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A Bird in the Queue: Customer Service Is the New Advertising 

Keith Pearce | Aug 2, 2017 316 views 1 Comment

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Let me just get this out of the way upfront: We’re all on the same team. All of us: sales, marketing, advertising, IT, service. So while the things I’m going to talk about may seem confrontational, it is not intended as an “Us. vs. Them” screed. Rather, I’ll be talking about how technology and culture have shifted customer expectations, and that those departments need to rethink their roles — possibly so much that concepts like “advertising” and “customer service” don’t apply to the company of the future.

Companies used to build trust through advertising. The success of the brand depended on messaging that promised a product or service that would deliver a whole new lifestyle. You’ll be faster, smarter, prettier, better at tennis.

But today, consumers are harder and harder to reach with those grand promises through advertising channels. It’s clear that consumers are becoming, simply, immune to the blanket pitch. Historically, companies hung their fate (and budgets) on attracting new customers, while servicing those customers, as anyone who’s spent a hamster’s lifetime on hold knows, has been a distant second priority.

But shouldn’t those existing customers be the real priority?

A Bird in the Hand
Consider: A “Harvard Business Review” story on customer loyalty reported that “increasing customer retention rates by 5% increases profits by 25% to 95%.”

Check the date on that story. It was written in 2000! That’s Y2K insight. And yet, nearly two decades later, we continue to see company budgets allocating big bucks to slapping ads all over web sites and Facebook pages even though the use of ad-blocking software rose 30% in 2016 from the year before, and as much as 85% of younger consumers don’t trust advertising generally. (While some research suggests that trust in advertising is actually on the rise, trust in digital ads sits at 39%.)



But companies have painted themselves into a corner in a way by spending more on ads than on service — placing greater importance on acquiring new customers than on retaining existing ones. Research shows that while companies recognize the importance of retention, most are unsure how to shift resources effectively and how to “measure the ROI of retention tactics”; the result is that “the vast majority of budget increases were on the acquisition side — four out of five companies increased here, whereas only two in five increased retention budgets.”

Customers want deep and long-term relationships with their chosen brands. Companies need to stop thinking like it’s speed-dating. Building out the brand’s customer service component doesn’t just mean creating better call centers to handle problems, it means being available — on the phone or social media or wherever your customers are — to address their concerns and maintain that relationship.

Because really, there’s no better time to advertise the values of a company, to demonstrate what it’s really all about, than when a customer needs help. As I said earlier, that means that advertising and service will start to blend.

Service Starts Before There’s Trouble
In the future, service will determine a brand’s identity and values. What will that mean for companies?

First and foremost, it’ll mean that instead of ads getting the customer in the door and service dealing with problems, there will be a continuity of experience. Ads will still get you in the door (as will customer reviews, which have their own blind spots regarding service), but every interaction after that is about enhancing the experience. That’s where service comes in, and it won’t look anything like the call centers of yore.

New customers need to be onboarded; companies that understand this will design a frictionless onboarding process tailored to who I am, my interests, all of it specific to that first transaction. Service should maintain the relationship by working with marketing, advertising and artificial intelligence tools to create personalized emails that guide the customer through their journey. Problems should be addressed before they appear; a brand should be available 24/7 on social or anywhere a customer might be. Bots will handle most minor customer questions and complaints, leaving the tough stuff for service reps who have AI tools that tell the customer’s whole story at a glance, and offer the ideal next step. With these kinds of measures in place, by the time the customer reaches the renewal stage, her loyalty is assured and there’s no risk that she’ll take her business elsewhere.

Why wouldn’t a company want to invest in longevity?

The Easy Thing or the Hard Thing?
Right now, we’re not thinking about service as a growth engine. But we’re going to be with these customers as they move through these particular life phases. We need to be investing more in that part of the journey than in just getting them through the door.

Without getting on some kind of moral high ground, I think that service is where the company’s values really show up. I think it’s a better articulation and expression of what a company stands for than anything else. Do we invest in people? Are customers getting the most out of what they use our company for? Or is the goal to get the most out of them in the short term and then move on to the next one?

I get it. Transactions are easy. Relationships are hard. It’s time we all grow up and put in the time, and the effort. To do so requires a transformation of all those departments into something more integrated and, hopefully, better.

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One Response to A Bird in the Queue: Customer Service Is the New Advertising

  1. Andrew Rudin August 3, 2017 at 8:19 am (231 comments) #

    Hi Keith: I don’t think the predominant reasoning among executives for prioritizing customer acquisition over customer service has to do with the notion that ‘transactions are easy’ and ‘relationships are hard.’ – though I don’t question that it may occur in strategy development. I think it has more to do with the lifecycle of a business.

    Many of my clients are early-stage companies, and rapid customer acquisition (aka capture) is an important metric for securing additional rounds of funding, and for creating PR ‘buzz.’ It’s not a perfect measurement, but for many, capture rate provides a proxy for many other issues that are of concern to investors, suppliers, prospective customers, and prospective employees. As companies mature, retention becomes a more pressing matter (a huge issue for startup Blue Apron, recently). Sometimes retention is facilitated through implementing technological hurdles (barriers to exit), sometimes through offering outstanding service, and sometimes by maintaining product hegemony. It’s also through implementing what I call ‘loyalty contrivances’, like VIP Customer Clubs. Often, it’s all of these.

    If anything, I’ve seen the focus on customer retention increase. Many companies in the technology arena start with an initial business model of giving away hardware, software, or service (‘freemium’) and plan to retain their customer base through the methods I described.

    Ultimately, I think a brand’s identity and values are more portentous of the service customers receive, and not the other way around.

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