Ah yes, return on investment (or ROI). Yes. It’s important – but is it the only thing we should be focusing on? We’ve become so obsessed with seeing more dollars come in from our investments that it sometimes leads to tunnel vision on one thing: money. Keeping the company alive and making intelligent financial decisions is critical, but sometimes obsessing over one thing can cause people to lose sight of their initial mission, which is to solve problems.
The original formula is simple: first, you help others get what they want. Then you get what you want. Others first, you second.
But if it’s so simple, why does it seem that companies are often getting it wrong? Somewhere down the road, they stray from their original purpose of solving problems first. Somewhere down the road, they stop listening to their customers. Somewhere down the road, they stop innovating. All of a sudden, it’s about money more than anything.
Companies become worried about how many more dollars they can squeeze out of their customers. How they can cut costs by outsourcing customer service. How they can outsource production to other countries. Money, money, money.
Then what happens? Less innovation. Unhappy customers. Deteriorating company culture. Everything snowballs until the company implodes.
Need an example? Just look at how a disgruntled Groupon employee describes his experience on Glassdoor, a site where employees can leave reviews on companies they’ve worked for.
- Immense pressure to hit unrealistic sales goals
- Management out of touch with what’s going on during phone calls (it’s getting harder and harder to close deals as more and more people don’t want to work with Groupon)
- Used to be a fun culture. Now it’s all about the bottom line and feels like your typical call center
- Sales staff are worked to the bone
- Everyone is miserable and they treat the customers ( merchants) as well as employees with little respect. All they care about is how much money groupon makes. They also created a “boiler” room environment and micromanage to the 100th degree. They suffocate you and you can barely breath or go to the bathroom with out feeling guilty.
- They make you feel guilty to take a Saturday off to go to a wedding.
- Sales staff cries all the time.
Seriously? The sales staff cries all the time? How does it ever get to this point? It’s because people get blindsided and lose track of their initial mission: to help solve people’s problems and make the world a better place. All of a sudden, it’s about hitting unrealistic deadlines and working people to death.
The People That Do It Right
Then you have the people that are committed to the customer 100% of the time. These people are laser focused on building a great user experience – great website design, excellent customer service, and great ideas. And what happens when you can deliver on your mission? All your key performance indicators increase across the board – customer lifetime value, return on investment, increased engagement – these all come naturally when customers are happy. Let’s take a look at a few examples.
Gary Vaynerchuk – What’s the ROI of Your Mother?
Best selling author and entrepreneur Gary Vaynerchuk took his wine business from a $4 million dollar business to a $60 million dollar business by listening and caring about his clients. He was on Youtube creating educational wine videos while his critics sat back and laughed at him.
You can just imagine how the haters used to think:
“There’s no ROI on those videos.”
“Why are you wasting time and money on stupid videos?”
Look who’s laughing now? Vaynerchuk goes out of his way to create a remarkable experience for his clients: from calling every single one of his customers with a ‘thank you’ to shipping an autographed Mark Sanchez jersey to a customer, he does what not many others are willing to do. And that’s why he’s head and shoulders above the competition. But what’s the ROI in that?
What’s the ROI in television ads or magazine ads? What’s the ROI of customer service? What’s the ROI of your mother?
It’s important to measure and track key performance indicators, but some things (as of today) are still tough to track. For example: the ROI of being remarkable to customers. You might not know what the ROI is, but you know that you’re doing the right thing. And you know ‘the right thing’ has led to success for many customer focused companies such as Amazon, Zappos, and Nordstrom.
Zappos Makes 50,000 Product Videos
In 2010, Zappos decided to create 50,000 product videos. Yes, product videos have shown to give a boost in conversion rate for different niches – but videos also take a significant amount of time and resources to produce. Most executives don’t like to wait. Most of them think: ‘Wouldn’t it be better to pour that money into more advertising?’. That might be the route to go with if you’re impatient, but here’s what Zappos said about their product videos:
Product videos is to help establish an emotional connection with our customers and help them make a better decision. This team has done a good job this year in enhancing the user experience – Laurie, Zappos Video Product Manager
“Emotional connection with our customers.”
“Help them make a better decision.”
“Enhancing the user experience.”
See the pattern? Customer. Customer. Customer.
It’s tough for a large company to make a massive investment like this without clearly knowing what the ROI might be. But Zappos knows that product videos help reduce friction in the buying process and create a remarkable experience that other e-commerce stores can’t deliver. That’s how they get people to talk about them and that’s how they get return customers.
Key Takeaway: Broaden your crosshairs so you can take a look at your other initiatives. What are other competitors doing? What initiatives could use work? What are your customers’ pain points? Go out there and be remarkable – there’s more to it than just ROI.
Sure – this stuff takes a lot of time and effort. That’s why most people are too scared to do it. But look at the companies that do – they seem to do just fine
What are some other examples great customer-focused companies that you know of?