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You’ve managed to make the sale and get yourself a new customer, but do you know how to keep them a customer for the long haul? Businesses spend so much time, money and energy to acquire their customers, but often are not doing anything to retain those customers they worked so hard for.
By following a few fairly simple rules, you can make your new customers not only long term clients, but also reap the benefits of their positive reviews and comments to help you win over future (hopefully long term) customers.
Rich: Joey Coleman helps companies keep their customers. An award-winning speaker, he works with organizations around the world ranging from small startups to major brands such as DeLoitte, Hyatt Hotels, Zappos, and NASA.
His First 100 Days methodology fuels the remarkable experiences his clients deliver. In his upcoming book, Never Lose a Customer Again – scheduled for publication in March of 2018 – he shares strategies and tactics for turning one-time purchasers into lifelong customers.
When not speaking to audiences around the globe, Joey enjoys spending time with his amazing wife and two young sons in the mountains of Colorado. That sounds pretty sweet. Joey, welcome to the show.
Joey: Thanks Rich, I really appreciate the opportunity to be here. Thanks so much for having me.
Rich: So as I was sharing with you before, part of the reason I wanted to have you on was for selfish reasons. I think that s a company we’ve always been good as customer acquisition as the focus. I think all digital marketers say this. So focused on customer acquisition rather than customer retention, probably because getting customers – generating leads and closing sales – is sexy.
Joey: RIght, it’s the chase. It’s like dating. This is the chase and then you find yourself in the relationship and you’re like, “Wait a minutes, what do I do now?”
Rich: RIght. Now I have to do work. Let me just go out and sell some more.
Joey: Totally. And so what do most people do, at least in the business world? Well let’s just go chase some more instead of actually trying to dive deeper into the relationship that we claimed we wanted and are now in, yet we seem to be not as interested in.
Rich: So you obviously have this focus on customer retention. In fact, when I first was looking for someone to talk to us about customer retention I just threw something up on Facebook and a number of the people that had responded to that thread had mentioned you, which is why I reached out. So your thing is customer retention, why are you so fascinated by that?
Joey: There are a number of reasons I’m fascinated by customer retention. I think the primary one is that it’s an area of business that is so incredibly important to whether your business succeeds or fails. And yet the great, great majority of businesses on the planet spend little time, little money, and little effort focusing on it. We are so driven – as you were mentioning – to fill the funnel and prospect and acquire new customers and market and sell, and tons of time, money, and effort go to those activities. Yet the whole purpose of a business is to actually serve the customers, and to keep the business running we need to make revenue from those customers. And we spend all this money acquiring customers and then they leave before we’ve even had the chance to get out return on investment or to really build on the relationship.
And I came up more recently – before being a full-time speaker – I was running a branding ad agency for about 15 years, and what I found is that the experience you create for customers is the last great differentiator. When it comes to price it’s a race to the bottom. When it comes to quality the expectation is that it’s the highest most fantastic quality, regardless of if you find the product at a high end luxury retailer or even at Wal-Mart. And at the end of the day, accessibility, we live in a world where now the expectation is that your product or service is available 24/7 through 365.
So if we can’t differentiate on price, and we can’t differentiate on quality, and we can’t differentiate on accessibility, what’s left? Well we can differentiate on the experience we create. And while it’s certainly important and relevant to create an experience for people when they are prospects, where it really starts to impact your business is the experience you create after the sale.
Rich: That makes a lot of sense. Just hearing you talk about the fact that the ROI isn’t even there if we’re completely focused on customer acquisition, but it comes back to us in customer retention. That really resonates with me and that makes a lot of sense.
Joey: Cool. Well it’s fascinating. Most – not all businesses – but many businesses can tell you how much they spend acquiring a customer, and they have their customer acquisition cost pretty dialed in. But when I ask business leaders what is the likelihood that you retain your customer long enough to recoup the acquisition cost, they get very nervous and they realize that they haven’t really thought much about that. And regardless of what industry you operate in across the planet – and I’ve studied hundreds – you’re going to lose somewhere between 20% and 70% of your new customers before the 100 day anniversary.
So in that first 100 days, if you don’t create a remarkable onboarding experience, the customer that you fought so hard to get in the front door is going to run out the back door. And when they do, they’re not coming back. And if the experience has actually been negative, they’re telling all their friends not to go over to your place either.
And so we find ourselves in this situation where most businesses are hemorrhaging customers in the first 100 days of the relationship, and nobody’s talking about this. That’s my goal is to change the conversation to provide a methodology and a framework for people to successfully onboard their customers in that first 100 days time period. Because if you get the first 100 days right, you can have a customer for life.
Rich: Alright, so I downloaded your First 100 Days Starter Kit, so let’s kind of talk about the customer journey and the first 100 days. What’s the framework that you use for success here?
Joey: So the framework I use for success is pretty straightforward. I believe that here are 8 phases that your customer has the potential to go through when they decide to do business with you. And I’ll give you a quick overview of each of the phases.
The first phase is the “Assess Phase”, day zero. I call this “day zero” because the customer may assess doing business with you. Let’s say you sell runways for airports. Most airport authorities are going to assess the person that lays that concrete for over a year. If you sell breath mints at a retail establishment, the assessment period is probably going to be the customer going to check out, looking and seeing the mints, thinking they need better breath, grabbing the mints and buying them. So the assessment phase can be long or short, it kind of doesn’t matter. What really matters is day one, the next phase, the “Admit Phase”.
This is where the customer raises their hand and admits they have a problem that they believe you can solve with your product or service. Almost as quickly as they make that decision and the dopamine floods their brain and they feel joy and euphoria and excitement about you providing a solution. The dopamine begins to recede and they move into the next phase, which is the “Affirm Phase”.
This is known as common “buyer’s remorse”, when they begin to doubt the decision they just made. You need to reaffirm their decision in the affirm stage, and yet most businesses – while they’ve heard of buyer’s remorse – do nothing to address it.
We then move to the next phase, which is “Activate”. This is where you really kick off the relationship. So if you sell a product, this is when the customer receives the product. If you’re selling a service, this is when they come to the kick-off meeting or the first time that you go to deliver the service that you sold them. Here I call it “activate” because we want to bring a sense of energy and activation to the relationship. We want to set the foundation for the level of excitement and intrigue that is to come, and we really want to get things off on the right foot.
Between this phase – which is basically the 4th phase in the 8 phase process – and the next phase, is where most companies fall apart. And that’s as we transition to the next phase, which is, “Acclimate”. You need to acclimate your customers to what it’s like to do business with you. You’ve provided your product or your service to hundreds, if not thousands, of customers before. But for this new customer it’s the first time they’ve ever done business with you. You need to hold their hand, you need to acclimate them and help them navigate through the process.
Now lot’s of times in this phase people say to me, “Well Joey, it was in the proposal. They read the proposal, they signed the proposal, they should know what comes next.” With all due respect folks, you don’t read everything you sign. And I say that respectfully and as a recovering attorney. There’s a lot of people that just sign things all the time without reading what they just agreed to, and the same holds true for your customers. Even though you outlined everything in the schedule of sequence of how it would be, or even though your product has directions included with it when you mail it to them, the customer isn’t going to necessarily read those. So you need to be willing to help acclimate them to using your product or service.
Then if you do that properly we transition to the next phase which is, “Accomplish”. In the accomplish phase the customer achieves the goal that they had back on day one when they said, “Hey, I belive that you can help me.” What’s interesting about the accomplish phase is most businesses never stop to ask the customer what their primary goal is, so they can’t track the customer success against that primary goal. If you do that when they actually accomplish that goal, it can be a moment for celebration and you can feed back to the customer that they’ve achieved the thing that they originally set out to achieve. This is the ultimate conversation that a business can have with it’s customers because you prove your value tenfold in that moment, and you show that you have delivered on the promise you originally made.
If you help them accomplish their goal you move to the next phase, which is “Adopt”. Adopt is when the customer basically says to the world they love you, they’re committed to you, they only want to be in a relationship with you. They’re not going to shop their business, they’re going to keep coming back to you.
And finally we reach phase 8, the final phase, “Advocate”, the holy grail. This is when the customer that absolutely loves you tells everyone they know. They start to refer more fans, they become a rabid fan of you, they’re helping to drive your business. They’ve become your non-commissioned, non-employee sales force and is out there spreading the good word. Which by the way means that you don’t have to spend as much time, effort, or money on the marketing or sales because now your customers have become your sales people.
So at a 35,000 foot level, those are the 8 phases. Every customer has the ability to transition through all 8 of those. Whether they will or not depends on how well you’re doing on the onboarding as they navigate through each of these potential phases.
Rich: Alright, that was great. My first question is, how did you come up with so many “A” words, but I’m going to skip over that.
Joey: The goal in school is to get straight A’s. Well my goal is that you get straight A’s when you do all of these phases.
Rich: And this makes sense whether you’re selling airport runways or whether you’re selling mints. And obviously running a digital agency I also see this whole process, too, and I see some places where it might be breaking down or places for improvement within our own processes. So I’m just going to talk about a couple, and one is the third one which was “affirm”, which often is referred to as “buyer’s remorse”.
So somebody has given us the money and we haven’t yet kicked off the project – if we’re in between “admit” and “advocate” – why are they experiencing buyer’s remorse and what kind of things can we do to get them from giving us the money and getting into the kickoff, which might be more exciting for them?
Joey: Sure. Let me ask one verifying question, Rich. In this hypothetical we talk about what is the distance of time between the moment they sign on the dotted line to hire you, and when you have that kickoff, on average?
Rich: Well for us personally it’s probably anywhere from on average a week to two weeks. Maybe a little bit longer but that’s abit it.
Joey: Perfect, thanks for sharing that. So I’ll use this hypothetical but it applies regardless of whatever product or service you’re selling. The first question was why do they feel buyer’s remorse. The answer to that is you’ve sold your service to a human being. Brain science tells us that when the dopamine floods the brain at the purchase we feel joy, euphoria, and excitement. And as that chemical naturally recedes from the brain and the dopamine goes away, that lack of joy, euphoria, and excitement is replaced by feelings of fear, doubt, and uncertainty. This happens by the very nature of them being a human being.
Now sometimes we’re more cognizant of this than others. Usually we don’t experience a lot of buyer’s remorse when we buy a breath mint. When we decided to hire a digital agency to design our website or to build out our marketing campaign or fix out email funnels or whatever service you’re providing, there’s a higher likelihood of having some buyer’s remorse because they’re hoping that you’re going to handle their big problem, and they’ve probably looked at some of your competitors and considered offers from them and decided to go with you. The minute they decide to go with you they have a feeling of loss that they might have missed out on something had they gone with one of your competitors or one of the other options. So that’s why they feel the buyer’s remorse.
Now most customers are never going to be able to articulate that even if you ask them, they’re going to deny it. But all of the research, all of the brain science shows it’s true. So how do we combat that? Well the easiest way – especially if you have a 1-2 week time period – is to let the customer know in that 1-2 weeks how excited you are about the kickoff meeting. One of the most basic ways to address buyer’s remorse is in that affirmation stage, to write a handwritten thank you note thanking them for the business.
Now especially for someone like you who is operating primarily in the digital space – and I know a lot of your listeners operate in that space – turning to a more analog solution like a handwritten thank you note is going to blow your customer’s mind. It’s not how they’re going to be used to interacting with you, and if you write a sincere thank you note just saying, “Hey, I realize you had a number of choices when considering your digital agency, you chose us, we don’t take the trust you’re putting in us lightly. We are super excited for the kickoff meeting, we’ve got a bunch of great, new ideas that we want to share with you that go beyond the things we talked about in the proposal and we look forward to seeing you Thursday the 5th at 2:00 P.M.” That alone is enough to address the fear, doubt, and uncertainty that they have in the affirmation stage. Now you can go further if you want to, but it’s really as simple as that.
Rich: That is good advice. Now I also wanted to talk for a second about “Acclimate”. So we use a piece of software here for project management and more than once somebody doesn’t understand how it works, and I always wonder if that’s maybe not the best way to start it. What kind of tips do you have for acclimating somebody to the way of doing business with you? And I understand on one hand with breath mints there’s not a lot of acclimation needed.
Something with the airport example, obviously you’re going to need to show them exactly here’s how we process things, here’s how we lay it out, here’s how many months you’re not going to be able to have an airplane on that, whatever it may be. What type of tips do you have to kind of share with somebody and show them the path so that it almost feels comfortable when we actually go down it together?
Joey: Fantastic question. And you’re right, this is the area where I mentioned most businesses fall apart in terms of their customer relationships. A couple things. Number one – just for full context and disclosure – I ran a marketing and branding agency for well over a decade, about 15 years, and so I’ve been in the position that I imagine you’re in and many of your listeners are, which is someone is hiring me to build a website or develop their online marketing, and serving digital agency-type clients. One of the fascinating things that I think is important for all digital agency owners and employees to remember is you love technology, most of your customers are afraid of it.
Rich: That is one of the most obvious and helpful things I’ve heard all day, perhaps all year. Especially when you get somebody who sends you an email from AOL.
Joey: Exactly! Here’s the thing, if they’re hiring you to be their digital agency, it’s because they can’t do it themselves. And if they can’t do some things like – in this day and age – build a website or set up an email funnel with all the incredible tools that are out there that are actually fairly easy to use, they are somewhat afraid of technology. And when the first thing you say to them is, “Great, we want to introduce you to our Project Management software “, well first of all you just said 3 words that scare the hell out of them, “project”, “management”, and “software”. They’re anxious before they’ve ever seen the interface. Now depending on which project management tool you use, some are designed to be friendly to the end user – the customer – some are designed to be friendly to the company that is using the software.
I don’t know which one you’re sing, I’m not going to ask you to name any names. But any digital agencies that stop and look if the processes and tools you’re using are designed in the best interest of the customer, or designed in the best interest of your operations. I’m not saying there’s a right way or a wrong way, what I am saying is you need to be aware of how they’re designed.
Then you move to a stage of saying, “Ok, if we have to use this tool, how can we make teaching our new customer to use this tool fun and exciting? How can we reward the behavior?” Anyone who has children or anyone who has been around children, or anyone who has a pet, or anyone who has been around a pet knows that if you want a child or a pet to follow a specific set of instructions or do specific behaviors or activities, you need to build on small tasks. If you do a small task you give a reward. If you do a medium task you give a reward. If you do a bigger task you give a reward. And you build on these things sequentially.
What most digital agencies do is they say, “We’re going to send you a login, go in and get in and just explore around. It’s super intuitive, it’s easy to understand. Just reply to the first message we sent you.” And that’s all the training you get.
Rich: Yeah. We might be guilty of that one.
Joey: And you know, it’s ok. I used to do this sometimes in my business years ago. I’m going to censor any names to protect the guilty. Years ago I was building a website for someone and they called me up and they said we want to fly out to see the servers. And I said, “Excuse me?” And they said, “In your proposal we understand you’re going to host our website on a server. We want to come see that server.” Now this person was a big land owner in the midwest that was used to that when you bought an asset there was something to see.
Rich: Interesting. So how did you explain it to him?
Joey: So I explained it to him and I said, “Here’s the deal, full transparency, I’ve never seen the server. We use a virtual server that based somewhere – actually in the midwest – that‘s a reliable hosting company that we worked with over the years and we really like. If it’s really important for you to go and do a tour, I can arrange that, but I can tell you you’re going to be ok. And if at any point the server doesn’t work – which it’s going to and we have all these guarantees, etc – we have other servers that we can move it to that we’re going to have backed up and we can flip a switch and in a matter of seconds we’ll switch it over to another company, so you don’t need to worry.” And the guy was like, “Oh, ok. Well then we’ll be fine.”
He just didn’t know. See the problem is we presume from a level of understanding of how our business operates, that our customers have that same level of understanding. This is why in the “Acclimate” stage you have to hold their hand, you have to teach them. The things that you might think are stupid that you might judge as being ridiculous, is a really legitimate and honest question for someone who’s spending a lot of money relying on something that they’ve never seen or experienced.
Rich: Very good advice. And I’m reminded of the time early on in my career when I put on a webinar and somebody showed up at our offices to participate. And we had to explain to them that a webinar is actually delivered via the web, and they could stay in their offices and watch it. In fact, I would probably have performance anxiety if they sat on my couch and just watched me do it.
Joey: Oh that’s funny, that’s funny. Oh I love that story, Rich. With your permission I will share that because that is a hysterical example. And it’s a perfect illustration of we presume that our customers have a level of understanding and knowledge that, shame on us for presuming and assuming that.
Rich: So I do want to hit on one more thing before we wrap up today. In the download – which we’ll link to, it’s amazing and I recommend everyone check it out – besides the 8 A’s, you also have the 6 ways to communicate in the first 100 days. Some of these seem pretty obvious to me; in person, email, mail, phone, video, all great ideas. But the 6th one is “present”. Not like “in” the present or present tense, but literally a gift.
Joey: Correct.
Rich: So tell me a little bit about how we could use a gift – at any one of these stages – to kind of make sure that we’re working on customer retention here.
Joey: I’d love it. So gifts are one of the most overlooked opportunities to create personal and emotional connection with your customers. Here’s what I mean. As a general rule, people love receiving gifts. Especially when the gift is unexpected and thoughtful. If the gift is something where we’re going to give them a mug with our company logo on it, folks, that is not a gift. That is a marketing tool that you are pretending is a gift. Stop deluding yourself. No one ever found themselves on Christmas morning at the Christmas tree or on Hanukkah at night opening a gift or on their birthday expecting to get a mug with a company logo on it. Stop pretending that that’s a gift.
What a gift really is is something that shows you’ve been paying attention to the customer and you know something that will be interesting and valuable and special to them. Now where this requires a little more work is that the best gifts and presents have nothing to do with your business. As a digital agency if you’re going to give the gift of a mousepad or a bluetooth keyboard or something like that, you’ve kind of missed the point.
The gift should be something that is a gift that someone who really loves and cares about that customer would buy for them. What would their spouse or significant other, early in the relationship when it was new, fresh, and exciting, give them to really show they cared? One of the cool things is we live in an era where thanks to social media your customers are expressing their desires, wants, interests, and needs, online in public forums all day, everyday. All you have to do is go on your customer’s website, find the thing that they’re interested in; their favorite sports team, their alma mater, are they a family person, where do they like to vacation,what kind of vehicle do they drive, what are their hobbies. Any of these questions can be answered in a cursory 10 minute review of a social media profile. Then find a gift that fits into one of those categories. Again, it’s not about the cost of the gift, it’s about the thoughtfulness of the gift.
For example, I went to the University of Notre Dame. I am a fanatic when it comes to Notre Dame and Notre Dame football. I have had clients and folks that I’m a customer of give me Notre Dame related gifts, and they are always some of my most favorite. Now I don’t hide that I’m a fan of Notre Dame and I realize some of the folks listening who are fans of other schools may not be excited about the fact that I’m a fan of Notre Dame, and that’s fine. I believe there’s two types of people in the world, there’s Notre Dame fans and those that haven’t been converted yet. I just have to work harder, that’s totally fine.
But the moral of the story being when a gift shows up from someone that’s Notre Dame related, they have my attention. Even though my interactions with them have nothing to do with Notre Dame, they’ve taken the time to pay attention to me. So that’s where I think surprise gifts and bonuses can really connect with your customers in a deep, personal, and emotional way.
Rich: That’s awesome. And for anyone who’s listening, I have a deep seeded love of 18 year old scotch, so I’m just throwing it out there.
Joey: There you go. No, that’s perfect! And then they know. And here’s the thing, if you were doing business with someone an early on in that relationship… here, let’s go back to your original question about affirmation. If you were doing business with me and you were my client, you know what I would send you in the affirmation stage? I’d send you a bottle of 18 year old scotch. And I’d say, “Here’s to toasting our new relationship. Please enjoy this with my compliments.” And I’d probably include two scotch glasses etched with your business’s logo on them.
Rich: That is one classy gift.
Joey: Now we haven’t even had the kickoff meeting and you’re saying, “Holy cow, we made the right choice. We’re with the right people, they get me, they understand me, they like me.” We’re off to the races.
Rich: Fantastic. This has been great, Joey. I had high expectations, you totally blew them out of the water. I know that you’ve got this upcoming book, but I know that people are not going to want to have to wait if they’re listening now. Where can people find you online?
Joey: I’d love to have people come to joeycoleman.com. If you come to joeycoleman.com you can get access to the starter kit that’s been kind of the basis of the conversation I’ve had here with Rich, just put in your email. By the way, when you put in your email I send you the starter kit and I check in on how you’re doing. That’s it. You don’t get added to an email list, you don’t get added to a promotion. I’m a big believer that you’ve got to treat your customers right. Once you give me an email I treat that valuably and I only use it to check in on anything you’ve asked for.
If you want to sign up for the newsletter and things like that, great. If you want to come buy the book, Never Lose a Customer Again, which is available on Amazon and it comes out in March, fantastic. I’d love to have you read it because what it does is it takes what I’ve done over the last 15+ years and distills it down into a book, which my goal is to have it be very actionable.
I know this podcast is called Agents of Change, I’m a big believer in the fact that there are three types of speakers. Speakers who make you feel differently, speakers who make you think differently, and speakers who make you act differently. And while I certainly hope our conversation today has made you maybe think and feel a little bit differently about how you retain your customers, if you don’t act differently based on what you learned here today then I failed my job. The book is a great action step plan for you to implement these types of thinkings and philosophies into your business to grow your business and your relationship with your customers in ways you can’t even begin to imagine.
Rich: Joey, thank you so much for giving us your time today and sharing your expertise.
Joey: Rich it was my pleasure, thanks for having me on the show
Show Notes:
Joey Coleman knows how to impress his customers so they remain customers in the future. His upcoming book is a must read for any business looking to increase their customer retention, so pre-order it now! In the meantime, check out his website for his “starter kit” and learn how to make the most out of the first 100 days with your new customers.
Rich Brooks is the President of flyte new media, a web design & digital marketing agency in Portland, Maine. He knows a thing or two about helping businesses grow by reaching their ideal customers, and to prove that, he puts on a yearly conference to inspire small businesses to achieve big success. You can also head on over to Twitter to check him out, and he just added “author” to his resume with his brand new book!
