Photo by Charles on Unsplash
Content by: Brian Halligan, Co-Founder and CEO – HubSpot
To be sure, a high quality product is critical. But, it’s far from sufficient, and in many cases has been surpassed by “how you sell” that matters. In fact, I would say it is the overall customer experience needs to be ten times better than your competition — from initial awareness through the sales and purchase process, from the first usage of a product/service on through a lifetime of experience with a brand.
I am a living testament to the power of customer experience to attract and retain me as a consumer. I wake up on my Casper mattress, reach to the nightstand for my Warby-Parker glasses, turn on some tunes on Spotify, shave with my Dollar Shave Club razor, don with apparel from Trunk Club, and ride to work in a Lyft. Every single one of these companies sells a quality commodity/service, but has won my business and allegiance by making how I buy an effortless process.
They’ve taken all the friction out of trying something, buying it, returning it, rating it, and buying more of it.
All of them are growing like mad, are less than ten years old, and have found customer experience that is ten times better than their previous competition.
I was in New York City last month and stopped by the “Dreamery,” a space run by Casper mattress where busy New Yorkers can pay $25 to take a 45-minute nap in a luxurious nook — on a Casper mattress, of course. Now, Casper isn’t selling naps; instead, it has found an experience to attract would-be customers to its brand and products. And it doesn’t hurt that the experience is irresistibly Instagrammable.
B2B companies would do well to examine their own customer experience, and identify where it is so frictionless that it delights prospects and customers to the point where they rave about it online; and where it has sharp edges that inflict unintended paper cuts.
A smooth customer experience is like a flywheel that gathers speed and momentum.
I hear a lot of stories from small and medium-sized businesses about how they’ve spotted and eliminated friction in their flywheels to help close deals, get off on the right foot with new customers, improve retention and upsell, and generate valuable word of mouth referrals that lower the cost of customer acquisition.
Washcard Systems sells self-serve payment equipment to car wash and laundromat operators. Pricing of the systems is surprisingly a little complex — almost no two customers purchase the same mix of hardware, software, mobile solutions and marketing materials and services. Purchases can range from the low thousands to the high tens of thousands. So, for more than 20 years, Washcard’s website had no pricing info. Last year, after going through a flywheel friction exercise, the company broke with tradition and provided a glimpse into what a customer could expect.
“We can’t give you a hard number on the cost of your specific location and needs,” reads the top of the new pricing page. “However, we’ll do our best to give you an idea of what the costs could be here.” Since then, the pricing page is consistently among the top 5 pages visited on the site, and more than two-thirds of prospects have viewed the page prior to engaging in a phone conversation with a sales rep.
In fact, the page helps attract new car wash operators whose physical site is still under construction, since they are now able to budget the cost of the new payment system directly into the construction plan, instead of using whatever money is left over after construction has been completed.
At my own company, HubSpot, we used to have a misalignment between high sales rep productivity and poor customer retention. We realized we were making a pretty quick business of selling to some customers who were not a particularly good fit for our solution. But, they were willing to pay, and we paid our sales reps to take that money.
We implemented a somewhat radical new clawback policy. If a customer cancelled their subscription less than eight months after acquiring our solution, the sales rep’s commission would be ‘clawed back,’ taken directly out of their next paycheck. And, as a carrot to go along with the stick, we increased the commission rate and opportunities for promotion to those reps whose customers had a high retention rate beyond the first year. It only took a few instances of howling before the entire sales organization’s success was properly aligned with our customers’ success.
The gap between the closing of a deal and the first use of a product/service is perhaps the portion of the flywheel with the most friction. From technology sales to consulting services to marketing engagements, I’ve heard too many horror stories about the “kickoff” meetings where the new customer finds themselves answering the same questions they’ve already responded to during the preceding weeks of the sales process.
Why doesn’t the implementation team already have this information in front of them? Why aren’t all the necessary people in the meeting? Why isn’t the proper documentation available?
Chargebacks911 sells chargeback resolution software to online merchants, where a mix of front end ecommerce software and backend billing systems can lead to considerable complexity. Sure enough, their on-boarding process used to have its share of potholes, interruptions and false starts — enough to negatively affect the retention rate. As the result of a flywheel friction review, Chargebacks911 made a small organizational tweak: the sales rep sits in on the initial on-boarding call.
The rep has the fullest context of the customer’s challenges and where the vendor’s solution fits — as well as all the implicit knowledge to help bridge communication gaps and make sure everyone is working off the same page. Pulling a sales rep away from making new sales is a tough call, but since then the number of accounts who start in “the red zone” has been cut in half.
Washcard, for its part, found that many of its car-wash clients run their business as a side hustle in addition to a ‘day job.’ This means that time is a premium, and sometimes the implementation of a new car wash payment system sits on the back burner until there is ‘enough time.’ So Washcard has implemented a new workflow to make the process as convenient as possible.
As soon as a deal is closed, their system automatically sends an email to the customer with a link to the setup and training calendar, avoiding the hassle of email/phone tag to find a mutually available time slot. The client manager is assigned a task to compose a personalized welcome letter; the fulfillment manager is assigned a task to get everything ready for shipment, including a printed out version of the welcome letter, a packing list (more than a few implementations used to be stalled due to uncertainty on the part of the customer if they’d received everything yet), and candy (Washcard is a true believer in the customer delight impact of candy). The entire getting-started process is tracked and monitored.
The value of a frictionless customer experience is self-evident: it’s just a good way to treat customers, and it usually saves time and money. Even better, a delightful customer experience will also drive new revenue through upsell and referral business.
Rocky Mountain Industrial Supply (RMI) sells flame resistant clothing to work crews in the oilfield, mining sites, and other heavy industry businesses. Most of the customers who come to them often are not even aware of RMI’s other products — safety goggles, heavy-duty boots, gas detection, inspection supplies. Rather than push a catalog of products on its customers, RMI invites them to free, onsite certification classes (e.g., Gas Detection, Fall Protection, Respiratory Training). Customers fly in from all over Montana, the Dakotas and Wyoming, do some classroom instruction and hands on demonstrations, and they walk away with a certification.
In an industry known for its dirty work (workers are sometimes disparagingly referred to as oil field trash), RMI uses the opportunity to roll out the red carpet for these folks. There’s a catered breakfast and lunch, coffee bar and — no, not a nap room! — a tour of RMI’s spotless warehouse and showroom full of cool safety stuff (which they sometimes are learning to use properly in the training). The value of the certification class, together with the high-end approach, directly impacts customer retention, cross-sell and upsell.
Office Furniture Warehouse (OFW) sells new and used furniture to local businesses in the southeast U.S. Most office managers who manage the purchase of furniture during a move or expansion have had very little experience with the changes involved. In fact, according to the International Facility Management Association, two-thirds of employees tasked with coordinating a commercial relocation don’t have the same job one year later.
OFW’s services include an assessment of the new layout and a recommendation of tasks that should be completed and in which order (e.g., new rooms should be painted before moving in desks and chairs). This helps get the customer relationship started on a good note.
OFW conducts a Net Promoter Score(R) survey of its customers. After a successful move and a high NPS score, OFW asks for a positive mention on review sites. The marketing team has also begun to experiment with a referral program in which customers are rewarded for any new business they introduce to OFW, and already referral business as a percentage of revenue has almost doubled.
WebMechanix, a digital marketing agency, keeps track of valued contacts who move on from their position at a client account. After a few weeks, the previous account manager is pinged with a task to discover where the contact has moved, and to get in touch with them at their new place of employment. This simple task has led to a good number of relatively easy business development opportunities.
From Casper’s Manhattan showroom to Rocky Mountain Industrial Supply’s Casper, Wyoming showroom, modern businesses are finding ways to remove friction from their flywheels and leverage the impact of a delightful customer experience. HubSpot has created an assessment tool for businesses looking to identify sources of friction and build a customer experience that is ten times better than their competition.
NOTE: Net Promoter, Net Promoter System, Net Promoter Score, NPS and the NPS-related emoticons are registered trademarks of Bain & Company, Inc., Fred Reichheld and Satmetrix Systems, Inc.