If you know me at all you know how passionate I am about helping organizations build a strategy that creates massive word-of-mouth and literally allows their customers to do the majority of marketing for them…it’s something I am incredibly passionate about…and it works unbelievably well when built correctly. While word-of-mouth is incredibly powerful, there are times when it can be very “dangerous and risky” to an organization.
The issue is created when the focus on SALES/REVENUES clouds the perspective of the leadership team. Quite often companies start at the wrong place…revenue. Revenue is a “result”…not a “strategy”. Starting with the concept that anyone buying something from your company and has “money in their pocket” is a good customer is where it all begins. At some point in time you will lose…sooner than ever before in our new economy.
Not all customers are the same and not all revenue is the same. And to make the problem even larger, not all customers should be spreading word-of-mouth about you! This may sound a bit contrarian but here’s the problem with this strategy.
Just because a customer spends money doesn’t make them GOOD CUSTOMERS…in many companies, there are a large number of the WRONG CUSTOMER. Just because someone has money and is willing to spend it with you doesn’t make them right or good for the company. Money should not be the determinant of whether someone is a good or bad customer.
In companies that have a Customer-Centric/Obsessed strategy, one of the most important, and first steps, is to identify the Personas and characteristics of your ideal customers. Once you clearly understand these personas, then you can determine how to build the CUSTOMER EXPERIENCE that will support these groups and give them an experience that is remarkable and memorable. They will end up spending their money with you (which is great) but more importantly, they will spread word-of-mouth about you to others who are JUST LIKE THEM. Personas know other people with the same persona characteristics.
This is the most critical aspect to driving massive word-of-mouth and to allow your customers to do the marketing for your company. When this happens revenue goes up. The end result will be larger revenues/sales…which is what the company wanted in the beginning.
So what happens if you take the money from the wrong personas? No big deal, right? Wrong. Two bad things can happen…
- The wrong personas won’t be happy with their experience because you have carefully designed your customer experience for a different persona. Because they are different, they won’t be happy. And when they aren’t happy, they tell others…spreading word-of-mouth about a bad experience. All this is caused because they aren’t your right persona for your business.
- The wrong personas are ecstatic with the experience they get from your business. In fact, they really liked the way they were treated and so they decide to go out of their way and tell all the other wrong personas about you. When this happens, number 1 above will happen more often than you want. Most likely they are the wrong persona to help you meet your revenue objectives on pricing and ultimately your margins. So you end up selling more, at a lower margin, to the wrong people.
Money isn’t money. Money from the right personas is very valuable and you should do everything possible to help deliver an incredible experience to these people. Money from the wrong personas leads to a quick short term boost on the revenue side but ends up costing the company a lot more because they have to sustain and support these wrong personas.
The end result is eventually displacing your right personas with more of your wrong personas. You start to gradually cater to them and change your experience so they won’t say bad things about you. Before you know it, you have changed your strategy and are marketing/selling to the wrong personas (usually at lower revenue and higher costs). And in the process, you have started to lose more of your right personas (the higher margin customers that your experience was designed to support).
Recognize this early…stay the course and keep your focus on your right personas…do whatever you can to eliminate the wrong personas from your marketing/sales…enhance the experience to the audience you want and revenues will take care of themselves. This allows you to stay on course for growth, stability, lower risk, and…oh yes, higher revenues.
