Beginnings

I’ve been asked what got me started writing Return Customer. I’d say it was a series of unfortunate events with retail stores that planted the seed in my mind. I wanted a place to vent my frustrations but soon realized that the internet is full of sites bashing companies and each other. I wanted to put a positive spin on things and hoped we could learn something beneficial together.

First Year Highlights

• First Post - Creating Return Customers Starts Here
• Best article involving pirates - Communication When You Can’t Deliver
• I’m accepted into the 9rules community - 9rules for a Successful Business
• Favorite sports analogy - Admit Defeat
• I’m published! - Customer Relations for the Web Guru
• Famous commenter - Guy Kawasaki
• Book most discussed with my wife - Creating Customer Evangelists

Contest Winners

Yesterday wrapped up the Return Customer Birthday Contest. Thanks to those who participated. I drew random numbers out of a hat and the winners are:

• Comment #2: Roger Brown
• Comment #5: Rob Poitras
• Comment #3: Glenn Graves

Congratulations! You should be getting your copy of Getting Real shortly.

Thank You

Thanks for reading Return Customer this past year. I look foward to the coming year and hope you do, too.

I’m currently reading Geoffrey Moore’s classic Crossing the Chasm and read a piece that caught my attention.

Moore describes the beginnings of the PDA market and how several companies including Apple and HP tried and failed to break into the mass market.

PalmPilot came along and was successful where its predecessors failed. They built a simple device that cut out a lot of the superfluous features that caused Apple and HP to fail. According to Moore, the PalmPilot:

just nailed the problem … Success through subtraction is the key lesson here. And that subtraction was made possible by a vote of confidence in design aesthetics and in target marketing. By contrast, the companies who failed had overdesigned for the target market because they were hedging their bets. Ironically, in the act of trying to reduce their market risk, they actually increased it.

This is a beautiful example of focusing on your niche and not trying to be all things to all people. If you’re not sure what to cut out of your feature list, ask your customers.

MarketingSherpa has released a report of ecommerce benchmarks. You can view a summary of their findings in a free PDF.

Overall the data is informative but what really peaked my interest was their research on measuring customer retention and loyalty:

Despite the fact that everyone in this business knows that returning customers are the key to profitability, fewer than 50% of merchants we surveyed said they track loyalty, lifetime value, or retention costs.

Mass merchants, who were more likely to be multichannel marketers, were the least likely to track these ROI indicators. Given the amount many have invested in offline loyalty campaigns, clubs, and cards for their brick and mortar experience, this is a disheartening trend online.

Measure Up

Why would you throw money into a black hole without knowing the return on investment? This indeed seems very foolish to me. If you track your customers and measure results, you can actually see what is working and fix what doesn’t!

Visibility

Loyal return customers should be your favorite source of business. They will often stick with you through thick and thin. Do you know how many repeat customers you have in your business? Get some visibility into this segment to see how effective your business machine really is.

Changes

Only when you have real data in hand, can you make accurate decisions that aren’t based on conjecture or pure opinion. If your returning customer numbers are a small percentage of the whole, why aren’t people coming back? You need to solicit feedback and fix the problems.

Start Today

So pay attention, measure results, and tweak things until they produce what your business needs: more loyal, return customers.

Next week ReturnCustomer.com celebrates its first birthday! Thanks to you loyal readers, it has been a great experience thus far. Here is your chance to get a little birthday present for yourself.

The Contest

1. Name a company that excels in its field and is worth emulating.
2. Tell us why you think the company is a great example worthy of our attention and respect.

Prizes

The nice folks over at 37signals have agreed to give away three copies of their e-book Getting Real which I recently read and thoroughly enjoyed.

The Rules

1. Add a comment below with your name and email address (if you win, we need to contact you!)
2. Tell us the company you like and why you think it is noteworthy.
3. Choose your company wisely because I’ll only accept one entry per person.
4. The contest will be open until I get around to disabling comments on the evening of Wednesday, April 26th. So get your entry in early!
5. Three winners will be selected at random from all entries that meet the requirements set forth in these rules.
6. The judge’s decisions are final. (That’s me)
7. Winners will be announced on ReturnCustomer.com’s birthday: Thursday, April 27th.

Tell Your Friends

Don’t be selfish, tell your friends about ReturnCustomer.com and this contest. They may win the prize instead of you, but they’ll love you forever because of it!

Questions?

If you have any questions, drop me a line and I’ll update the contest instructions if needed. Let’s save the comments below for contest entries.

Have Fun!

Update #1 (April 22, 2006): I simplified a few of the instructions.
Update #2 (April 26, 2006): The contest is closed. Thanks to all those that entered! Winners announced tomorrow.

Getting Real is the self-published e-book by the guys at 37signals. I read their previous book Defensive Design for the Web and currently use their online organizer Backpack everyday. Since my experience with 37signals has been very positive, I gave their latest publication a spin.

What is Getting Real?

Getting Real is a collection of short essays on how to be more effective in building a web application. This book leans heavily on 37signal’s own experience in creating their successful suite of products. It also includes real world examples of success using these ideas. Many of the principles described will sound familiar to you if you’ve followed the authors’ blog Signal vs. Noise.

Get to Work

Getting Real is about skipping all the stuff that represents real (charts, graphs, boxes, arrows, schematics, wireframes, etc.) and actually building the real thing.

I hate nothing more than unneeded paperwork that is characteristic of bureaucracy. With an interactive web application, it is nearly impossible to communicate the user experience with any thing short of a working prototype. Besides, once you start building you’ll quickly discover issues that you never could have identified on paper.

Keep it Simple

Getting real is less. Less mass, less software, less features, less paperwork, less of everything that’s not essential (and most of what you think is essential actually isn’t).

The less overhead you have, the easier it is to adapt to changes and fix problems. Planning for hypothetical situations can easily overwhelm your project. Stay focused on the basics and cross the “hypothetical” bridges when they come.

Agility

Getting Real is staying small and being agile.

By nature, the larger the ship, the harder it is to turn. Small teams, unbound by red tape, can easily outmaneuver the bloated org charts of larger companies.

User Experience First

Getting Real starts with the interface, the real screens that people are going to use. It begins with what the customer actually experiences and builds backwards from there. This lets you get the interface right before you get the software wrong.

Using the interface as your guide, you can tailor your underlying code to the problem instead of conforming your interface to the code’s assumptions and restrictions.

Rinse and Repeat

Getting Real is about iterations and lowering the cost of change. Getting Real is all about launching, tweaking, and constantly improving which makes it a perfect approach for web-based software.

The beauty of web applications is that you don’t have to wait for the next year to release another software CD. You can roll out some changes during lunch if you like. Get something working and out for the public and then make continuous improvements.

No Fluff

Getting Real delivers just what customers need and eliminates anything they don’t.

Have you ever used all the hundreds of features tucked away in Microsoft Word? Probably not. Think about what the bare minimum your customers need to succeed and then implement that solution.

Conclusion

I love the simplicity of the ideas and examples presented in Getting Real. Although the content is focused specifically on building web applications, the principles can easily be applied to other business and marketing situations.

I recommend you pick up a copy of Getting Real and see what you can apply to your project today. I had several “light bulb” moments while I was reading that were worth more than the purchase price.

Read more reviews of Getting Real

Buy a copy of Getting Real

Update April 21, 2006:
If you don’t already own a copy of Getting Real, you can enter Return Customer’s birthday contest and win one!

Buy The 22 Immutable Laws of Marketing from Amazon

Authors Al Ries and Jack Trout outline The 22 Immutable Laws of Marketing that you must follow if you’re to be successful in marketing your company. They warn the reader:

If you violate the immutable laws, you run the risk of failure.

With that said, they clearly lay out some contrarian concepts that may be hard to swallow for existing old-school business. The authors concede:

If you apply the immutable laws, you run the risk of being bad-mouthed, ignored, or even ostracized.

While these two points may seem to contradict each other, if you’re successful then your track record will silence the naysayers. If you have a small company or are just starting a business you can take these 22 laws and use them to your advantage against the big boys.

This book was written in the early 1990s so many of their examples are slightly dated. However, don’t let that stop you from reading this book because the principles discussed are timeless and applicable today more than ever.

Some of my favorite Laws are:

#2 The Law of the Category

If you can’t be first in a category, then set up a new category you can be first in.

You may not be first to market with your product but you can create a niche that will still be very profitable.

#7 The Law of the Ladder

The strategy to use depends on which rung you occupy on the ladder.

Evaluate where you company stands in the customer’s mind. Do they view you as the leader in the industry? Or a few steps behind at number two or three. You can’t claim to be the #1 company if you aren’t. Avis has been very successful at playing up it’s #2 status with their marketing campaign “we try harder.”

#9 The Law of Opposites

If you’re shooting for second place, your strategy is determined by the leader.

To successfully compete against the industry leader you need to take an opposite stand. This “opposite” must be a real opposite and not something you just make up. You can’t claim your product is fast because that implies your competition is slow. Are they really? Pepsi took the opposite stand against the “classic” (read: older) Coca-Cola by saying that Pepsi is “the choice of a new generation.”

#13 The Law of Sacrifice

You have to give something up in order to get something.

You can’t be all things to all people. Focus in on your niche and you’ll have to give up some potential customers. However, sacrificing those “general” prospects will enable you to become the go-to company in your niche.

#18 The Law of Success

Success leads to arrogance, and arrogance to failure.

The bigger and more successful your company the more degrees of separation top management will have from the common worker and the customers. Never lose sight of the customer even when you’re wildly successful. When you no longer have a finger on the pulse of the customer, your company will start to decline.

Apply the Laws

The 22 Immutable Laws of Marketing was a very quick read and will give you lots of food for thought. I recommend you read the book and pick a few Laws that you’re violating. Work on correcting those and you’ll be on your way to marketing success.

Read more The 22 Immutable Laws of Marketing reviews on Amazon.com

Buy The 22 Immutable Laws of Marketing on Amazon.com »

Have you read The 22 Immutable Laws of Marketing? Tell us what you thought of the book in the comments below.

Most of the transactions you complete on the web generate an automated confirmation email. These come from email addresses like these:

• auto-confirm@amazon.com
• SouthwestAirlines@mail.southwest.com
• system@backpackit.com

Have you ever hit reply and responded to one of these emails? Your email probably bounced right back to you.

I’ve written before about making your reply-to email address a real company monitored inbox. However, if companies insist on having no-reply emails they need to better communicate that the email address isn’t monitored.

Most companies throw a sentence in the email stating you shouldn’t reply to the message. Others have a more jovial approach. What if the “from” email address clearly stated the situation?

Website monitoring service Montastic sends emails from this address:

no-reply-i-am-a-computer@montastic.com

When I saw that address I immediately understood its purpose:

• I knew I couldn’t reply to the email
• I knew the email address wasn’t monitored
• I didn’t have to read the email message searching for an obscure “Please don’t reply” sentence
• I knew the Montastic guys had a sense of humor

If you’re stuck with automated emails for which you can’t monitor responses, at least spice up the return address!

Think about the last time you had to call a customer service phone number and tried to talk to an actual human being. Were you successful? Odds are you had to navigate a convoluted menu system by punching numbers on your phone. If you were lucky, you got to “speak” to the computer and tell them what you wanted. It always seems the computer doesn’t understand what I’m saying…

Press 0

There has been lots of backlash against companies that are hiding behind these unfriendly phone trees. Citi’s Simplicity credit card commercials poke fun at phone trees and offer their customers a simple way to talk to a person: press 0.

Shortcuts

I discovered a wonderful listing of phone tree shortcuts at gethuman.com a while back. I have used it multiple times to successfully get through to a real person on the phone.

If your company is in the gethuman.com database and it doesn’t say “Direct to human” or “Press 0,” you may need to rethink your commitment to customer service.

Realize that customers are helping others defeat your obstructive systems to make contact. Wouldn’t it just be better to open the door and let customers easily reach you?

Worth the Cost

You may have to hire a few more call center employees but the focus on customer-friendly communication will be a strong selling point for your products and services.

My wife and I recently purchased some products from three sites we had never before used. I’m usually a little apprehensive about purchasing from a new online site because they haven’t yet established a relationship of trust.

The big thing that helps build trust for me is the professional appearance of a website. Take a look at the following three sites. Which one do you think would deliver the order accurately and in the most timely manner?

• dentaldepot.com
• isokineticsinc.com
• currentcatalog.com

So my guess is whichever one you picked to be the best, it wasn’t dentaldepot.com. Well to our surprise, dentaldepot.com came through with a timely and accurate delivery. The other two sites left us wondering “where is our order?” for too long.

Judging a Book by its Cover

How many customers has dentaldepot.com never gained because its website isn’t quite as spiffy as it could be? What does your site look like to a new customer? What message is it sending? Amateur or professional? Trustworthy or shady?

Dress the Part

Your ecommerce efforts should be wrapped in a clean, usable, and professional-looking design. These characteristics are then associated with your company. If you really are a great customer-centric company, your website should convey that message.

Dress Up

You may be a small company with a limited budget. Nevertheless, the web is a great leveling field. You can compete with the big boys because you can look like them. Now, I’m not saying go and copy somebody’s design, but you can dress up your site so it is professional. Doing so will at least alleviate people’s fears when they first visit your site. Once they’ve gotten over the initial hurdle, you can take that trust and deliver a great customer experience.

Before you run out to buy something new or try out a new restaurant, I think it’s a good idea to ask somebody for a recommendation. People love to ask their friends: “do you know a good …?” How many times have you asked that question?

Your friends help ease your fear of the unknown by sharing their experiences. Because you trust them, you’re more likely to follow their recommendations.

You probably also have a go-to guy for computers, cars, accounting, and a myriad of other topics. You also have your favorite plumber, restaurant, or bank.

When you go to an establishment you trust, you will inherently trust their recommendations, too.

This last week I had to get a leaky tire fixed. After my troubles with NTB, I headed back to my trusted Discount Tire Company.

Unfortunately, Discount couldn’t fix my leak because my lug nuts and stems were damaged (by NTB). These parts needed to be replaced. So while Discount couldn’t fix them, the employee handed me a business card for a Brake Specialists shop a few minutes away and told me that they could fix my problem. Once I got the stems replaced, I should come back to Discount and they could fix the flat.

So where did I go to get my tire fixed? The exact place that was recommended to me. Discount Tire didn’t have the expertise or tools to fix my problem but they did know who could.

Partner

I wouldn’t be surprised if on my next trip to Brake Specialists they recommend I head to Discount Tire when the need arose. These two shops have created a referral arrangement that successfully drives business to each other.

Get the Customer Back

If you have a customer that has a problem that you can’t completely solve, make sure you send them down a path that leads back to you. Send them to a trusted colleague that can fix their problem and return them to you. You’ll get credit for helping to solve the problem and get (or keep) some business.

Letting Customers Go

Sometimes you just can’t solve a customer’s problem. That is OK. A solid recommendation from you to your referral buddy will be reciprocated eventually from the other end. It may not be the same customer but the benefits will come. Often you’re building up goodwill with your customers and creating a referral network that will be cashed in at a later date.