It is time to spurn the concept of churn, declares Joseph Jaffe in ‘Flip the Funnel: How to use existing customers to gain new ones’ (www.wiley.com). He urges companies to obsess on reducing churn to zero. “No person should ever have or need to abandon Colgate toothpaste for Crest. No human should ever have or need to switch from AT&T to T-Mobile, from Dell to Lenovo, from Visa to Mastercard, from K-Mart to Wal-Mart. And yet many do.”
Why so? Because companies give the customers way too many reasons to make the switch, Jaffe finds. Examples he mentions are lack of care or simple neglect, poor customer service, losing touch with customers, lack of innovation, and failing to ‘close the loop.’
An interpretation of failing to close the loop is neglecting to use the knowledge, insights, and feedback from customers to actually change or improve things, the author explains. “Using customer suggestions – either solicited or unsolicited – as market research is absolutely mission critical, but it’s wasted and worthless if it doesn’t have a direct line back to the powers that be to assess and ultimately implement.”
He rues that in today’s marketplace the relationships with customers seem to mirror the current divorce rate, which is way north of 40 per cent in the US, and rising! This is owing to an acute lack of patience and staying power when it comes to forging lifelong, inseparable ties with customers, Jaffe decodes.
“Perhaps the reason for this is an insufferable focus on short-term results and the immediate gratification that comes from making the sale. It’s really emblematic of what I call ‘sales sickness,’ an epidemic of sorts, where there is a wholesale abandoning of the ship at the exact moment the cash register chalks up the transaction.”
From AIDA to ADIA
The marketing funnel, aka AIDA (short for awareness, interest, desire, and action), produces customers, but then does nothing with them, Jaffe laments. He finds it inconceivable that with so much effort expended to produce a priceless transaction we all but abandon our intensity thereafter.
But there is light at the end of the tunnel, or the funnel, in the form of a radical suggestion that Jaffe offers: Turn the funnel on its head. Instead of ending with your customers, why not begin with your lifeblood, he demands. ADIA is the flipped funnel, with acknowledgement, dialogue, incentivisation, and activation as the components.
The ‘acknowledgement’ section begins with a series of questions: “When did you last thank your spouse for the hot cup of coffee waiting for you in the morning, or the extra hour you got to sleep in over the weekend? When did you last tell your co-workers how much you appreciate them and what a great job they’re doing? When did you last thank your customers for their business, loyalty, return patronage, and/or referrals?”
Acknowledgement bridges the chasm between everything that happen when we convince someone to buy something from us and what happens next, the author instructs. He bemoans the sad and universal truth that the very second the sale is complete, all genuine empathy and service seem to go out the window.
On ‘dialogue,’ Jaffe’s advice is simple: Provide the customers with multiple ways to contact at will, whether they have a purpose or not. We need to get them talking about the little things, the big things, and everything else in between, he notes.
Apart from establishing customer clubs, forums, communities, or hubs, companies can encourage dialogue by implementing ‘a robust listening strategy to get a real-time handle on customer conversations.’ Another suggestion is to find ‘an optimal mix’ of technology and human resources.
Incentivisation, the ‘I’ in the new formula, is about making customers feel the satisfaction that their purchase counts and that they are not just another statistic; and that their problems are met proactively and comprehensively.
The author cautions that when repeat customers are taken for granted, and they start feeling unappreciated and abused, they may well turn their backs on the company for good.
“And we hasten this process by heaping endless discounts and perks on new customers, thereby basically slapping our existing loyal customers in the face… It is tantamount to feeding yourself by holding a steak knife the wrong way.”
The final part of the flipped funnel, ‘activation,’ is about connecting the dots of social networking to leverage the potential of the wise crowds. “This explodes the number of potential connections and subsequent transactions, based on formalising some kind of structure around which all customers – including current employees – are connected.”
Activation, as Jaffe describes, is a self-sustaining environment with its own currency of both intangible intellectual property and tangible exchange of goods and services. He hopes that within the next five years or less, every self-respecting brand will have some kind of digital or virtual community in place.