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David Johnson

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Forget ROI, What Is Your 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?

Brian Pasch
I love the concept of an Enchantment Budget. Bravo!
David Johnson
Thanks Brian, I understand that this sort of thing is super grandiose but can you imagine the impact something like this would have on a dealership?
Brian Pasch
Going the extra mile and being creative does not have to be expensive. Your ideas are not grandiose at all, when you consider what dealer's advertising budget's spend to get one customer to buy a car. People's lives have been changed with a simple task of me sending a friend a book to read with a personal note. I can testify to that personally from books that friends sent to me as well as many stories of people I have touched by sending a book that I thought they would enjoy.
David Johnson
That is true! I remember doing the same for a customer of mine, when I was selling Fords. He was a cabinet maker and I found a good article that pertained to him in a magazine, I ripped it out and mailed to him with a little note attached. He called me a few days later and he bought two more trucks for his business from me and became a great bird dog.
Jim Bell
Good stuff David. I'm with Brian and like the 'enchantment budget.' I too have sent articles to customers that I have come across that I knew that they would enjoy reading and have had great response. It's all about the experience with the dealership and the salesperson that will make you stand out and they will keep on coming back to you in the future.

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