The Most Powerful Aspect of Social Media
You hear about the experiences your customers are having at your business (good or bad),
but are you doing something about it.
As I've said before it's the difference between what's expected and the actual service received
that will dictate whether or not they will talk about you,
and they are talking,
it's up to you though if you want to exceed those expectations and gain positive word of mouth or negative word of mouth.
Social media is good for a lot of things: building relationships, finding and spreading news, marketing, a good laugh,
it's up to you though if you want to exceed those expectations and gain positive word of mouth or negative word of mouth.
Social media is good for a lot of things: building relationships, finding and spreading news, marketing, a good laugh,
keeping up with your friends and family and a host of other things,
but there is another aspect of social media that most businesses aren't using. Free Feedback !
The best part of Social Media is that it is a marketing tool that also serves as a collaboration tool as well as a marketing tool. When you implement Social Marketing in this collaborative fashion, then you go a long way to building a true social business by harnessing the true voice of the customer.
Building An Empire By Building Brand Ambassadors
Earlier I said that an emphases was being put on bringing in new customers instead of creating brand ambassadors, before you lambaste me though let me explain what I mean by that. Auto dealerships are notorious for being short sighted, they think in terms of today and because of that they tend not to think in terms of compounding customers.
Much like compounding interest, which Wikipedia defines as "when interest is added to the principal, so that from that moment on, the interest that has been added also itself earns interest", compounding customers works much the same way.
Dealership A
Dealership A spends a ton of money on advertising, they have catchy jingles and bring in a ton of customers every month. They give service that is expected but aren't very good at following up. Let's say that they sell 100 new customers every month, by new I mean that they aren't repeat or referrals. Through their advertising they are building top of mind, or so their radio and TV reps are telling them so they keep spending a ton of money each and every month on advertising but they still are only selling 100 cars each and every month.
Dealership B
Dealership B is a referral machine, they treat their customers right and work mainly through word of mouth. Management places an emphases on client follow up but they don't spend much money on traditional marketing so they aren't building a lot of NEW awareness but they are increasing their monthly unit count, but slowly.
Dealership C
Dealership C is a hybrid of Dealership A and B, they have a good marketing mix and spend a fair amount of money on tradition advertising but they also put an emphasis on customer experience and building brand ambassadors and relationship marketing (social media). They understand the Law of Compounding Customers (not really sure if it's a law, I may have just made it up! ) and that each and every single month, because 45% of their sales volume is from repeats and referrals, that they will grow perpetually, if they keep doing what they are doing.
If you follow with me here for a second I will explain in mathematical detail, to the best of my ability anyway, how you can take advantage of the Law of Compounding Customers. Let's say that in month 1, Dealership C sells 50 new customers and 35 referral and or repeat customers for a total of 85 units. Because of Dealerships C's exceptional track record they know that 45% of their customer will either come back or give them a referral.
Instead of starting from 0 each month they know that in any given month, the new customers they sold in previous months will either come back or send them referrals 45% of the time. In other words, out of the 50 they sold the previous month they can expect an additional 22 sales sometime in the future. If this keeps happening, month in and month out, the number of repeats and referrals will compound on the new customers in addition to the repeats and referrals in the previous months.
Breaking It Down
By listening to your customers and increasing the total customer experience in your business you create an environment for rampant word of mouth. If the point of sale experience matches how you portray yourself on social networks and in traditional advertising then you have the beginnings of a truly great customer experience and which increases your chance of effectiveness and frequency at creating influential brand ambassadors.
Building An Empire By Building Brand Ambassadors
Earlier I said that an emphases was being put on bringing in new customers instead of creating brand ambassadors, before you lambaste me though let me explain what I mean by that. Auto dealerships are notorious for being short sighted, they think in terms of today and because of that they tend not to think in terms of compounding customers.
Much like compounding interest, which Wikipedia defines as "when interest is added to the principal, so that from that moment on, the interest that has been added also itself earns interest", compounding customers works much the same way.
Dealership A
Dealership A spends a ton of money on advertising, they have catchy jingles and bring in a ton of customers every month. They give service that is expected but aren't very good at following up. Let's say that they sell 100 new customers every month, by new I mean that they aren't repeat or referrals. Through their advertising they are building top of mind, or so their radio and TV reps are telling them so they keep spending a ton of money each and every month on advertising but they still are only selling 100 cars each and every month.
Dealership B
Dealership B is a referral machine, they treat their customers right and work mainly through word of mouth. Management places an emphases on client follow up but they don't spend much money on traditional marketing so they aren't building a lot of NEW awareness but they are increasing their monthly unit count, but slowly.
Dealership C
Dealership C is a hybrid of Dealership A and B, they have a good marketing mix and spend a fair amount of money on tradition advertising but they also put an emphasis on customer experience and building brand ambassadors and relationship marketing (social media). They understand the Law of Compounding Customers (not really sure if it's a law, I may have just made it up! ) and that each and every single month, because 45% of their sales volume is from repeats and referrals, that they will grow perpetually, if they keep doing what they are doing.
If you follow with me here for a second I will explain in mathematical detail, to the best of my ability anyway, how you can take advantage of the Law of Compounding Customers. Let's say that in month 1, Dealership C sells 50 new customers and 35 referral and or repeat customers for a total of 85 units. Because of Dealerships C's exceptional track record they know that 45% of their customer will either come back or give them a referral.
Instead of starting from 0 each month they know that in any given month, the new customers they sold in previous months will either come back or send them referrals 45% of the time. In other words, out of the 50 they sold the previous month they can expect an additional 22 sales sometime in the future. If this keeps happening, month in and month out, the number of repeats and referrals will compound on the new customers in addition to the repeats and referrals in the previous months.
Breaking It Down
By listening to your customers and increasing the total customer experience in your business you create an environment for rampant word of mouth. If the point of sale experience matches how you portray yourself on social networks and in traditional advertising then you have the beginnings of a truly great customer experience and which increases your chance of effectiveness and frequency at creating influential brand ambassadors.
But, it all starts with listening to your customers and using that knowledge into your business operations.
This helps to make an even better customer experience.
Thank you,
Thomas Ieracitano
Thomas Ieracitano
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