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Customer experience and the next 20 years
A few months ago I wrote one of the most popular Good Experience columns ever: Budgeting for Advertising and the Customer Experience [1]. In it, I quoted Amazon.com's CEO, Jeff Bezos, stating that Amazon invests in customer experience, not advertising, to generate word-of-mouth and grow revenues.
I also asked why one potential client I talked to would spend $30 million per year on advertising, yet only $20,000 on improving the experience that customers have when they get to the website.
Just this week I received in my inbox a continuation of those thoughts - from none other than Jeff Bezos. Quoted by David Kirkpatrick in Fast Forward [2], Bezos spoke in New York about how word-of-mouth works:
"Word of mouth is becoming more powerful," [Bezos] said. "If you offer a great service people find out about it..." He predicted that for all businesses, the amount of money spent on marketing and advertising will decline while the amount spent developing better products or services will increase as a result. "If the successful recipe [today] is spending 70% of your money shouting about your service and 30% producing a better service, over the next 20 years that will reverse."
My first thought on reading those words: This is going to get really interesting, really fast. Advertising won't go away, but investments in customer experience are going to grow MUCH bigger.
This makes perfect sense. The spread of Internet connectivity worldwide makes it much easier for people to communicate with each other about experiences they've had - commercial or not - specifically, whether they're good or not. A good experience will spread via the ether of the Internet, powered by millions of thumbs and fingers, typing and e-mailing and texting and IMing the referrals to friends all across the world. (I don't need to tell you that a bad experience will spread the same way - maybe even faster.)
Oh, and advertising might help a little bit on the side, too.
Of course I'm being provocative. None of this will change overnight; advertising will remain an important industry, and ads will still work to expose new products and services. But you heard Mr. Bezos: the amount spent developing better products - some would call it "creating good" - will become the main attraction.
Which brings me to my question for you - or more likely for your coworkers, your entire company. To paraphrase a famous quote [3],..
Do you want to spend the rest of your career selling sugar water, or do you want to change the world?
I'll put it another way: Customer experience is the defining success factor in business for the next twenty years. Learning from customers, creating the experience they want, measuring the success of what you do, continually fine-tuning the service and returning to customers to learn more - this now must be the primary mission of any business that has customers. If you create a great customer experience, you'll almost certainly win.
Oh, and again, advertising might help a little bit on the side, too.
The other thing I take away from Bezos's comments is that we're so very early in this process. As much as companies are beginning to make changes - forming new groups, starting new customer-centered projects - these are just the prelude to what could be the biggest general change to business we've seen in our lives. Thousands of companies, shifting to a customer-centered strategy - not because some flavor-of-the-week consultant told them to, but because customers forced them to - will make for some interesting times.
But most importantly: what role will you play?
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[1] Budgeting for Advertising and Customer Experience
[2] Fast Forward newsletter, by David Kirkpatrick, 11/11/04. It's a good newsletter, but it doesn't seem to contain the signup address.
[3] This is roughly what Steve Jobs reputedly asked John Sculley in the early 1980s when Jobs recruited Sculley to Apple Computer.
I have been interested for some time in using advertising techniques on our website, a govt site persuading people to change their consumer behaviour.
Amazon uses many of the classic persuasive tehcniques (like Cialdini's book on persuading) plus the basic concepts of Aristotle of ethos, pathos and logos.
Amazon uses some of these techniques on its site eg the company has built a reputation and credibility to deliver and for service (ethos). \
Their information about what other people also bought plus the book reviews (which we all know may or may not be genuine) imply that other people recommend this product so it must be ok.
As a web content manager I also try to use stories in the same way the industry our consumers deal with do in their advertisements.
There are still websites around with pompous language. There is a great need to build relationships with your copy Usborne talks about 'building genuine, personal connections between your company and your customers".
Advertising does this, many websites don't. It is nor always easy to get a good online writer or editor but for relatively small increases in expenditure a site can become your advertisment.
I sit at my desk with books like "words that sell" and books by Bly, Usborne and HG Lewis. All this for a govt consumer proteciton site. We have no money for advertising but we know people refer friends to us, journalists praise us and even people in the industry have libnks to us and reproduce our items.
I know this is a major oversimplification of the whole issue but I'm all for using advertising techniques where ever you can.
I don't come from a marketing background I was
a technical editor. But we have to use every tool in the book across all forms of communications and psychology to persuade people to think before they buy.
I have recently evaluated our site against the scale developed by Hoerner. His research was based on earlier research about social interaction btwn tv personalities and their viewers. I think our site does wellon this scale suggesting our site has good interactions with our visitors:
J Hoerner, ‘Scaling the web: A parasocial interaction scale for world wide web sites’ in DW Schumann and E Thorson (editors) Advertising and the world wide web, Mahwah, NJ: Lawrence Erlbaum Associates, pp 135–147
This research is discussed in
I Hammerich and C Harrison, Developing online content: the principles of writing and editing for the web, John Wiley & sons Inc, 2002 (chapter 7)
I believe there are other measures along these lineseg Stanford website credibility and other persuasive techniques eg those Fogg outlines on persuasive technology.
To me this is part of the next 20 years on the web
Man, this stuff turns me on! To think that more folks will be aware of this way-too-small niche is exciting. After swimming upstream for so long, maybe the current will actually begin to change. Thanks for Bezos and Hurst for banging the drum loudly!
The important bit of the sugar water comment is that Sculley was recruited away from Pepsi...