Customer Service IS Marketing

June 25, 2014 John Gorup

 

Great_Sphinx_of_Giza

Despite our scientific, internet-enabled world, many eternal mysteries persist. Questions like, “Why was the Great Sphinx of Giza built?” or “Does Sasquatch really exist?” or “How effective is advertising?” have plagued thinkers through the ages. John Wanamaker, the brilliant turn-of-century merchant, famously said, “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.”  A hundred years later, business people are now questioning the effectiveness of online advertising. Clearly, there will always be an element of mystery in calculating the return-on-investment for marketing efforts.

Customer service is a better avenue for building customer advocates than marketing. According to the National Business Research Institute,  “…approximately 60% of customers will stop using a brand if they can receive better customer service elsewhere.” Indeed, research has shown that overcoming customer problems can actually lead to more loyalty than if the problem did not happen in the first place. Of course, this should not keep companies from trying to prevent problems from happening, but should encourage building a great customer service experience.

Great customer service not only increases loyalty in current customers, but also brings in new business. John Goodman wrote “In interviews with the executives of five major financial service companies, they confirmed more than 40% of all new clients—and in two cases, more than 50%—of all new clients came as a result of personal referrals from existing customers.”  This phenomenon is true to different degrees in all industries. Not surprisingly, satisfaction expressed by an actual customer is a powerful advertisement.

The power of word of mouth testimony is magnified by social media. Al Hopper has put it succinctly by saying, “Customer service, especially in the social media space, is the new marketing.” Customers now tell the world they are unhappy before they tell the vendor. Examples of this phenomenon are all over Twitter, and some companies handle these brands better than others. Chris Peterson, a  Salesforce MVP and developer for FinancialForce gave a positive example with Wells Fargo when a new debit card was overnighted to Chris after he complained on Twitter when his old one had issues. My colleagues Kelly Walsh and Jarrod Kingston reported great social media experiences with Turbotax and Southwest Airlines. These three people have collectively over 3,600 followers on Twitter. Being active participants in social media helps companies protect their brand and create brand advocates.

The obvious conclusion is that companies need to fire all their Senior Marketing Managers. Companies need to rid themselves of these layabouts with their fancy MBAs and hire socially-engaged people who can provide excellent customer service. Of course, I am joking (especially if the person reading this is my boss.) The conclusion companies should make is that it’s time to prioritize customer service, and to understand that this function is now a major conveyor of brand.

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