The theme for Nextiva’s conference this year, NextCon, was customer experience. And Small Business Trends did a great job of covering the event. Do yourself a favor and check out the coverage, as there were a ton of great speakers, including Brian Solis, Les McKeown, and Google’s Lawrence Cole, as well as Nextiva founder and CEO Tomas Gorny.
I had the pleasure of speaking with business television personality and best-selling author Carol Roth, who focused her keynote session on customer loyalty, and idea she calls Customer Experience 3.0. Below is an edited transcript of our conversation. To hear the full conversation click the embedded video or SoundCloud player below.
Carol Roth: I love that my introduction is fun.
Small Business Trends: You did a keynote session and a keynote panel here at NextCon, all around customer experience. But before we jump into that, you do a lot of things …
Carol Roth: I do.
Small Business Trends: Why don’t you tell us a little bit about some of those things?
Carol Roth: My short version is that I’m an entrepreneur, and I play myself on television. But the experience ranges from founding a legacy planning product called Future File to help you organize your wishes and information, and help your loved ones in the case of aging issues or passing. I’m also a recovering investment banker, I’ve done a couple billion dollars of transactions, a New York Times bestselling author of the Entrepreneur Equation. As I said, I’m in front of a camera for all different kinds of people, usually a couple times a week. And my favorite tidbit is that I have my own action figure.
Small Business Trends: Not everybody can say that, so that’s pretty cool.
Carol Roth: Yes, thank you.
Small Business Trends: At this conference, the whole theme is around customer experience and you talked about customer experience three dot oh. Maybe you could give us a little high level view of what that is, and how did we get from 1.0 to 3.0?
Carol Roth: Customer loyalty is really at the core of all marketing and selling that needs to be done these days, because what’s happened is technology has made it so easy to reach everyone that everyone has taken advantage of that. While you can reach everybody, you can’t really get their mind share. And so, it’s really all about how do I engage the customer that you already have that relationship with to not only sell more to that customer, whether it be more frequently or with upsells, but how to use them as a conduit to spread the word within their own circles of influence. That’s the underlying foundation of why I focus so much on customer loyalty. I think the way we get from 1.0 to 3.0 is if you think about old school what’s a customer loyalty program, you think about your app or your punch card, buy 9 get the 10th free or earn a point a dollar, but it does a lot of different things.
It creates almost this level of price competition. Buy 9 and get the 10th free is like a 10% discount. You have to work really, really hard to get, and then it allows other people to try to undercut that. It also creates loyalty to a program, instead of to your brand or your company.
I find that to be a really bad strategy for companies, ’cause people get wrapped up in what you’re giving them, versus the value proposition that you’re offering them through the company. And then, it influences the people who spend directly, but it doesn’t capture those influencers who are indirectly bringing people into your business. And so, as we move from 1.0 to 2.0, which is using influencers in the same way, 3.0 is really about building relationships with customers. Understanding them, listening to them, knowing that they care. Or knowing that you care, and really just focusing on building that authentic relationship between you as a company and what you’re offering in that customer.
Now, it sounds very, very simple. Okay, we understand we should be nice to customers, we should build relationships. It is not easy to do, and that’s why so few companies have done it well. And part of the reason why it’s so challenging, is that everybody is tunes in to what I call their own radio station, WIIFM – What’s In it for Me.
As the company, you need to figure out for each customer, what is going to drive the loyalty to them and then also, figure out within that particular situation what the customer is, it’s something different depending on the life cycle where you’re at with that customer. And so, I created a model with five pillars of loyalty that you can use to help make that process much easier for you, but the one thing that I always tell companies is that you still have to listen. It always starts with listening, ’cause even if you know the five pillars, if you’re applying it to the wrong customer at the wrong time, you’re still not gonna create that relationship.
Small Business Trends: What’s the hardest thing that companies are faced with, or having troubles with when it comes to understanding how to deliver consistent, successful customer experiences over time?
Carol Roth: I think it’s the consistency factor. I think people really want to be one and done. I did this thing for you once, we’re good. And now I’m gonna go away and focus on someone else. And as we know in our personal lives, that doesn’t work very well. You can’t just bring flowers home one time and expect that that is going to forgive you for life, you never have to bring flowers again again, right? That appreciation has to be shown throughout the course of the relationship, or the relationship breaks down, right?
It’s the same thing with the business relationships is that the consistency level, I think, is really challenging. And then the other thing I think is really challenging is that personalization, which shouldn’t be difficult at all, between social media and conversations and technology. It’s very easy to create what we call an intimacy file.
I know that sounds very Victoria’s Secret, but I don’t mean it that way, just a file where you know things about people, you know their favorite sports teams, you know if they have kids, you know their favorite food, whatever it is, so that you can just pull up those notes and know what it is that makes that person tick, and then be able to apply that right factor. I think what companies do is they have their shtick. We’re gonna give everybody this, this is our present, this is our swag …
Small Business Trends: Not personalized, you’re getting what everybody else gets.
Carol Roth: You’re getting what everyone else … Then it becomes very transactional. And loyalty is never transactional. And so, if you don’t take the time to understand the person and do something that’s special for them, they’re gonna know. They’re gonna know that this is … you’re the guy who shows up with flowers on the first date every single time. Note that I’m allergic to flowers, and that maybe you should’ve shown up with some chocolates.
Small Business Trends: Yeah. Well, what do you think about companies like Amazon who … They don’t necessarily have a touchy feely relationship, but people love Amazon because they deliver the things that they value a lot, which is, two day free shipping; you give me my stuff, you make it easy for me to get my stuff, it’s not fancy schmancy, but it is the experience that people are looking for.
Carol Roth: That’s absolutely it. The “easy” is a huge pillar of loyalty. If you can make it easy for somebody to do something, especially nowadays, where time is at a premium, they make it easy to get done, they have a really wide selection so you’re one and done, and if you run into a problem, they never ask you about it, they just take care of it. They’re really delivering on what I call the customer service pillar, and that’s why Amazon’s so successful. A lot of people think it’s because Amazon has low prices, if you actually price shop Amazon, I’m telling you right now, Amazon does not have the lowest prices …
Small Business Trends: Not anymore.
Carol Roth: Yeah. You can usually find whatever you’re looking for somewhere else better, but you’re looking-
Small Business Trends: You said it yesterday, always compete for value, not trying to compete on price.
Carol Roth: You never want to compete on price, you always want to compete on value, and that’s what they did. They started with the price to attract your attention, but it’s that customer service, it’s that value add that makes you stay with Amazon. As long as they’re within the realm and the range, it’s gonna be so much easier for you to do business with them, and that’s why they have dominated every industry that they’ve walked into, and will probably continue to do so.
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Small Business Trends: And on that note, give us one or two things that next year or so, that it’s gonna be really important for, particularly for SMBs, to get right when it comes to customer experience; if it’s something technology related, or is it just good old fashioned stuff. What do they really need to get right over the next couple of years?
Carol Roth: I think that it always goes back to basic. We always say, oh what’s the vision for the future? I think the future vision is always tools, but tools always help the underlying foundational elements that never really change. Understanding your customers and leveraging your existing customers will continue to be more and more important. I know it’s very appealing or you maybe think it’s the right thing to do, that I have to go out and get new customers, but if you haven’t spent the time on your existing customers, figuring out if they can buy from you more frequently, or upselling them, figuring out what products and services you can offer them, so each time they buy, they’re buying more from you, you’re doing them and yourselves a disservice.
If you’re not leveraging for referrals directly or indirectly, you are doing yourselves and them and their friends a disservice. I really think it is coming back to that core focus. When you’re trying to attract a new customer, if you have an existing customer who can do that for you, their level of influence with a new customer is gonna be so much higher than your ability to try to cut through all of the noise that’s out there and get somebody’s attention, so most small businesses haven’t spent any time going back to their existing base and really trying to monetize that, and the amount you can grow your business from just those people who really do have that passion for your business. Who, at a minimum no they can trust you. That’s the easiest thing they can possibly do as a small business.
Small Business Trends: Where can people learn more about what Carol Roth is up to?
Carol Roth: Yes. You can visit me online at carolroth.com, on Twitter, especially if you have a slightly warped sense of humor at @CarolJSRoth, and please check out Future File at futurefile.com so we can help you protect your loved ones in their biggest time of need.
This article, "Carol Roth of Future File: In the Age of Customer Experience You Should Compete on Value Not Price" was first published on Small Business Trends
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