Establishing a Customer Loyalty Strategy with WSI’s Jason McCoy

Greetings everybody, welcome to the Wednesday, May 20th, 2020 episode of Free Webinar Wednesdays. This is Eric Cook over here at WSI Digital where we work with our customers and helping them engage and connect with their clients online. Hop out to poweredbywsi.com to learn more about us and all the fun stuff we get to do. on a day-in and day-out basis, primarily focused on serving those folks in the community banking industry. So check us out at poweredbywsi.com and visit and say hello. This week on the show is a continuation of prior shows focused on WSI's 3rd edition of our best-selling book called Digital Minds. We are super excited that it is out, it is available, you can See there's a hyperlink there in the introduction on free webinar Wednesdays dot com if you'd like to hop out and grab a copy at Amazon. It's available in Kindle and regular, but we've subchaptered or I guess subtitled the book A Strategic Approach to Connecting and Engaging with Your Clients Online. And we've had I think this will make the eleventh author and twelfth guest, although wasn't part of the official chapter. Because we've got 12 chapters. Last week we did a session where Val and Cheryl from our corporate office— Valerie Brown DeFour is our president and Cheryl Baldwin is our director of marketing. Valerie actually wrote the introduction, which is not really one of the 12 chapters, but it's the 13th element of the book itself. And that recording is available at Free Webinar Wednesdays. But Talked about just the whole shifting change in customers and how that's even changed even more so since we pushed the book out due to COVID-19 and how everybody is sheltering in place and spending more and more time online. And so I would encourage you, if you weren't able to catch that show live, to hop back out to freewebinarwednesdays.com. And if you scroll down, the recording from today's show with Jason will be posted there as well. But you can see we've got the recording from Val and Cher or Cheryl's conversation from last week there. So some really good stuff. As I have obviously disclosed, today's show and all shows are recorded, made available on our website, so stop out and check it out there. And anybody that is attending today's show live, we would strongly encourage you to chat and interact and say hi. We, we love the live component of our webinars and some of the Some of the time you'll get to hear me even step on my own tongue and say things not necessarily the right way. But again, that's the joy of a live show. But during today's discussion, if you've got a comment or a question or an observation and you'd like to share it, please feel free to use the chat function in your control panel, and I'll be monitoring those during today's discussion. So without further ado, I am going to work my little magic and send Jason McCoy, who is a colleague of mine. We're practically neighbors. I reside here in Michigan. He's just outside of Chicago. So we're a couple-hour car drive away. Although we haven't done that yet, but I can tell you the next time I'm in Chicago, I'll keep that on my list of phone calls to make. And we can let our significant others maybe go do a little shopping and find a nice place to grab a drink or something. But Jason McCoy is a fellow fellow author to our 3rd edition of Digital Minds, and he wrote the chapter on establishing a customer loyalty strategy, which I suspect even in the evolutionary process of COVID and being able to interact with customers primarily in a digital world is even more of a challenge, yet even more of an important thing that we all need to be thinking about. So Jason, I'm gonna actually shut my mouth and allow yours to open, pass the microphone along to you, and And just say thanks for joining us on the show today and looking forward to what you have to share with us over the next 55 minutes. So let's get on with it.

All right. Thank you, Eric. I appreciate it. I kind of feel like I've actually been talking all day myself. This is my 3rd video conference this morning. So I appreciate it.

Sign of the times, right?

It is. Absolutely. I appreciate the invite, and I'm looking forward to talking to you about this. This is something I'm a little passionate about, which is why I requested to be able to write this particular chapter. So without further ado, I'm gonna jump to my next slide. Unfortunately, you have to see my face. I apologize for all of your monitors. I am outside of Chicago in Aurora, Illinois. My background's pretty varied. I have an industrial engineering degree. I spent a lot of my formative years fixing things. I enjoy that. And then I decided that as I was progressing through my career at AT&T, or Ameritech, SBC, and then AT&T, that I really liked the concept of softening some of my skills and working on some marketing. So One of the aspects I enjoyed of my background was the fact that I could still fix things, but I was fixing products as opposed to fixing operations. And I did that for a long time at AT&T, working on broadband services and products. And then ultimately, long-term, I spent the vast majority of my last few years at AT&T working on their consumer products, and I ran one of their business units called Connect Tech, which provided subscription-based computer home networking and computer support to individuals and small businesses throughout the country. I left there in 2016. I started my own business at WSI, so I run WSI QCM Solutions. Outside of Chicago, I have territory from southern Wisconsin through northern Illinois and into south— or I'm sorry, northwest Indiana. Excuse me. I do a lot of work on customer experience. I pride myself on focusing on customers and ensuring that customers are getting what it is that they're asking for. I think that's the vast majority of what puts us into business. And sometimes we, in the grand scheme of things, tend to forget that because we're focusing on bottom line. But it's been my belief throughout my career that if we don't focus on the customer, we don't really have a business to start with. So we better keep them happy. And it's, you know, it doesn't always work. I mean, I have been guilty of losing my focus on the customer occasionally, but whenever I need to recenter, that's really where I tend to go. So with that—

You know, you— let me just— a quick observation. You made a statement and I I finished it in my head and thought that you were gonna go there, but you made the statement that it puts us in the business when you were referring to customer loyalty. I thought you were gonna say, but it could also put us out of the business if we don't take care of it. And like you, there have been instances in my world where maybe I've not done as good of a job, and it's unfortunate that those things happen. But you got to take your lumps and move on and learn from it. And at the end of the day, that customer loyalty, that customer experience is going to percolate back up to the top. And you just got to make sure, I think, every day to put that at the top of your list as to what's important.

No, you're 100% right. And that is normally how I finish that. So you did the right path. They're why we get into business, and then they're also why we get out of business sometimes too.

Yep.

By choice, or sometimes by their choice.

Exactly.

So on our agenda today, we're going to talk a little bit about customer loyalty and how does that work. We'll talk, um, the customer experience and why it's important. Um, then we're going to finish by doing a little bit of measuring. I, I promise to keep the math on the low end. today because I know it tends to bore people, and then we'll open it up for Q&A, although I know Eric is intending on interrupting and asking questions where points need to be clarified throughout. So please continue to chat in the background, and, and I'll be happy to stop where I need to put further emphasis. All right. So as Eric said, this is a continuation of his series on the Digital Minds book, the 3rd edition of WSI's Digital Mind book. This is a slide that was utilized last week by Cheryl and Valerie. I put it in here because it's a nice way for me to do a transition. So establishing a customer loyalty strategy, the key learning is keeping your customers loyal to your business is incredibly important. It's primarily just as important as getting those customers to your business in the first place. I'm going to talk a little bit about the cost differential between acquiring a new customer and maintaining an existing customer. Loyal customers provide repeat purchases, obviously, referrals, and valuable feedback. The valuable feedback is the part that a lot of businesses don't take advantage of. Successful businesses take advantage of that, and I'm going to encourage you throughout, and especially as we start to get into measuring the value, to take advantage of what your customers are telling you. Everyone wants to put testimonials out on their website or within their Google My Business section, and that's great, but what we don't do is take advantage of some of the constructive criticism that can be put out there as well. And how does that impact our business and how can it help us grow? COVID-19 considerations— I'm not going to talk Terribly heavy on that because frankly, I think that was done a lot last week. But what Eric mentioned earlier is if we're not taking advantage or taking— not taking advantage, excuse me— taking advantage of our customers' information and providing good, solid information to our customers during this timeframe, They're not going to see the value that we're providing. So we are encouraging, and we should encourage everyone to provide necessary touch and feels back and forth between you and your customers. If they know you're there, they know you're a support agent, they're going to continue to see value in you. When they don't see value in you, that's when they start to look at you as You're just another line item on their expense ledger. You don't want to ever be looked at like that, even though we all technically are. You want to ensure that you are more than just an expense item. So customer, I've already said it once, it's your most important asset. If you don't have a customer, you don't really have a business. You may have the best product, but if you don't have a place to distribute that product or someone that wants that product, you're not going anywhere fast. So your customer should be looked at as your most important asset. But what's customer loyalty? When you look at all of the different businesses that are out there, and this is just a smattering of different businesses, most of them larger business, and I know we're talking smaller business today, When you look at all the different businesses that are out there, every single one of them wants to attract a customer. What sets you apart? Why should they be loyal to you? That's the critical nature of your business. Yes, you might be local, and yes, that might be interesting to your existing clients, but the mo— as we're going to talk a little in a little bit, The more you provide benefit to your customers, the more they're going to be engaged with you. Some methods to lure your customers, right? There's obviously low cost. Walmart's a significant player in that. They do that very well. Reward programs, those are really good too. Marriott Bonvoy is an example of that. There are several reward programs that have come into and gone right back out of circulation because reward programs, as we're going to talk in a little bit, tend to be very difficult to maintain. Because a reward program by its nature is rewarding a customer for just buying from you. But if all they're doing is getting rewards, they're not really— they're not really getting that feel from you. They're just seeing a dollar sign, or they're just seeing that line item. They're not getting to know you. Limited availability— Goose Island Bourbon County is an example of that. If you drink limited production beers or if you get limited item cars, you know, all sorts of different businesses have limited availability items and that draws people in. But when those aren't available to you, they tend to not be, um, advantageous to you going forward. So what is it really that is the long-term strategy? Low cost is difficult to maintain. It's hard on margins. Walmart's capable of doing it because they have scope and scale. Reward programs work until another newer option. Limited availability works while your product is hot. But a customer-centric focus puts your business in line with everything. If you're focused on your customer, your customer is going to be focused on you. Customer acquisition costs vary by your business and they vary by the industry. The acquisition cost for Starbucks is completely different than an acquisition cost for a roofing company. A restaurant acquisition cost could be significant. It could— it depends on the, the amount of market competitors in that particular area. Where I live, there are restaurants almost everywhere. Smaller towns, not so much. Selling to a new customer is 5 times greater than to an existing customer. In other words, it's 5 times more expensive to you to acquire a brand new customer than to sell to your existing customer. That's significant. That basically means that by increasing your customer retention by 5%, you can increase your profit by anywhere between 25% and 95%. That's huge. Existing customers, 50%, are more likely to buy and try new products within yours. Using my business as an example, if I sell a customer a brand new website and I develop their brand new website, a brand new website on their behalf, it's much easier for me to sell them social media, uh, marketing. It's much easier for me to sell them a content marketing, uh, opportunity. But if I'm trying to engage a brand new customer in content marketing and I've never worked with them before, I've got to start and work all the way up from the very start. If that customer has already known me and they know the work that I'm putting into their business on their behalf, they are much more likely to buy from me, and they're much more likely to do a brand extension into some other form of product that I offer. And they're much more likely to spend more money with me. In other words, they're much more likely to take a much higher profited item than they would be if they were just starting out with me. As your customer lifetime value increases, your profits are going to increase. What's your customer lifetime value? That is the value that each customer provides to your business individually. So it's the customer value times the duration that that customer is in your, is in your company. So how do we do that? Well, we have to focus on the experience. Focusing on the experience that a customer perceives is going to make sure that that customer sees value. It's going to make sure that they feel that they're warranted within your business, and they're going to see your impact or your business's impact on their own business, right? If you're selling to a business, you know, they are selling somewhere else. If you're selling to a consumer, they want to continue to maintain— they want to maintain with you as long as they see value with what you're doing. You're selling your line of clothing and that clothing is falling apart at the seams, They're not going to see value in it, but they might continue to come back if you continue to help them with their purchases. In other words, if they happen to get a bad item from your product shelf and you turn around and you treat them fairly and you treat them equitably, they're more likely to come back to you because they had a good experience with you. If you force them to have to fight for something that they deserve, even though that might help your bottom line, you're going to likely not have that customer for very long. Let's talk a little bit about some lessons learned. So some businesses over time— it's very rare that you see businesses that last multiple, you know, hundreds, decades, hundreds of years, etc. I like to go back to a book that I find to be very valuable by Simon Sinek called Start with Why. I always, when I find myself floundering and trying to figure out what I need to do, I try to sit down with that book so that it re-engages my thought process on Why are you doing what it is that you're doing? And one of the interesting things that comes out of that book is that businesses that tend to be very successful over a long period of time believe that their success is related to their product and not necessarily to the way that they're managing their customer base and treating their customers. The most successful businesses are ones that focus on why they are in business and they do right by their customers. And they can do that at the same time by focusing on the why. If you are focused on your customer and ensuring that that customer has everything that they need, then you are constantly making sure that you have value with that customer. For example, Blockbuster. Blockbuster was very successful '80s and into the '90s. Those blue awnings were everywhere. They sold, they sold rental VHS, they sold rental DVDs, and they eventually got into Blu-rays at the very beginning. But what they didn't do was they didn't change their model. They never looked at what consumers actually wanted. Consumers wanted to be able to get their movies, their videos, their games easily, right? It's— Blockbuster still requires you to get out of your vehicle, go into a store, and get there. Another company on this sheet that you see, Netflix, they started a different model. They started, they started not the way they are today, but they started by mailing out DVDs and Blu-rays. They started to completely undercut Blockbuster. Blockbuster didn't change. They just continued to ride that model out until they eventually closed and shuttered their business. BlackBerry In 2009, BlackBerry was the largest by far cell phone provider, uh, in the world. 4 years later, they had completely dropped off the face of the earth. Today BlackBerry exists, but it is a shell of its former self. In fact, it's only a software company. It doesn't make devices anymore. Why did they— why did that happen? Well, because they continued to focus on the BlackBerry device as being— that is with a keyboard, that is how people are going to continue to communicate. As we all know, Apple came out with a device that didn't have a keyboard. It was just a video screen, and the keyboard popped up when you needed to actually type something, and it was on the video screen, touchscreen. BlackBerry didn't try that very fast. They continued to believe that their device was the— was what made them successful. Today, BlackBerry isn't around. Netflix is a cautionary tale in that it put Blockbuster out of its business in large part, but Netflix almost killed itself. Netflix's founder, Reed Hastings, believed that, yes, they could continue to ride out a model where they were mailing out DVDs and BlackBerry— DVDs and Blu-rays. But at one point in time, they completely changed their model and they decided, we're going to get into the business of streaming because we see that that is going to become a bigger thing. People don't want to leave their homes at all now. They don't even want to go out to their mailbox. They just want to be able to turn on their TV and get access to their content. When they did that, they created 2 separate products. They created a product that continued to mail out the DVDs, and they created a streaming product. And they signed everybody that they were previously— that was previously in their customer base, they signed them up for both. And the vast majority of their customers decided that they would discontinue on one But they didn't stop what they were doing. They continued to provide streaming. They continued to push it even as the business itself lost the vast majority of its market cap. They went and continued to push that model. And what they ended up doing is they rode the DVD mail-out service as a cash cow, continuing to fund their streaming service and ultimately cashed out on the mail-in service, and now they're a streaming giant. They paid attention to what their customers wanted. They made a switch. They continued to prosper. Eric, I thought I heard you maybe starting to talk. Did you have a question?

Well, when you, uh, when you were— yeah, so when you were talking about Netflix and the shift and how people don't want to go out and they don't want to leave, they want to the convenience. I couldn't help but think, given all the social distancing and the shutdown right now, to see a movie— I would, I would love to be able to go to a movie theater and get a big old bucket of greasy popcorn and some Good Plenties and just be someplace other than my couch watching Netflix. And I know that that's more of an indication of the environment that that we're in and not saying that that's the way it goes. But I think it's important when you think about what customers are looking for and how do you provide loyalty and value and what they expect, you have to be able to take some of those things into consideration. And I'm, you know, Netflix certainly is getting its share of activity now with everybody binge-watching shows and Amazon Prime Video and all the other streaming services. You know, probably a whole topic for a completely different show. But once the ability to get out and about with other people happen, it'll be really interesting to watch what human nature does. But yeah, I'm craving popcorn right now. Just had to share that.

I understand. And I think the interesting part is You're right. There's going to be a large snapback on a lot of the things that we currently are doing today in so much. I think there will still be some reservation for going out to restaurants, but because people aren't going to want to be that in close proximity in a lot of cases. But there are certain freedoms that are right now being completely ignored that the smart businessman Business person, excuse me, is going to be looking at those opportunities and taking advantage of them. So, yep, you don't pay attention to what the customers are actually seeking out, you could miss the opportunity that you're, that you're looking for.

Yep.

All right, so I'm going to go and talk a little bit about Southwest Airlines. Southwest Airlines is probably one of the most significant examples of focus on the customer experience, certainly in the airline industry, but I would argue across any corporate entity. And I'm, and I'm going to just specify this by saying I understand I'm talking about larger businesses, but— And I know that we're all small businesses, but large businesses give us examples that that in large part we can't find through small businesses unless we've done significant case studies. So that's why I'm focusing a little bit more on larger businesses, but a lot of the implications from these larger business case studies can be utilized by us as small businesses. So Herb Kelleher was the former CEO of Southwest Airlines. And his basic premise was, we're in the customer service business. It's just incidental that we fly planes. And I think that's realistic for a lot of us in that no matter what we are, we really are in the customer service business. Again, I'm going to repeat it. Without a customer, we are nothing. So we need to focus on what it is that we need to continue to do to maintain that customer relationship. And if we're not doing that, we're not going to be in the business for very long. Reward programs at Southwest work in conjunction with their employee-focused experience. So they do have a very phenomenal reward program, but it's not the only reason that people utilize Southwest. They're not the cheapest airline. They're not exactly friendly when you go and try to line up for boarding a plane, but people continue to go back to that airline because they like the way that they're greeted on the plane. They like the fact that the pricing for their flight includes their baggage. They like the fact that they're constantly on time, and the customer is generally treated Very well. Customer experience transformation. Customer loyalty— what does that do? It reduces the customer churn, which means there's a higher customer lifetime value. It attracts new customers. If you have a good experience, what are you more likely to do? You're more likely to tell people about it. Word of mouth and social media has allowed for basically everyone to use a bullhorn on whether or not you were doing good with your service or whether or not you're doing poorly. God help you if you piss off the wrong customer and they're active on social media. It's not fun. I've had to try to clean up several of my different— of my clients' issues with that, and it's not fun to have to try to clean that up. Revenue increase, customer retention, multiple product purchases, right? So we've already talked about that. It's much easier to sell to an existing customer. It's much easier to maintain that relationship. It's much easier to continue to sell more and more services to them, whether you are selling marketing services like I do or Eric does. Or if you're in a bank, right? If you're selling a savings bond, it's much easier to then go ahead and sell a mortgage or a savings or a checking account. Once you have a relationship with them, if they like that business model with you, they will continue to come back to you for more. It's a lot of the reason why the telecom industry, of which I was a part of, they went to a bundled product service. If you could bundle your home telephone service, your cell phone service, your internet service, your television, they were offering huge discounts to do that because it's much easier to sell that to you because customers want that. They want the security of knowing, okay, all of my stuff is here. I'm going to pay less. I'm going to deal with this. Now, if you can't provide the services that you're supposedly offering and you're not doing it well, then you're going to lose all of them at the same time. But if you can maintain and lock that up, they are likely going to be with you for a very long time. Competitive advantage. You need to separate yourself from your peers. Right? So if your business is, say, a sole proprietorship or it's a large retail company or it's a bank, there are competitors in your marketplace. What are you going to do to separate yourself? Every one of you can sell Widget A or Widget B, but it's how you deal with that customer and how you treat that customer that's going to keep them coming back. If they look at you as a commodity and that they can go anywhere for whatever you're offering, they will. But if you separate yourself and you show them the value that you're providing, they will continue to come back to you because they value doing business with you. Engages your employees. Employees, especially younger employees, want to be They want that interaction. They want to be ambassadors for you. It's why people buy Apple t-shirts, right? Who would have thought that selling a— who would have thought that going out and getting a t-shirt with a company logo on it, whether it's Coca-Cola or Apple or whatever, that would ever be a thing, right? That's not— that is really not something that it makes sense to do. People tend to focus on sports teams or cities or places of residence. But somehow businesses have built their brands to the point where people are very excited to be able to show their love of that particular brand. Employees are no different. Especially the younger millennial employee. They want to be able to promote you. They want to show that they are doing good. It's why that love— that employee is also very socially motivated in volunteering. They want to be engaged, and if you build an experience for a customer that they support And they're willing to back up, they're engaged. You've got them locked up and they're not likely going to leave you either.

So I got a question, actually a comment from the audience as you talk about buying t-shirts with Apple on them. First off, I look down and I'm actually wearing a t-shirt that says Cloud Campaign, which is one of the tools that we use for managing social media and social networking posts for our customers and for our business. So I am Doing exactly what you're talking about. But if I were to say, what brand gets people, or what brand do people want to tattoo on their body so it is an indelible, permanent part of them at the skin level? What brand comes to mind when I say tattooed?

You're asking me?

I'm asking you. Yeah, I'm putting you on the spot here, but, um, there was just a comment that came through, and I'll maybe explain in my answer why it popped into my head more obviously than maybe what it appears for you.

But yeah, I, I actually, I, I just think apple, actually. Um, apple. Okay, apple.

You have an apple tattoo.

What's that?

Do you have an apple tattoo?

I do not. I do not.

I'm referring to Harley-Davidson. Okay. And the reason that that was obvious to me when the comment came through is my senior year in undergrad, our culmination business strategy class had to pick a brand to analyze, and one of the Gales, who was in my class, was part of the HOG group, Harley Owners Group. And so she, for our presentation, brought in her leather jacket, she brought in cozies and coolers and even underwear and t-shirts and you name it. But that is a brand that has inspired a tremendous amount of customer loyalty, as I learned as I did my research on the company. Through thick and thin. And people go so far as to take the Harley logo and they tattoo it on their body and it is there forever. So, you know, that's their bike, that's what they ride, and that's the company that they live, breathe, eat, and sleep with. And they're not going to make any bones about it. So if you can achieve the level of customer loyalty where your customers are willing to tattoo you And not just have the ability to take it off and throw it in the laundry. I think that's probably the ultimate net promoter score right there.

Yeah, no, you're right. I didn't— I never would have even considered Harley, but yes, another one of those brands. But they're also synonymous with the US, so that is a very uniquely American brand.

Absolutely.

Yeah, which is, uh, which is another reason why I think that gets tattooed as well.

Yep. So anyway, just had to share my Harley story.

I appreciate that. Um, so transforming organizations. So the proper customer experience, um, ultimately transforms your organization from either the top-down or bottom-up, whichever you're, you're like, you're looking to, to build it. But in essence, that change, that culture is ingrained in every single one of your business, every single one in your business. And it's a cultural change, it's a philosophical change, and ultimately it's meant to become a passionate in-place to gather your customers and continue to bring them in. So valuing the experience is the next slide. It's not— there you go. Valuing the experiences, right? So you want to minimize your cost and increase your benefits. So now we're going to start to get into that math stuff, and I apologize in advance, but we'll talk a little bit about promoters, passives, and detractors. I'm going to talk about NPS, or Net Promoter Score. It's my preferred method of maintaining your customer experience, but I'm going to talk a little bit about a couple other options as well. Promoters are advocates of a brand, and they're very loyal. They basically develop feelings for your brand or your service. They have a great experience, and they want to share. They are very, very motivated to continue to work with you. Passives. These are people that are happy with your purchase, but it's transactional in nature. This is something where, okay, they had a service that I needed. I bought it. They didn't do anything wrong. They didn't do anything great. But I did— I'm, I'm pretty pleased. They like your company, but they don't love you yet. Detractors. These are people that are displeased with your experience, and they have mild to aggressive irritation. And I'll explain that a little bit more on the next slide. As you work your way down on— in your Net Promoter Score, in the way people view you, the more aggressively irritated they are with you, the more loud they are too. So a bad— it's— if it's a bad experience, they just can't wait to share. They're also very likely to churn. Churn rate is extremely— it's extremely important measurement that I'm sure you all probably manage, but it's also incredibly important to your customer experience. The more people you're churning out of your business, the more you have to recover, and it's more costly to try to replicate that customer experience. Or that customer in your network. Net Promoter Score. So the Net Promoter Score, or NPS, is the sum of your promoters less the sum of your detractors over the total sum of your surveys. So if you send out 100 surveys and you get a— I'm sorry, if you send out surveys and you get 100 surveys back, And you have 8 detractors— I'm sorry, 8 promoters. You have 2 detractors, and you have 90 passives. Your score is 6%. It's positive. It's not great, but you're not below. Right? The last thing you want to do is have more detractors than you have promoters. To give you an example, when I ran the AT&T business unit I mentioned previously, Connectech, when I started there, they were a 50% NPS business, all right, which meant that out of 100, right, they were getting 80, 80, I'm sorry, I gotta think through the right number. Let's use, let's just say they had 50 promoters, 0 detractors, and they had 100 different surveys coming in. So 50%. When I left after having focused on providing value, explaining to customers what they were getting, their percentage was 82%. So that's a 30% increase over 2.5 years. And in essence, out of all of their surveys, 82% of the people were promoters of that business. And they were willing to go to bat to say, Connect Tech is a great service. They provide us excellent value. That is industry leading no matter what industry you're in. And then, you know, I'm very proud of it, but that's an example. That's the example on the far side. Most businesses tend to be closer towards the, let's call it 10 to 25% range. And a lot of businesses actually fall into the negative category because they really don't, they don't pay attention to this. So your Net Promoter Score is really willingness to recommend. How willing are you to recommend ABC Company to your family and friends on a scale of 0 to 10? Each one of us has probably been asked that question multiple times after having made a purchase, just didn't realize what that was called. That's your Net Promoter Score. If you're asked that question, they are measuring your Net Promoter Score for that business. Best Buy does it, AT&T does it, thousands of companies do it. It is one of the easiest ways to get a complete view at the view of your company in the general public. Some other metrics that can be utilized. Customer satisfaction score. That's generally a 0, a 1 to 5 score rating on how happy you are. It's often asked as, how happy are you with your purchase on a scale of 1 to 5, where 5 is, is very happy and 1 is very unhappy? Can also be 1 to 10, but generally it's 1 to 5. Customer effort score, right? Usually that's How high is the effort? How high of an effort was it for you to make a purchase with us? Right? So in general, that could be— generally, you're going to see 5 dots where neutral is the middle. On the left-hand side, 2 dots over, it's very hard. And on the right-hand side, it's very easy. Right? And that's your score for customer effort score. Those efforts are— those metrics are really focused on how happy are you with that purchase. That doesn't tell you what that customer thinks of your business overall. It's how happy were they with their last interaction with you. So those are customer satisfaction metrics. Net promoter score is generally asking How happy are you with my business overall? I'm almost done. Data, data, data. Gather as much information as you possibly can. Numbers are very easy to tally, and that's what Net Promoter Score is all about, but they don't provide context. Customers will guide your business on what it does right and where opportunities exist if you ask them. If you're doing a Net Promoter Score and you send out a survey through SurveyMonkey and you say, you know, how, how willing are you to recommend us on a scale of 0 to 10? They'll give you that number ranking very easily, but put a box below it and say, please provide your comments on why you gave us that score. They'll tell you. You were really easy to do business with, but your follow-up was not very good. Well, that's something you can take action on. You can focus your business that way. If they say you're— if again, let's use retail as an example. It was really easy to buy from you. Your pricing was really good. But when I got your product home, it fell apart the first time I washed it. Again, very easy to figure out what you can do about that. But they'll tell you what it is that you need to know. You just have to ask them, and once you ask them, then you've got to listen to them. Because if you don't listen to them, getting all that information does nothing for you. Macro versus micro business impactful information. So NPS, CSAT, CES—they're all great macro metrics. I mentioned churn rate before, close rate. You know, the amount of the percentage of closing of sales. Those offer additional focus points. Those are things that will tell you something about your business as well. If your close rate is very low, then people don't feel a need to finish with you. They don't feel a need to consummate that business partnership with you. If your churn rate's very high, they bought from you once, but they're not interested in buying with you again because something's wrong. And those are metrics that will tell you, okay, I have a problem here. I need to focus my efforts there so that I can understand how to get my business corrected. Lastly, customer lifetime value. So I talked a little bit about the customer lifetime value earlier. It's the customer value times the average customer lifetime— customer lifespan. So in other words, if you're a dentist and you know that you're going to get 2 $100 cleanings every year from a, from a client, and you know that client's going to also probably have on average 1 cavity, which is going to be— I don't know the answer to this, but I'm just going to pull a number out— that's a $500 office visit. That customer That client is also with you for 5 years. So now I've got $200 annually for 5 years, that's $1,000, and I have a $500 visit, uh, that's $2,500. That client, their customer lifetime value to me is $2,500. Now what's the average? You're going to take all of your customers after you do— after you've done that. Right, and you're going to average them up. So if each individual customer's— if it's $2,500 over 5 years and one is, you know, $15,000 over 10 years, once you add all of those up and you supply— divide by the total number of years that they're in business with you, now you have a customer lifetime value and you can apply that Number to every customer that you're looking to gain and acquire. So now you know, if I'm going to gain 2 customers a month and it's $2,500, well, now my customer— I know that if I have that, I've got an extra $5,000 for the next 5 years. So it's extremely important. The better the customer experience, the more you earn. That means that their average customer lifespan is likely going to increase. So now all of a sudden, instead of it being $2,500 over 5 years, maybe you change that to 7 years. That's an extra $400. Now it's $2,900 over 7 years. So your revenue will increase— repeat purchases, brand extensions, etc. Your lifespan increases, lengthening your time with your customers. Additional benefit to your customer experience based upon the customer lifetime value: the average acquisition cost goes down per sale. If you are going to continue to keep those people on your network, whether it's a retail business, a doctor's office, within your bank, the longer they stay with you, your average cost— your acquisition cost will continue to decrease. Your word-of-mouth sales go up. If you do a good job as a bank and you are in a particular neighborhood, you're a regional bank, more people are going to likely utilize you as a bank for their loans, for their savings accounts, for their treasury, etc. The more they come to you, The better feelings they have, the more they're going to refer you and the more you're going to reap in sales. So all of that's to say that the customer experience is as important to you as the customer is to you, because without the customer experience, that customer doesn't stay with you. And with that, I think I've got some time for questions. Eric, if you've got time, if you have any questions.

Yes, I do actually. And, uh, the first off, lots of good stuff. And when you're talking about lifetime value and profitability, that hearkens back to my banker days. Um, not all businesses have as much access to financial data as maybe what a bank does, for example. And in the banking world We've got tools, we refer to them oftentimes as MCIF systems or marketing customer information files, but that allows for us to take all the customer data that we have on who's doing business with us and see exactly what the profitability is. And oftentimes we find, and it's this way with so many different things in business, but the concept of the Pareto principle where The 80/20 rule, uh, if you're not familiar with Pareto, um, but 80% of your profits are likely generated by 20% of your customers. And in most businesses, bankers or otherwise, if that rings true, which I suspect it probably does, if 80% of your profits are coming from 20% of your customers, you really want to make sure that that 20% is very satisfied. They're at the 10 or the 9 end of the Net Promoter Score where they're actually endorsing and then, you know, trying to generate more business for you. But oftentimes when we run those analyses for our banks and help them review those numbers, a lot of the people that are on that 20%, or sometimes it's even 90/10, they didn't realize that those customers were as valuable or producing as much profit for the organization As what they were. And it's been a real eye-opening experience because if you only have so much amount of time and so much amount of money and so much amount of people resources, it's not to say that you don't want to make everybody a satisfied customer and make everybody love you. But if you only can focus on a few individuals to start, it's really good to know who those 20%, 15%, 10% that small segment is and make sure you knock their socks off so that they stick around. Because if one of them leaves, it's going to have a pretty significant impact to your business, and you may not even realize it until they're already out the door. So I don't know what you've found with some of your clients in other industries as to whether they have a real good grasp of their customer's lifetime value and the profitability that they're bringing to the organization. But that was one of the things that really jumped out at me just with my banker radar turned up all the way. So what are your thoughts on that?

I would echo what you said. It depends upon the industry. One of the very first clients I ever went into to talk about marketing with, I asked him, you know, what's your customer lifetime value? This is a roofing company. He said, I don't know.

What's that? What's that mean?

Essentially, that's exactly what he said. I tried to explain to him why it made a difference. He said, well, people aren't going to come back for a new roof for 20 years. I said, I understand that, but you're selling them a roof. You do maintenance on roofs. You want to continue to maintain the relationship with them. You don't want to build your business on a bunch of one-night stands. You want people that are coming back to see you constantly and that you are constantly on, on track with them. And I think it finally made sense. And by the time we were done, we had worked out a customer lifetime value, which basically included, you know, some maintenance costs for a couple of years. But then he finally saw, this is what the value of each new client is to me. And okay, now I get it. So now marketing makes sense why I need to spend $2,000 here in order to make $80,000 here.

Right, right. The other thing that I made note of, and again, just as a reminder, if you've got a comment or a thought, feel free to type it in and maybe I'll let you get a word in edgewise. But the other thing that I thought of when you were using Netflix as an example, and granted I still am craving popcorn, but one of the things that they do really well that's created loyalty for me is they've taken the time via technology to understand my preferences and what it is that I like and I don't like. Although I can tell when my wife's been watching Netflix because the recommendations that come up tend to have a little bit more Downton Abbey than they do, you know, Terminator. But being able to go through and understand, and this ties back to some of the prior chapters that we've talked about in persona development and personalization, but how important in your opinion is the personalization of the experience so that when somebody comes in or they get an email or they visit your website, that they feel like you're talking directly to them, or is it spooky and people don't like to be spied upon and they want content like everybody else?

It's, it's both. Um, I would argue that Netflix's single greatest advantage is their algorithm, uh, picking out what something— what people might like. And what a lot of people don't realize about Netflix is that They are building their entire content library that they're making is based upon what they think people will, will want to see, whether it's a good idea or not. Someone wants to watch cheerleaders on Mars, they're going to make a show that matches up to that. Because they can do it on the cheap, they can create it in-house, and they can put it there, and they know people are going to, to flock to it based upon what they're finding, you know, people are interested based on keywords, based upon their viewing patterns. And so they'll create based upon that, and it might be terrible, but then that's another data point for them. It is creepy in a lot of ways, though, and people do view it that way. But at the same time, they're so hooked on it that they don't care.

Right.

So they are, they are very good at manipulating what it is that you want and making sure that they can give you something that is interesting to them, to you. Yep.

Well, and I agree. At the end of the day, if you do it without creeping them out, that's going to just further enhance the relationship. And whether you leverage technology like Netflix, where they just monitor what you're doing and gradually the algorithm learns and becomes more intelligent, or a low-tech option is, you know what, if somebody signs up for your e-newsletter, why not Ask them what topics they're interested in. And if you're using any sort of a marketing automation tool or some sort of an email system that's worth its salt these days, it's gonna allow you to create lists and you can then take that information and ensure that people are gonna get content that really is what they want because they've asked for it, not because you've developed an algorithm or you're investing in expensive technology. Sometimes just asking people and saying, what is it that you want to hear from us? General updates, security updates, community updates, breaking news. That's gonna certainly help with with your personalization and your brand loyalty. So I just looked at the clock, and it's little after two Eastern time, and we have we have we have achieved our hours worth of content and then some, and. Loyalty inspires me as well, and there's lots of other thoughts, but I think we need to bring the show to a close. I will let you— any last words, or people want to get in touch with you? Do you spend most of your time on LinkedIn or Twitter? How can folks learn about Jason?

Yeah, so no, I just want to say thank you, Eric, for inviting me. I am on LinkedIn, and you can reach out to me via LinkedIn. LinkedIn dash in or slash in Jason dash M dash McCoy, and it's in the the presentation that you have out there. That's a way to contact me. So if you have a passion like I do, please feel free to reach out, and I'll be happy to to help. But I appreciate you all, and I will you know catch in catch y'all later.

Cool. Well, that concludes today's show, or I should say this week's show. Jason, thank you so much for being our guest. We will be back next week with what will be our final WSI Digital Minds book author series. One of our friends from California wine country will be joining us. So Andreas is actually got the final chapter in the book and he's gonna have the final say in Free Webinar Wednesday series. So I'm really looking forward to it and hope you all come back and join me next week. Until then, make it an awesome week and we will see you online. Take care everybody, bye-bye. Thanks, Eric.