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Welcome to the Jungle, I Mean Boardroom – Presenting The True Return on Investment (ROI) of Social Media Marketing

October 27, 2010 By Glenn Gabe

Last Wednesday, I presented at Trenton Small Business Week on behalf of the Princeton Chamber of Commerce. The topic of my presentation was, “Understanding the True Return on Investment (ROI) of Social Media Marketing”. It’s one of my favorite subjects since it combines two topics that I’m extremely passionate about, Social Media and Analytics. Actually, it combines much more than just those two subjects, which comes across as I take people through the 53 slide presentation.

Although Social has gotten a lot of coverage in digital marketing, it’s clear that business owners are still wondering what the return will be. As I explain during the presentation, there unfortunately isn’t an easy formula for calculating ROI when it comes to Social Media. One of the core reasons ROI is tough to calculate is because Social Media impacts so many other channels and efforts, that it would be hard to run a straight formula. In addition, I’ve found that most companies completely underestimate the time and resources needed to effectively drive a Social strategy. And time and resources can quickly be seen in your costs. So, the combination of not understanding the ways Social is helping your company mixed with easily seeing the costs involved makes for a lethal combination from an executive viewpoint.

The Digital Ecosystem and Tracking
During my presentation, I first want to make sure the audience has a solid understanding of the digital ecosystem, including how all the various parts can work together (and often do). After that, I try and explain the various ways that Social Media can impact the bottom line. That includes impacting both revenue and costs. And weaved throughout the presentation is an extreme focus on tracking and analytics, with the core point being that if you’re not tracking your digital marketing efforts on a granular basis, you’re essentially flying blind. And if you need to make a case for your Social Media efforts to your boss or executive team, then flying blind won’t turn out very well for you. If you are only armed with opinion, you might be kissing your budget goodbye. In my experience, you can debate opinion until the cows come home, while data is hard to ignore. Always come armed with data.

You’re On in 5 Minutes. And Don’t Waste My Time Mr. Social Media Hot Shot
After I go through numerous examples of how Social can impact a business, the presentation culminates with one slide that hits home for many marketers. It hits home because it puts the audience in the role of having to present to an executive team that wants to know how the company’s Social efforts are impacting the business. The slide presents a long list of possible answers to that question (based on the tracking you will hopefully have in place). So, I’ve decided to provide that list here in this blog post. It is by no means complete, but I think it gives you a quick understanding of the types of data that can be presented to make your case.

Before you view the list, here are a few important notes:
1. Every point in the following list will not tie to your own business. I’m simply providing possible answers to questions about Social Media ROI based on what I have seen first-hand. Also, I have been on both sides of the presentation. I have led presentations like this, but I have also helped executives understand the ROI of their social efforts (as a consultant).

2. In order to provide answers like what’s listed below, you must fully understand the various ways that your specific business can be impacted from a cost and revenue standpoint. Every business is unique. Don’t jump in without fully understanding the specific nuances of your own business.

3. You must have a solid strategy in place for Social Media Marketing. That’s not simply setting up a Twitter account and creating your Facebook Page. If you blindly jump in, I can tell you with almost 100% certainty that you will fail. And many companies are failing when it comes to Social Media Marketing. My presentation covers the core reasons why this is the case (but that’s for another blog post).

4. You must have tracking in place. As mentioned earlier, do not fly blind. Map out an analytics strategy in order to track both on-site and off-site metrics. Track as many KPI’s that make sense for your business and have a mechanism in place for tracking and trending that data. Note, you should track both quantitative and qualitative data. Remember, we are talking about “Social”, so some of your data will include actual correspondence (emails, tweets, messages, comments, etc.)

Setting The Stage – Welcome to the Jungle
As you step into the boardroom, you notice that the room goes silent. The CEO gives you a minute to hook up your laptop and then says, “OK, I gave you a budget last year to launch our Social Media efforts. We want to know today how that’s doing. So, what’s the ROI of Social Media FOR US?

{So, if you’ve mapped out a solid strategy, executed at a very high level, have tracking in place, and understand all the ways that Social can impact your business, your answer might look like the following.}

Well, I can’t give you a hard ROI number today. {3 members of the executive team gasp while the CFO snickers.}

But, I do have a number of data points to present.
{Remember, data is good, opinion is bad.}

Since we started our Social Media Marketing efforts 12 months ago…

Overall site traffic levels have increased by x%.

Traffic from Social Media sites has increased by y% (as you show trending graphs for each).

Overall revenue has gone up by x% since we launched our Social efforts…

And revenue directly from Social Media sites has increased by y%, but this doesn’t tell the whole story. More on that shortly. {BTW, to show revenue from Social, you set up an advanced segment to only show data from all Social sites.}

Overall support costs went down by x% as we were able to handle y# of customer issues via Twitter and Facebook.

Further, according to a post on Bitcoin Era Erfahrungen, based on using Social Media to nip support problems in the bud, we saved x # of customers that were ready to leave us. Our typical response time was y minutes from the time of the first sign of a problem (via monitoring real-time updates.)

Here is a document containing all customer and prospective customer correspondence via Social Media for the past year. {Document is so long is rolls out onto the floor.}

Since we know how much it costs to acquire a customer and how long it takes for a customer to become profitable, our Social efforts have saved the company $x in cost (by decreasing the Quit Rate of customers and not having to make up for those lost customers).

Our Social efforts also drove y # of new customer sign-ups, with the strongest number of sign-ups coming from blogging, Twitter, Facebook, and YouTube. Trending shows an increase in new customer sign-ups 4 months after our Social efforts launched, while maintaining higher levels of sign-ups throughout the year. (The black hole of Social Media was 4 months for our company.)

We increased our in-house email list by x number of subscribers…

With a majority of new sign-ups coming from organic search, blog posts, and referrals from both Twitter and Facebook. More on how Social impacts SEO soon.

And our in-house email list drives y% of revenue for the site (our second largest driver of revenue for the site.) Each subscriber accounts for $z per year.

We now have x Twitter followers and y FB fans.

These two assets enable us to engage our customers on a regular basis…

Which leads to powerful insights regarding our company and products, like… (add qualitative data here…) As a specific example, we launched the new version of Product X in March, only to find out via Twitter that many customers were experiencing problems with Y feature. We worked quickly and resolved the issue and formed even a stronger bond with many of those customers. Some of those customers ended up backing us up when other unhappy customers started attacking our company. The resulting positive word of mouth marketing about how we handled the situation resulted in x number of articles written about our company, which led to y number of new visitors to the site, which resulted in x number of new blog subscribers, y number of email subscribers, and z number of FB fans.

Trending shows spikes in traffic, orders, and revenue each time we share special offers, discounts, and exclusive deals via Twitter and Facebook. Here are the spikes I am referring to (showing trending graph with revenue overlaid).

Our blog now has x subscribers…

And our blog has helped us boost our website’s SEO power, which has led to an increase in natural search rankings…

And SEO accounts for x% of revenue on the site. It is currently the top driver of revenue.

Further, our blog accounts for most of our website’s inbound links (the valuable links anyway). These inbound links have a direct correlation to the trending you are seeing in this graph. {showing trending again} We’ve seen an increase in rankings, organic search traffic, and revenue from organic search. And there is no advertising spend for organic search traffic (while showing budgets for paid efforts).

Our increased natural search rankings led to a decrease in paid search spend, which we then reallocated to our Social efforts (to drive more of what I am presenting here).

Our blog also led to guest posts on highly influential blogs and sites. Those posts helped us gain incredible exposure in our industry…

Which led to x # of visitors back to our blog.

Which led to an increase in email subscribers, Twitter followers, and Facebook fans. As presented above, these three assets led to $x in combined revenue.

{Your CEO cuts in: Can you start over? I want to take notes.
The CFO is already through his second pencil, he’s been writing so fast.
Your CMO: {on phone with executive assistant to set up personal Twitter account.}

And after all of this planning, tracking, execution, and presenting, you might just have a new seat in the boardroom (see below). :)

Can You Make A Case Like This?
As you can see, data can be your best friend. You might not be able to easily show the hard ROI from Social Media, but you sure can have a lot of data backing your efforts. In closing, have a strategy in place, understand the black hole of Social Media, track everything you can, trend changes over time, and document both quantitative and qualitative data. This is the type of information that your boss will love (and his boss too). Become obsessed with data. You won’t regret it.

Rethinking Your Viral Marketing Strategy: Why Building a Solid Online Marketing Foundation Should be Your First Priority, Not A Funny Video

April 6, 2010 By Glenn Gabe

Human Pyramid of Online Marketing Channels There are times companies hire me to evaluate their online marketing strategies. Essentially, they want to better understand the potential impact of their efforts and if there are any holes in the strategy at hand. When an idea for a viral marketing campaign crosses my desk, the first thing I like to do is gain access to the company’s web analytics package and start analyzing site performance. Based on the hit or miss nature of viral marketing, my hope is that I immediately see a consistent level of quality traffic (based on conversion) from a number of traffic sources. Unfortunately, that’s not always the case and it’s the first red flag. Then, since viral marketing campaigns usually need a kick-start, I review how strong of a presence the company has on various social networks. Again, my hope is to see a solid presence and strong engagement via blogging, Facebook, Twitter, etc. Once again, that’s not always the case and could be extremely problematic for the company I’m helping. Based on what I explained above, here’s a question to think about (and one I’ll address in the rest of the post):

Why in the world would a company spend a lot of money, time, and resources on a viral marketing campaign without already having a solid online marketing foundation in place?

In my opinion, and based on my experience, the company pulling the trigger on the viral campaign without having a foundation in place could very well be setting itself up for failure. If my analysis reveals a lack of consistent, quality traffic and a poor presence on social networks, then I believe the plan needs to be adjusted (in a big way). I usually recommend that they spend the budget allocated for viral marketing on building a solid online marketing foundation instead. Then, once the foundation is in place, the company can layer viral marketing on top of that foundation. Let’s explore why.

Quick Note: I’m referring to viral marketing and not word of mouth marketing (wom). I know there is a lot of confusion about the difference between viral marketing and word of mouth marketing and you can read this previous post of mine to learn more.

Consistent Quality Traffic, A Critical Element To Your Online Marketing Success
I explained earlier that I usually dig into a company’s reporting to better understand their current traffic sources and quality of traffic. In my opinion, when it comes to driving traffic, there are too many companies focusing on short-term gain versus building a long term strategy. There are some people that want a quick win, but that’s definitely not a great way to look at online marketing. If you develop the right strategies, you can build a long term plan for driving consistent and quality traffic via a number of traffic sources (building the solid foundation I have referenced numerous times in this post so far). For example, organic search could be driving targeted visitors across tens of thousands of keywords on a regular basis. And by the way, there is no ad spend for that targeted traffic. In addition, a well planned SEM strategy could yield high quality traffic across a wide range of targeted categories and keywords in paid search. Also, SEM could supplement your SEO initiative, enabling you to provide air cover for SEO as you strengthen your organic rankings. Also, if you want to consistently drive customers back to your site, then building a well-scrubbed in-house email list is a smart move. I haven’t even mentioned RSS subscribers, Facebook fans, Twitter followers, other social networks, etc. This foundation (which includes a number of online marketing channels), is worth its weight in gold. If you don’t already have a foundation in place, then building it should be your focus, not creating a viral marketing campaign. You can get to the viral marketing campaign later on…

If You Are Lucky, Viral Marketing Provides a Spike in Visitor Traffic, Then a Quick Falloff: Spike in Visitor Trending

Instead, Building a Solid Online Marketing Foundation Results in Consistent & Quality Traffic:

Consistent Visitor Trending

Viral Marketing Fails More Than It Succeeds
Based on what I just explained, you can understand why I’m sometimes shocked to see a viral marketing plan planned when a strong online marketing foundation hasn’t been developed yet. Think about it, why wouldn’t you spend that budget on building a strong foundation versus spending it on a short-term viral marketing campaign? And by the way, that viral campaign will likely fail performance-wise. I’m not saying that viral marketing can’t be successful, but viral marketing fails more than it succeeds. When most people think of viral campaigns, they tend to just remember the successful ones. Nobody remembers the campaigns that bomb, which makes sense since those campaigns never went viral! :) Also, there are times that a successful viral marketing campaign was preceded by dozens of other attempts that failed. The fact of the matter is that you never know what will go viral. It’s hit or miss, and your business shouldn’t heavily rely on “hit or miss” as its core online marketing strategy.

Although I help companies with brainstorming ideas for viral marketing campaigns, I would never recommend a viral campaign if the other (and more powerful) areas of online marketing weren’t covered already. In addition, even if you end up having your campaign go viral, that doesn’t necessarily translate to outstanding financial performance. If your goal was just exposure or links, then that’s fine. But, if your goal was conversion, then you might not be so thrilled with the results. That’s why if you clearly understand your goals, you can better structure your online marketing campaigns to reach those goals. That might sound obvious, but tying strategies back to your core goals can help keep you on the right path and avoid the inevitable: a funny video with 100 views on YouTube, a fan page with no fans, and an empty Twitter account only followed by a few spammers.

Social As Your Launching Pad
Earlier I mentioned the importance of social media marketing on the impact of viral campaigns. The reason is simple. If you want something to go viral, there’s not a better way to get the word out to a wide range of targeted people than via Facebook, Twitter, Blogging, etc. But, it’s much easier if you already have a strong following when you launch your campaign. If you have that following across social networks, then you have a much greater chance of gaining traction. And traction is exactly what you need in order to spark your viral campaign. Without the spark, you might just end up in the viral marketing deadpool. And that’s not a pretty place to be. :) By the way, read my post about The Twitter Effect on SEO to learn how Twitter can impact traffic, inbound links, and rankings in organic search.

Try Kick-Starting Your Viral Campaign With The (Lack of) Social Media Presence Listed Below:

Unfortunately, many companies haven’t spent the time to build a presence across social networks. They might have quickly set up a Facebook page, a Twitter account, a shell of a blog, and subsequently they have nothing to leverage when their viral marketing campaign goes live. Compare that situation to a company that already has 10K fans on Facebook, 7500 Twitter followers, thousands of blog subscribers, 400 subscribers on YouTube, etc. Having that following across social networks will greatly improve your chances of getting the word out quickly about the viral campaign. On the flipside, if you practice drive-by social media (or don’t participate at all), then you won’t have a foundation to leverage when your campaign launches. Drive-by social media is the practice of quickly setting up accounts at social media sites and then dropping a message about your own content or campaigns. It never works and is embarrassing for agencies and companies that do it… Instead, you should build fans, followers, and subscribers the right way, which will enable you to reap great rewards from your hard work. And you just might see that message go viral… The core point to remember is that you want to build your following BEFORE your viral campaign goes live and not as it goes live.

Build Your Foundation, Then Go Viral
So before you give approval on that sexy viral marketing campaign, make sure you fully understand what your current online marketing foundation looks like. Are there cracks in the foundation, do you have little SEO power, should you restructure your SEM account, and are you currently engaging targeted people on social networks? If you answered “no” to some of those questions, then don’t launch your viral marketing campaign yet. Spend that budget on building your online marketing foundation and then layer viral marketing on top of it. You won’t regret it.

Say Cheese Please – How The Right Marketing Campaign About Lactose Intolerance Could Add $1.8 Billion To The Cheese Industry Annually

February 2, 2010 By Glenn Gabe

Hi. My name is Glenn Gabe and I’m lactose intolerant. That’s right, me and about 40 million other Americans. Although it’s not the worst thing that can happen to you, it’s definitely a bit of a downer. I was 32 when I figured out that I was lactose intolerant, and that’s also when I learned how much of a nuisance it was to exclude certain foods from my diet. And those foods were some of my favorite things to eat, including milk, cheese, pizza, ice cream, to just name a few. Cheese, in particular, is in so many foods and meals that you eat on a regular basis, that it’s almost impossible to avoid. Now, that’s assuming that I really do have to avoid cheese. More on that shortly.

What is Lactose Intolerance?

For those of you not that familiar with lactose intolerance, here’s a quick rundown. Lactose is the sugar found in milk. Lactase is the enzyme that your body produces to break down lactose. Lactose intolerant people don’t produce enough lactase to break down the lactose they ingest. And if it’s not broken down, it causes problems (to varying degrees). For most people the symptoms aren’t horrible, but can be more of an annoyance. Since milk is a core ingredient of cheese, you would think that cheese would cause serious problems for lactose intolerant people. Not so fast…

Cabot is Sharp (And I Mean Smart)

I was making lunch about a month ago when it happened. I’m typically stuck using some flimsy science cheese for my sandwiches or choosing from the anemic selection of lactose free cheeses available. That day my wife ended up taking out her favorite cheese, which is Cabot Extra Sharp Cheddar. By the way, that’s like dangling a gourmet sandwich in front of a person that’s been stranded on an island for 5 years. :) After a quick glance at the cheese, I wiped the drool from my face and went back to my science project, I mean lunch. That was until my wife glanced at the side of the Cabot packaging. She noticed a small message on the side of the package that read “Lactose FREE”. Huh? I dropped my sandwich on the floor and ran over. Was this a mistake? Are they messing with me? I checked to make sure I wasn’t being punk’d and then I started doing some research.

Cabot’s Packaging Promotes Lactose Free Cheese:

After doing some searches, I couldn’t believe what I was reading… It ends up that MOST aged cheeses are lactose free. From what I gather, the aging process yields cheese with either very low amounts of lactose or 0 grams of lactose. That includes cheddar, swiss, romano, provolone, etc. Needless to say, I was ridiculously excited. I’m not sure if all the cheeses listed have 0 grams of lactose, but most have such a low amount that they cause no problems for lactose intolerant people.

Where Were The Cheese Companies?

Then it hit me…why in the world aren’t cheese companies promoting this? Is there some reason they don’t want people to buy more of their cheese? Why didn’t I know about this? And why doesn’t the greater lactose intolerant community know more about this? I know quite a few people that are lactose intolerant, and I’m convinced that few of them actually know what they can and cannot eat! While doing my research, most of the search results were to forums and question and answer sites where people like me were asking questions about lactose free foods. Almost none of the major players in cheese ranked for the topic. Finlandia did have a page about how its cheeses were naturally lactose free, which is great, but I think more needs to be done…

The Revenue Implications of Smart Marketing

I couldn’t help but think of the massive revenue impact of effectively promoting this message to targeted people. How could cheese marketers get the word out via a number of channels?

A Target Market of 40 million lactose intolerant people…

I don’t know about you, but a target market of between 30 and 50 million lactose intolerant people provides a pretty darn good opportunity. And the fact that many of those people are dying to eat the foods they once loved (like cheese) makes it even a stronger opportunity. If cheese manufacturers or the cheese industry, decided to launch a thorough marketing and education campaign, I can only think they would strike gold. Simply getting the word out that most cheeses are low in lactose, and many are lactose free, could be a windfall for the cheese industry. There’s actually nothing to sell… your target market wants to eat cheese. They just can’t eat it (or so they think). A well-crafted campaign combining TV, Viral Marketing, Social Media Marketing, Search Marketing, Blogger Outreach, etc. could be huge for the cheese industry. It could be a cheese extravaganza!

Here’s an example of how simple it could be given the desperate eating state of most lactose intolerant people are. Jim and Laura work together:

Jim: Hey Laura, you can’t eat cheese, right?

Laura: Yes, unfortunately I’m lactose intolerant… Are you rubbing it in?

Jim: No, I just saw a video on YouTube explaining that most cheeses are low in lactose and many have no lactose at all… You should check it out.

Laura: WHAT?? Get out of my way! {She tackles Jim to get at his computer, clicks play on YouTube and shoots out the door to the store to buy 16 blocks of aged cheese.}

Revenue Lift: Now That’s A Lot of Cheddar

Let’s do the math. If you reached even 25% of lactose intolerant people in the United States, and they ended up spending an additional $15 per month on cheese, then you are looking at a lift of $1.8 billion per year. That’s a lot of cheddar, pun intended. :)

40 million lactose intolerant people in the US

25% = 10 million people

10 million x $15 per month = $150 million per month

$150 million per month x 12 months = $1.8 billion per year in additional revenue

Moving Forward

If I ran marketing for a cheese company and I was looking for ways to increase revenue, I would launch a killer campaign that engages the lactose intolerant market. Why try and get a .5% lift from the people who already buy and eat cheese when you can get a much greater lift from people that are dying to eat cheese, but just THINK that they can’t.

Now that would be sharp. :)

The Domino’s YouTube Video and the Ripple Effect on Fast Food Restaurants

April 30, 2009 By Glenn Gabe

My guess is that you’ve heard about the appalling Domino’s YouTube video by now. It’s the one featuring two employees performing some disgusting acts to ingredients as they prepare orders for customers. For example, one employee sticks pieces of cheese up his nose while making a sandwich with that very cheese. And if you watch the video, it only goes downhill from there. The employees then decided to upload the video to YouTube for the entire world to see. You know, because nobody visits YouTube, so they probably wouldn’t get in trouble, right? :) The videos (which I won’t link to from this post) went viral, which ignited a PR firestorm for Domino’s on a massive scale. Patrick Doyle, the President of Domino’s, released his own YouTube video explaining more about the situation, but the damage had been done. The two employees have been charged with felonies for food tampering, and I believe Domino’s is considering filing a civil suit against them (although what could you really get other than a moral victory.)

I’ve been asked at least one hundred times over the past few weeks what I think the impact will be on the Domino’s brand? Will the incident impact sales? How long before people forget about it? Is it already over? These are all great questions, but I unfortunately don’t have a crystal ball. That said, you don’t have a to be a Harvard MBA to know this will impact sales, it has tarnished the brand, and it will ultimately lead to poor business results (at least in the short term). And yes, this was all done by two people (jerks) who are now learning a hard lesson…but unfortunately at the expense of Domino’s.

Becoming Part of the Domino’s Case Study

Let’s see how an incident like this really impacts a brand and a business. It’s one thing to project how this will impact sales, the brand, etc. and it’s another thing to become part of the case study. Last Thursday I ended up taking a later train home from New York and knew I wouldn’t have much time to make dinner. As I was ready to get off my train, I decided that I would quickly pick something up on my way home. I got off the train and knew there were a few fast food restaurants right by the train station. This is where it got interesting.

As recently as a few weeks ago, I would have no problem making a quick stop at one of the fast food restaurants to pick up some dinner. But this time was different. The first thought that hit me was of the two Domino’s employees messing with the food they were preparing. I feel horrible saying that, but that image was simply the first thing that came to mind. I could not for the life of me get that image out of my head. As I walked to my car, I couldn’t get over it. That’s when I pulled out my Blackberry and ended up ordering a much more expensive dinner from a restaurant in my area (even though I knew that I would have to wait 20-30 minutes to pick it up.) Yes, I decided to spend four times the amount of money and wait an extra 20-30 minutes in order to avoid fast food restaurants. As I waited for my food at the restaurant, I started to think about how many other people this might have happened to. How many people were about to order from Domino’s, stop off at Taco Bell, visit a Burger King, and then thought of the infamous Domino’s YouTube video? How much revenue has Domino’s lost? And beyond Domino’s, how much revenue is being lost by the fast food category based on what happened? I believe there is a ripple effect from the Domino’s incident.

Could It Happen Anywhere?

Listen, I’m not naive enough to think that more expensive restaurants are free from food tampering. But, I did work in restaurants growing up and I know what an Executive Chef is like… Most are fanatical about their kitchen and their reputation. They run a tight ship and would probably physically harm anyone on their staff that pulled the sort of stunt that the two Domino’s employees pulled. So, when I thought about where to buy my dinner, I went with the higher end restaurant with the Executive Chef who would saute any person who thinks it’s funny to stick cheese up his nose and use it while preparing a dinner (or worse). I’m sorry Domino’s, I really am, but I’m not sure I can get over this so quickly…

How Many Glenn’s Are Out There And How Much Money Is Being Lost?

Let’s say there were 50,000 people in the United States like me who decided to bypass fast food restaurants for lunch or dinner. Next, let’s estimate that they would have spent ~$25 per month. That’s probably a few meals at a fast food restaurant.

50,000 people x $25 per month x 12 months would be $15 million in lost revenue per year.

That’s a lot of dough, no pun intended. So the two ex-Domino’s employees could be responsible for approximately $15 million dollars in lost revenue annually. And that doesn’t take into account the damage to the brand… Amazing, isn’t it?

In closing, I feel horrible for Domino’s. They don’t deserve this. In addition, I’m not sure their competitors are benefiting either… If there are others like me, and I’m sure there are, they are running for the hills when thinking about fast food. Personally, I’d rather dish out more money and wait on longer lines to ensure I have an Executive Chef overseeing the preparation of my dinner. How about you?

Post a quick comment below and let me know.

From Positive to Negative Word of Mouth (WOM) in 10 Minutes on a Saturday Morning, Windsor Cleaners vs. Jiffy Lube

January 25, 2009 By Glenn Gabe

Positive and Negative Word of Mouth (WOM) Word of Mouth Marketing (WOM) is undeniably powerful. I’ve written about the power of WOM in the past (Boar’s Head, Pabst Blue Ribbon, etc.) and I still believe that organic word of mouth is one of the most powerful ways to grow your business. And that’s especially true for small businesses. Well, a few weeks ago I was able to see an example of how one business could foster positive WOM and then how another company could generate negative WOM, and all in 10 minutes on a Saturday morning. Yes, I keep a keen eye out for things like this, but it was amazing to see how I could feel so good about one company and then so bad about another in such as short period of time! After I got home that Saturday morning, I started to think about my two experiences and wanted to share them here. I’ll break down both experiences and then give you some questions to think about regarding your own company or business.

Experience 1: Fostering Positive WOM
I’ve been going to Windsor Cleaners in Princeton, NJ for a number of years now. I’ll start with some some basic reasons why I go there. First, they provide an outstanding service. I know, a novel idea, right? Providing a great product or service is obviously the foundation for generating positive WOM. Next, they provide excellent customer service. Third, they go the proverbial extra mile for their customers (which is more than just providing excellent customer service and you’ll read more about this below). So for me, Windsor Cleaners is starting with a solid foundation. In all the years I’ve been taking my clothes there, I have never left unhappy. In addition, they know me as soon as I walk in the door, entering my account number in their system without me having to say a single digit. I like that. I also typically bring my kids with me when dropping off my clothes, and the employees at Windsor Cleaners are always great with them. And you can tell it’s genuine, and not the BS, “oh how cute” that you hear from some people. So in a nutshell, they provide a great dry cleaning service and provide excellent customer service. Now for my Saturday morning story.

A few weeks ago, I walked in holding my 2 year old son in one arm, a pile of clothes in another arm, and I was in a hurry. I also brought in one of my winter jackets during this drop off, and I quickly checked my pockets to make sure I wasn’t forgetting anything. I received my ticket, said goodbye and was on my way. I ended up taking my son to another store in the same shopping center as Windsor Cleaners. So I’m on line in the store and someone taps my shoulder. It’s one of the women from Windsor Cleaners holding my $225 pair of sunglasses. I must have left them in my coat. The woman from Windsor Cleaners tracked me down (without knowing where I was going) to make sure I had my sunglasses. That’s awesome. How easy would it be for her to just put them aside and wait for me to come in next week? Or worse, how easy would it be for someone to just take them, right? The people at Windsor Cleaners never would, but I can’t say that for everyone in this world… This was a great example of a small business going the extra mile and fostering positive word of mouth.

The Positive Impact on Windsor Cleaners
In my opinion, Windsor Cleaners is doing everything right as a small business. They provide an excellent dry cleaning service, they are nice to their customers, their employees seem happy, and they go the extra mile for their customers. Why wouldn’t you like them?? By the way, they aren’t the least expensive dry cleaning business in my area. But I don’t care. It would take a lot to get me to stop going to Windsor Cleaners… And as I’ve said in previous posts, I’m a WOM machine. If I like something, you can’t shut me up about it. I blog about it, tell people at work, tell my friends and family, etc. So, you bet I tell people about Windsor Cleaners. It’s easy… I want them to succeed.

–Next Stop, Jiffy Lube For An Oil Change (Just 5 minutes down the road.)–

Experience 2: Creating Negative Word of Mouth
I pulled into Jiffy Lube to simply get a fast oil change and be on my way. I got out of my car and entered the building, and then waited for someone to check my car. It wasn’t long before I heard, “Mr. Gabe, please follow me.” and that’s when my stomach turned… I’ll stop for a second and ask you if you already know what I’m referring to? I bet some of you do… Actually, I know some of you do (more on that soon).

Are you ready for a Jiffy sales pitch?
And the game begins… I’m holding my 2 year old son and I follow the person from Jiffy Lube out to my car. Now I’m in front of a monitor in the middle of Jiffy Lube’s garage. How nice. :) In a matter of seconds, you are being pitched all sorts of products and services for your car, from the infamous air filter, maybe a cabin filter, something about your fuel injectors, and then some type of engine flush. Really?? First of all, if I was to have something like that done, it probably wouldn’t be at Jiffy Lube. They rush you through the process, hoping for the uncomfortable, “ok, I guess so”. They pull out your air filter to show you how “dirty” it is, and push you just hard enough that you feel like you’re being swindled. I hate that feeling, and I hate their process. They point to the monitor and show you some data about how your car hasn’t gotten this in six months or how you haven’t done that in one year. And of course they don’t tell you pricing while taking you through all that’s wrong with your vehicle. You actually have to ask for pricing (if you’re even lucky enough to retain half of what they threw your way.) I hear this pitch every time I get my oil changed, and to be honest, I’m tired of it.

Forcing Customers Through This Process Is Not Good For Jiffy Lube…
The process I just explained above is where Jiffy Lube goes wrong. I don’t feel confident that I need most of what they are pitching. Do I need some of it? Probably so, but it doesn’t matter. I don’t trust them. I don’t know if I’ve ever witnessed a process that makes me feel so negative, so quickly. Then you’re forced into the awkward situation of declining what they just rattled off, and it’s even a little embarrassing. I can’t imagine that anyone at Jiffy Lube would want it to go down this way. Do you?

Breaking This Down Marketing-Wise
Does Jiffy Lube provide a good oil change service? I think so. I’ve never really had a problem. Their pricing is ok and their employees are generally nice. But, I don’t get a good feeling about going to Jiffy Lube. I think it all comes down to the cheesy sales pitch you get every time you bring your car in… Does anyone in marketing at Jiffy Lube understand how this impacts their brand? I don’t feel loyal to Jiffy Lube. Actually, I could go somewhere else for an oil change 3000 miles from now and not even give it a second thought. By the way, if you’re thinking that an additional air filter can’t generate a lot of revenue, you’re wrong. Start doing the math based on how many locations they have any how many estimated customers get oil changes each day. It sure adds up, but at what long term cost to the company? Jiffy Lube might have generated an extra $20 this time, but what if they lose my business forever? That would be thousands of dollars that Jiffy Lube would stand to lose (and just from one customer).

So Jiffy Lube, please stop the madness. Go visit your locations and see what goes on. I’ll guarantee that you’ll want to change how the process works. I’m not saying that you shouldn’t make sure people have the right information and get the right products or services, but there has to be a better way to do it without making people feel like they are being ripped off. Actually, go to Windsor Cleaners and see how they treat their customers. :)

The Power of the Web Tells Me That…
I’m not the only one that feels this way. I found out that many others feel the same exact way. I tweeted about my last experience on Twitter and received some quick replies and direct messages from others that don’t like the process either. It’s funny, I didn’t mention what was pitched and their messages all revolved around the air filter sales pitch! I found that interesting…so I started doing some Google searches. That’s when I found this. Oh yeah, and this, this, and this. Uh, an entire site dedicated to Jiffy Lube problems and it ranks #1 for jiffy lube air filter? (see screenshot below) And there were dozens of more listings too. By the way, enter Jiffy Lube Air Filter in Google Blog Search. You’ll find some interesting stories.

Search for Jiffy Lube Air Filter on Google

Let me tell you, if I worked at Jiffy Lube, this would be one of the first things I fixed. They seriously need a Customer Service Czar, and now. Someone who comes in with guns blazing and fixes this problem. The power of WOM is undeniable, but the fact that Jiffy Lube has a reputation management problem is also undeniable. It actually makes me wonder what’s getting in the way of fixing the problem… So, the next time you hear a pitch for an air filter at Jiffy Lube, think twice. Maybe you need it, but maybe you don’t.

Think About Your Business…
Is there any part of your business that actually annoys your customers? Do you help generate negative word of mouth? Take a hard look at all your customer touch points, ask your customers for real feedback, and change anything that can be generating negative word of mouth NOW.

So I think it’s clear that Jiffy Lube can learn a lot from Windsor Cleaners about customer service. But more importantly, how much can you learn from them?