned with the company values.

But make no mistake.  A sales floor and a customer service department are fundamentally different environments, with unique cultures, and frankly with entirely contrasting personalities. 

So much so that you may want to change how you funnel certain types of customer service calls.  For example, I’ve tested sending continuity cancel calls to sales reps instead of customer service reps.  And found that in most cases, the sales reps do better.  Even after factoring for follow-up calls, discounts, and refunds.

At the same time, if you put a sales person on a customer service floor, 99 times out of a 100 they will not succeed.  This isn’t a criticism, nor a character flaw.  Plain and simple, it’s about putting people in the right roles.

Final Thoughts

I’ll go back to what I said at the beginning.  Without sales, cost optimization is generally moot.  But once you’ve achieved a certain level of scale, your business demands it.

And as the business grows, presumably you are bringing in specialists to focus on various parts of the business.  Task them to set benchmarks and then to work to improve their business area’s performance.   Just as you would for the seemingly sexier parts of your business, like media and revenues.

When I read the book “The Millionaire Next Door,” I remember one big lesson loud and clear.  That there are two components to a P&L.  Revenues. And Costs.  Ignoring the latter can make all the front-end work you do go for naught.  Not to mention, managing the latter can mean less pressure on the front-end.

And managing both revenues and costs?

That’s where scale really happens.

 

 

Consumers Love Watching Experts – See What Others Are Doing to Better Their Customers’ Experience

Consumers love to watch experts showing off their skills.  Some skills, like sports, are more mainstream than, say, being able to navigate Excel without a mouse (like your truly, ahem, ahem).   Any glance at YouTube shows not merely the diversity of expert skills that exist in this world, but when looking at the view and subscriber counts of some YouTube channels, the sheer *interest* in their respective categories.

This concept shouldn’t be news to anyone who has been paying attention.  But connecting the fact that consumers want to watch experts with a business’ desire to build a brand hasn’t been as pervasive as you might expect.

Why don’t more businesses tout their expertise in a demonstrable way that customers can benefit from?  Why don’t they create more content – not just any content, mind you, but content showing off a level of know-how that consumers would envy?  Especially when doing so would result in a more engaged customer.

When you buy a desk, it doesn’t require any expertise to use that desk. However, some products and services require, even depend upon, specialized skills and knowledge. Particularly when a product requires customers to use it to achieve a goal (whether cooking, weight loss, building something or otherwise), watching an expert apply their skills can help customers achieve their goals and can be a fun aspect of the customer experience.  Or, sometimes we may not want to do-it-ourselves, but merely want to observe, enjoy, appreciate and sit back in awe of an expert.

Anytime we can get customers to spend their time watching one of OUR experts is a win.  It means we have their attention, it means we are doing something of interest to them.  In a very specific way, we are being of service to them.  And it means that we are building a connection, positively affecting their experience with the business.

Though there are a few ways to allow customers to see an expert’s skills, the most effective is through video or an in-person demonstration.

Benihana: Fun with Cooking

Benihana restaurants have been serving and entertaining guests for over 50 years.  If you’ve never been there, the basic concept is that guests sit around a teppanyaki table, which is basically a flat grill.  The chef prepares the food in front of the guests, cooking up everything from shrimp appetizers to steak and seafood entrees.

Making food in front of patrons may not seem like a big deal – be that a sandwich at Subway, a salad at Sweet Greens, or sushi at Nobu.  But Benihana was one of the earliest presentation-style restaurants, bringing with them an entirely new dining experience.

The big difference with Benihana was, and still is, the way their chefs interact with the customers.  To start, they all have phenomenal technical skills; watching a chef at Benihana clean and cut up shrimp at the pace they do is harrowing and awe-inspiring.  But it’s the real sense of entertainment they bring that is the real differentiator.  We’ll see this below with Twitch, in a totally different genre like gaming, but when technical skill is matched with an engaging personality, that is when the real magic happens.

Each chef brings their own sense of flair.  Some may flip the food perfectly onto a guest’s plate, others create a tower of onion rings that smokes when they pour oil into it, and some crack jokes.  The goal is that Benihana is part dining experience, part theater.  And when you are watching a chef wield obviously sharp knives in the manner they do, combined with a sense of flash and personality, Benihana has made a name for itself in what a dining experience can be.

I’ll say from my own experience that I’ve never left Benihana disappointed with the food.  But I have left disappointed with the experience.  Like every business where a certain level of personality and creativity is involved, consistency is a very difficult thing to maintain. I recall a visit to New York City where I felt so rushed that I didn’t get to enjoy the time at the table didn’t get enough time to watch the chef do his thing.  Another time I had a chef that just didn’t engage with our table.  It felt like the blackjack dealers in Vegas who simply deal and don’t engage with the guests; whether you win or lose (more often the latter based on the odds unfortunately), guests want to have fun playing.   With Benihana, it’s the same thing.

I only mention the sense of disappointment I felt because it reflects the standards which they had previously set.  Guests have a certain measure of expectations when they go to Benihana.  Most of the time, their chefs nail it.  It’s one of the primary “why’s” of why you go to Benihana.  Guests can get great surf and turf many places.  But they go to Benihana for the experience.  They go to watch a chef do what they can’t.  In an entertaining way.

Twitch: Watch Them Play

The gaming site Twitch shares many similarities with Benihana in the experience they both aim to craft with their respective audiences.  In allowing viewers of their site to watch someone play a video game, Twitch may at first seem like the virtual equivalent of a bunch of friends playing games and hanging out on the couch.  Except that it’s not simply a few friends but can be hundreds of thousands watching a single player.  And just as playing at home with friends is a lot more fun when there’s a level of engagement between players, the most-viewed and followed gamers on Twitch are those who are not just great at the game but know how to engage their viewers well beyond what’s happening in the video game.  What they say and how they interact with their fans is a key aspect of why fans watch some players over others.

For some context, Twitch was acquired by Amazon in 2016 for one billion dollars. As with so many things gaming these days, there’s a lot of money in this business.  Currently, the top player is twenty-something Tyler Blevins, who is known to his fans as Ninja; Blevins is currently making $500,000 a month, in large part from donations that fans can make on Twitch.  Not only does he show off his technical skills while playing, but he also brings an engaging personality. Ninja interacts with his audience, speaking to fans and creating a real sense of community. Twitch makes this possible.

It might seem crazy to some that so many people would sit on their phone or in front of their computer to watch someone with whom they have no direct relationship play a video game.  But this misses two key points.  First, many of those who are gaming fans grew up watching their friends play videogames.  For them, Twitch is an entirely normal thing, albeit online rather than in person.  And second, gamers such as Ninja, who are masters at games like Fortnite AND who have an engaging personality, have connected with their audience to make it feel like there is in fact a direct relationship between the two.  Fans of Ninja feel like they know him and feel like they are right there with him as he’s playing.

In Twitch’s case, some viewers watch because they are fans of the game the player is in, and there’s a certain level of appreciation they have for the skill.  Others just want to be entertained even though they may not fully appreciate just what level of skill is involved.  Regardless, Twitch has created an immensely valuable platform where experts, both in a game and in entertainment, can draw others in at huge scale.

Home Depot: Free Classes to Help You Do-It-Yourself

Years ago, hardware stores were places where shoppers could get some of the basics, and perhaps some of the more advanced repair and construction needs.  While some professionals would frequent a local hardware store, most customers were individuals wanting gear for their home or office, but primarily for more minor work.  When contractors or those in construction needed to make more substantial purchases, there were stores that serviced them more readily.

And yet, if you enter a Home Depot today, it’s common to see people of all types – from those who need a basic screwdriver to a contractor buying goods for a current job to a hobbyist buying the same goods as that contractor.  Do-it-yourself is not a new thing.  People have been gardening, fixing dishwashers, or building decks in their homes for years.

What has changed is the number of non-professionals doing so and the scope of the projects they are tackling.  For its part, Home Depot has helped with this shift by hosting classes in its stores, allowing all-comers to attend, ask questions and learn.  It’s a brilliant strategy – if people understand what it is they need to do (and certainly what they need to buy) to redo, for example, the flooring in their bedroom, they’ll have more confidence.  They are then more likely to purchase the equipment the need to do so, and it’s much more likely that those purchases will happen at Home Depot if the classes are there.

Sure, people can and will continue to hire contractors and handymen, so it’s possible to argue that from Home Depot’s perspective, so long as *someone* is making the purchase, they are indifferent about who that person is.  But for many consumers, given that one of the largest cost buckets in this type of work is the actual labor, the difference between doing the work and not doing so may be that cost of labor.  So if they can do it themselves, then those are purchases that Home Depot likely would not have gotten.

In its own way, Home Depot has developed a content strategy that brings consumers into its stores, educates them on what’s involved in a project, and then makes it simple to purchase the necessary equipment for that project.

For all the talk around content marketing, particularly in digital marketing, isn’t this what valuable content should deliver?

Home Depot experts certainly provide similar content online, but this has been a core strategy for Home Depot for years, whether offline or online.

Red Bull: Watching Others Do What Most Wouldn’t

The fact that Red Bull created an entirely new business unit, a media company, tells you a great deal about what they’ve been able to tap into.  When you think about Red Bull Media Group, it’s easy to forget that Red Bull is a beverage.  The Media Group is very much aligned with the overall Red Bull brand, reinforced with its original tagline, “Red Bull gives you wings.”  The message Red Bull conveys through its videos is about pushing boundaries, which unifies with the theme of giving people wings.

Ultimately, though, Red Bull’s videos feature extreme athletes doing amazing things—the kinds of things most people might never attempt on their own. Customers don’t necessarily watch these experts because they intend to emulate them. Rather, they watch them to feel a sense of awe and amazement. In Red Bull’s case, there is less a sense of education or aspiration they are necessarily trying to deliver to their viewer.  It is much more about entertainment.  And certainly, of people doing things that represent what the brand is trying to help everyone achieve in their own way.

For its part, Red Bull’s “experts” showcase a message that supports the overall company’s brand.  They are the most extreme version of what they are trying to provide, inspire and support with their customers.  When you watch a Red Bull video, you can’t but feel blown away, sometimes scared.  But in that moment, there’s a sense that so much more is possible.  And that is a powerful feeling to deliver to people.  It’s what Red Bull’s “experts” help to communicate to viewers.

Your Customers Want to Watch You

Seemingly every business should include some component of “watching an expert,” whether through in-person demonstrations or some other technique. You could be selling a product (physical or digital) that requires skill to use.  There might be ancillary skills related to your product (think workout programs produced by a supplement manufacturer).  Ultimately, what is the reason people are buying your product? And then what type of useful, educational, and/or entertaining content can you create to connect with their goals?  However you choose to incorporate it, whether through video or in person, it will strengthen your customers’ sense of connection with your product or service.

Customers who are better connected to a business are more likely to buy again and more likely to tell positive stories to others.  Each of those helps to build the business and to build the brand, both of which are two primary goals of most businesses.

Your business has experts that your customers are envious of.  Show them off to your customers.

Serving the Underserved Creates THEIR Experience

In a literal way, inclusivity is the opposite of exclusivity.  And so, while being exclusive means something is for a select group, inclusivity, particularly for marketers, doesn’t necessarily have to about trying to include everyone. At times, companies can simply target people who have been underserved.  Especially when we think about one of the big no-no’s in marketing – that of trying to be all things to all people – it’s important to understand this distinction and not make the presumption that inclusivity is going against that adage.  The below examples demonstrate how engaging and enrolling audiences that have been ignored, in a sense crafting a great experience for the underserved, can yield great results.

Sephora: Clueless Shoppers are Welcome

Plenty of industries are filled with employees who like to make sure (potential) customers know just how “knowledgeable” the employee is, often at the expense of the customer.  For my part, I grew up a cycling fan and wouldn’t have enough time to list off the number of times I felt so belittled because an employee in a cycling store was seemingly offended by what he considered an offensively-simple question.

The beauty industry has a similar dynamic.

For its part, the beauty brand Sephora has done an exceptionally good job of making the beauty-shopping experience actually feel inclusive, not snobbish. Blogger Alicia Jessop has described Sephora as the equivalent to women of what a hardware store is for many men[1]. Just as men often go into hardware stores and browse without having any specific product in mind, women often shop at Sephora with that similar sense of discovery, exploration, and accessibility.

It’s fair to say that most everyone has gone into a store where there was a certain product domain they knew nothing about, then either tried to portray they knew something they didn’t, or they didn’t want to acknowledge that they knew nothing.  Unless we are just plain lucky, it’s a rare occasion that we leave with the right product and certainly none the wiser.

One of the primary reasons we as consumers behave this way is an expectation of how the “expert”, in this case a store employee, is going to respond.  Prior experience has led many of us to be intimidated in environments where there is a lot of domain expertise or technical skill.

But Sephora, while obviously not perfect, mitigates this effect in several ways.

The most obvious way is the store layout.   Unlike department stores where all the merchandise is behind a counter and only accessible by employees, Sephora has put product front and center, so that customers can touch and try products without having to ask anyone.  There is no gatekeeper to get past or to ask what might be an ignorant question.  Instead, customers have free reign to products at Sephora – to touch, hold, and try at their leisure.  This may seem like a minor detail, but given the department store dominance in beauty and just the fact that a customer doesn’t have to speak to someone to try something that grabs their attention – these have been big changes in the beauty industry.

Next, when customers do need help, Sephora staff are there to serve them.  Training is an important aspect of Sephora’s employee onboarding, whether on the customer service side or the technical side (how to help a customer select makeup that suits them as well as applying it).  Training is done at the store level but also through Sephora University, the center for the company’s training.  While creating its own training center, aka the University, is an advantage that a massive company like Sephora can afford to do, putting attention to how employees treat customers is something that any business can do, whether big or small.

It’s important to acknowledge that no business is remotely perfect. In researching Sephora, there were plenty of examples I heard about sub-par, off-brand experiences.  Particularly in retail, where the inherently imperfect human interaction drives a good part of the experience, perfection isn’t the goal.  Being a ton better than everyone else is.  On a consistent basis.  At the same time, setting up aspects of the business, such as the store’s design, that are not dependent on how an employee chooses to behave, can shift that burden and reinforce the bigger experience that is trying to be delivered.

As we all know, a company’s brand isn’t simply created from one component of the business.  It is built everywhere.  And in Sephora’s case, creating a welcoming, interactive and fun environment, whether through the store design or its employees’ attitudes, has been a key to their success.  It affects customers in the store, their likelihood of making a purchase, and certainly the stories they tell (primarily positive in Sephora’s case), which drives the chances they return and/or how they influence others to do so.

Gwynnie Bee: Serving Plus-Sized Women

When the apparel and accessories business Stitch Fix launched, they initially didn’t target plus-size women (anywhere from size 10-14 and up, depending on whose arbitrary definition you want to choose from).  It was a business decision that Stitch Fix (a former client of mine) made, amongst others that also included not serving men or kids, all of which they do now.

This isn’t about right or wrong for Stitch Fix, but their success and focus on its core group of customers, meant that there were opportunities for others to target those that weren’t being served.  Stitch Fix was not the only subscription business focused on delivering these same products to women, but in being one of the earliest and certainly the largest (most recently topping $1 billion in revenues and 2+ million active clients), who they were and were not serving was much more visible.

So as Stitch Fix was building its business, and to a certain extent educating the broader market on what they offered, Gwynnie Bee launched at a similar time, exclusively serving plus-sized women. Not that Stitch Fix played into the stereotypes that are all-too-often found in beauty magazines, but the fact that they didn’t stock apparel for plus-size women gave Gwynnie Bee the opportunity to highlight how it was differentiated from the category leader in Stitch Fix.  Gwynnie Bee was specifically offering clothes for a group that are not always served by apparel retailers.  To this day, beauty magazines constantly reinforce the idea that skinny is better.  To its credit, Gwynnie Bee embraced its target customer, and didn’t try to show size 2 women on its site.

Body image is admittedly a sensitive topic; and yet from a practical side, the reality is that many women in the US fall under the plus-sized definition.  So while Gwynnie Bee was targeting an underserved and perhaps niche category, theirs was by no means a group with small numbers.

(It’s interesting to note that Stitch Fix eventually did serve plus-size women, in addition to men and children.  And Gwynnie Bee announced in early 2018 that to be considered truly inclusive, they were not remaining exclusive to plus-sized women.)

There are plenty of other examples on servicing what isn’t considered mainstream; certain shops target “big and tall” men, some restaurants are “family friendly,” while others are clearly designed for couples.

In all of these cases, whether Sephora, Gwynnie Bee, or others, inclusivity isn’t about trying to be everything to everyone. It’s about targeting a particular group of people, especially those who may be underserved.  And then making them feel warm, understood, and served in the manner which we’d all want to be treated.

 

[1] Jessop, Alicia. “What’s Good Wednesday: Why Women Love Sephora.” https://aliciajessop.com/2012/08/22/whats-good-wednesday-why-women-like-sephora/ August 22, 2012.

How Harley-Davidson and The Beard Club Use “Identity” to Build Customer Experience

(Note: This is one of a series of posts to come around the various ways that marketers are crafting incredible customer experiences.  In so doing, they are dramatically improving their customer retention and acquisition efforts, and concurrently building their brand.)

One of the most powerful ways to build customer experience is by tapping into raw human needs and emotions.

A person’s sense of sense, their actual, perceived and desired identity, is one of the more raw and powerful needs to connect with.  Many businesses have done an excellent job of using their brands to help customer’s think differently about themselves. When done well, customers are proud to be associated with the brand and willing to show off that association in public. They begin to think of the brand as more than just a product. It becomes part of who they are and, even more powerfully, a reflection of who they want to be.

Of course, a business can use the power of identity in a negative way, manipulating customers through psychological games, but the examples shared in this section come from companies who are using this power in positive ways.

Harley-Davidson: More than a Motorcycle

Harley-Davidson has become one of the best-known brands in the world, in any category. People with absolutely no interest in motorcycles have heard of them and already have a clear sense of the brand’s distinct identity.

While most people associate motorcycles with younger demographics, the average Harley owner is forty, not old but certainly not a 20-something thing.  This is due in part to the bikes’ cost; they aren’t cheap.  But if you’ve ever met a Harley owner, however, you know they tend to be extremely proud to be a Harley owner. They love to show it off, and “owning a Harley” is a key part of many owners’ identities.  They’re didn’t merely purchase a motorcycle; they became a part of a vibrant subculture.

The bikes themselves are loud, brash, and bold. You know when a Harley is moving down the street, and their owners rather enjoy that the bikes aren’t subtle.  They didn’t join a membership where the card gets tossed in the trash nor is kept quiet.  While it may not always be through their spoken words, but Harley owners scream being Harley owners.

One of the company’s biggest achievements has been transforming their product into more than a product. People know what Harley stands for: freedom, community, and a certain rebellious attitude.

Their website says it more directly, “If you want to fit in, take the bus.”

From a purely technical standpoint, there are probably better motorcycles on the market. However, Harley customers aren’t in it for the technical quality of the product. They are embracing the Harley attitude.

And for its target customers, Harley is giving them exactly what they want in terms of identity. For people in their forties and fifties, many of whom are empty-nesters, and some of whom are struggling through or approaching a midlife crisis, Harley restores for them a sense of youthful rebellion. Riders are able to detach from their jobs and the concerns of their daily lives to take to the open road with a sense of freedom.

While it’s hard to point to a single moment where the brand that had often been associated with the Hell’s Angels and featured in films like “Easy Rider” started attracting a growing following amongst older and more affluent customers (the average age used to be 32 and now it’s in the 40s, with average annual income increasing from $30K to $70K+), what is clear is that once the company noticed the CEOs, bankers and celebrities were taking to their bikes, they leaned in.  (As an interesting side note, back in the early 1900s, Harley target farmers, then in the mid part of the century positioned itself as the bike for police officers.  To say the brand has evolved and changed its targeting over time is a minor understatement.)

As an example of how the company has leaned in towards shifts in its customer profile, customers choose Harley-Davidson motorcycles because of how they feel and how they want to be as an owner.  One way to amplify that feeling is by joining with others.  Riding a Harley with others is a big part of being a Harley owner, and the brand encourages such connections with what they call H.O.G. (The Harley Owners Group).

H.O.G. was started in 1983, and today there are over a million club members. It’s the biggest factory-sponsored riding club in the world, and while many people think it’s managed by customers, each club is actually sponsored by a local dealership. In the past, dealers could only sponsor one H.O.G. each, but now they are allowed to sponsor two.

This is a great example of a brand recognizing what their customers would want, well beyond the basic “product,” and then creating opportunities to help their customers feel even more strongly about themselves and the brand.

From a financial side, this of course drives retention in the form of merchandise sales (I think we’ve all seen how decked out Harley riders can be) and certainly additional bike sales.  That image and brand story that is then told – whether by hearing an owner talk about it or just seeing them riding down the road with others – no doubt leads to future customer acquisition.  In fact, the company used to spend very little dollars in advertising.  But that didn’t mean spending nothing on marketing.  Their spend would show up in efforts like H.O.G. and other ways to support their customers.  How’s that for a different take on marketing? And all the while the brand continues to form, evolve, and grow.

The Beard Club: Are You Man Enough?

The Beard Club began life as Dollar Bear Club, introducing themselves to the world through a video featuring the company founders, Chris Stoikos and Alex Brown, along with the rest of their team. Through that first video, as well as subsequent ones, they have tapped into something deep in the psychology of their target audience.

They aren’t the only company providing products for men with beards, but in each video, they have created a strong sense of what it means to be a man with a beard. They show images and tell stories of bearded men doing cool things, elevating the image of manhood in a positive way. On their website, they even ask the question, “Still don’t think you’re man enough?”

It’s interesting to note that their videos speak both to men who have beards and work to instill a desire to grow one for those who don’t.  For bearded men, they’ve created what Seth Godin loves to describe as a “Tribe.”  The Beard Club wants bearded men to know they are being spoken to, to know that there is someone who understands them.  And The Beard Club wants bearded me to think about themselves differently, as particularly proud not just to have a beard on their face but to remind them that having a beard means being special and different.  (Whether this is “true” is irrelevant, it’s the message the brand is telling.)

Their message is also aimed at those who don’t have a beard, to say, “This is what you could have.  This is who you could be.  This is the life you could live if only you had a beard!”

Of course, any customer knows that having a beard isn’t a magic ticket to a wonderful life. The message is clearly tongue-in-cheek, but it still creates an identity that many men crave. Not only does it create a sense of aspiration, but it offers accessibility: “All this can be yours!” It could even be considered a call to arms: “If you don’t have a beard, grow one!”

What I find helpful in looking at The Beard Club vs. Harley-Davidson is that while the latter used its marketing dollars outside of pure advertising, the videos in which The Beard Club uses this strong sense of identity are primarily customer acquisition vehicles.  Sure, they help reinforce the brand message to existing customers.  But many of these videos are primarily used to bring on new customers.  And for those who lean more towards the performance marketing approach, crafting an experience using identity is no longer something vague but can be integrated with the same data-driven approach, but just done from a creative side to intentionally create an experience, even before someone has become a customer.

Who You Are, Who You Aren’t

It’s important to recognize that Harley-Davidson and The Beard Club have a well-defined target customer. They don’t try to be all things to all people. If the leaders of Harley-Davidson decided tomorrow to target a completely different demographic, they would need deliver their experience in a different way. That’s the key. The product would be essentially the same, but the experience around it would change in order to target a different type of customer.

That is perhaps an obvious but crucial aspect of tapping into identity.  And that is in being crystal clear of who your target (and existing) customer is, what they value, what you can offer them that is a clear point of differentiation, and that you can deliver on that message.

Some businesses try to create a sense of identity, but they fail to go deep enough. They don’t speak loudly enough about the identity of their brand because they don’t want to alienate other potential customers.  In the early stages, as a few different demographics are being tested, this approach might make sense.  But over time, not going deeper can mean a weaker connection with customers.  Yes, it means making a tradeoff and likely turning away a demographic, but brands that seemingly go all-in by speaking loudly to a specific target customer do better than by trying to speak to everyone.

And that is in part because that specific customer wants to be treated a certain way.  Unless there can be very clear segmentation within groups, trying to speak both to married women over 40 and single men in their 20s is very very difficult.  The language, imagery, tone, messaging, etc. should be different for those two groups.  So as much trying to straddle a couple worlds may feel like neither is alienated, it also means that neither get the sense that the brand truly understands them.

As you consider your own business, do you have a clear sense of who you are and who you aren’t? Are you clear on who your customer is, at least for 70% of the business?  That’s the group you should be directly all of your messaging to.  That is the group to see how you can connect with their sense of identity.  Whether in the form of reinforcing what they already feel or creating a sense of aspiration based on who they are or want to be.  And whether that shows up in strategic marketing efforts, in Facebook video ads, in the product or service you deliver, or anywhere in your business, being able to tap into someone’s sense of self can be one of the more powerful ways to build that customer’s experience.   One of the big wins we can have as marketers is for customers to tell stories about our brands.  And yet when that story is an outgrowth of their identity, it carries a much greater sense of impact and authenticity.