Jay Baer (@JayBaer), author of Hug Your Haters: How to Embrace Complaints and Keep Your Customers, shows us why we should strive to understand our haters and communicate with them instead of getting defensive or — worse — ignoring them altogether.
“When you answer your critics in public, they never see it coming. You can blow their minds and steal their hearts.” -Jay Baer
The Cheat Sheet:
- Customer retention should take precedence over acquiring new customers in any business, yet marketing budgets overwhelmingly exceed customer service budgets across all industries. Why?
- Thanks to social media, customer complaints are more public than ever. A smart company will see this as an opportunity for customer engagement and satisfaction rather than a setback.
- 80 percent of businesses say they deliver superior customer service. Eight percent of their customers agree.
- The Rule of Two: never interact with someone online more than twice. If they love you, there’s no need to answer more than twice. If they hate you, there’s no need to answer more than twice.
- Learn to harness The Hatrix and identify the two types of haters — onstage haters and offstage haters — and understand what they ultimately want (and how you can win them over).
- And so much more…
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We all have haters — all of us. Our natural human reaction is to dismiss them. They are crazy. It’s too painful. Whatever. But haters are not your problem — ignoring them is. Especially when it goes beyond just being personal and it has an impact on your business.
Based on a giant, proprietary research project undertaken for his new book Hug Your Haters: How to Embrace Complaints and Keep Your Customers, strategy consultant Jay Baer found that responding to every complaint, in every channel, every time makes your business — and life — better. He’s here to tell us why in episode 491 of The Art of Charm.
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A lot of businesses really focus on generating new leads and new customers rather than satisfying and retaining existing customers — in spite of evidence that it makes financial sense for a business to cater to the customers it already has. “It’s actually pretty short-sighted,” says Jay Baer, president of strategy consulting firm Convince & Convert and author of Hug Your Haters: How to Embrace Complaints and Keep Your Customers. He adds that it’s a lesson “you learn by lunch in the first day in business.”
“Just a five percent increase in customer retention can increase profits by 25 to 85 percent,” he says, “because of the geometric effect of holding onto those customers and being able to reduce marketing spending accordingly.” It’s something everybody knows, but marketing budgets commonly exceed customer service budgets across all industries — so it’s a lesson that goes largely ignored.
Why? One reason Jay points out is that the average tenure of a CMO (chief marketing officer) is about 15 months. “So they’re not playing the long game,” Jay says. “They [couldn’t] care less, right? They want to pump and dump because they’re either going to move on to a better job or get knocked down to a worse job, but that’s all going to play out in four or five quarters, so they’re not going to think about…building a customer experience to last over 10 years.”
But as more customer interactions are playing out in public spaces thanks to social media, companies are finally becoming more aware of the importance of quality customer service.
“Customer service is a spectator sport now,” says Jay. Whether through Twitter, Facebook, Yelp, TripAdvisor, discussion boards, forums, or review sites specific to certain industries, a company can’t afford to ignore its customers’ complaints. But rather than allowing these complaints to tarnish its reputation, a smart company will take them as an opportunity to engage the customer and address their complaints fairly.
“How you handle customers is out there for everybody to see,” says Jay. “You can use that as a real competitive differentiator and actually make that difference between you and your competitors more acute and reap the benefits of that more quickly.”
The bar’s not very high right now. According to Jay, 80 percent of businesses believe they deliver superior customer service; eight percent of their customers agree. Part of this could be because a third of customer complaints — even in very public forums — go unanswered. “A lack of a reply is a reply,” says Jay. “It says, ‘We don’t care enough about you to even respond.”
So haters — or at least customers who hate some aspect of your business enough to vent about it in public — aren’t really the problem. Ignoring them is the problem. Jay would even go as far as to say they’re your most important customers — they’re complaining because they care.
“Only five percent of unhappy, dissatisfied customers will ever complain in a forum or fashion that the business can find it,” says Jay. “Those people are the canary in the coal mine — they’re the unelected representatives of a much larger group. So you should not ignore them; you should embrace them, because it’s free market research.”
So finding out what motivates such feedback is obviously of great benefit to you and your business. But what do you do when you get a hater whose objections are far removed from the realm of anything for which you’re responsible? Jay says: “What I would do is I would answer that back with a rational reply and say, ‘Well, that’s neither here nor there, because that’s not the business that I’m in. And I appreciate that you’ve got a strong opinion about this, but if you’d like to ask me any questions about [insert business here], I’ll be happy to answer.’
“Customers are not always right,” Jay reminds us, “but they deserve to be heard, especially when they’re reaching out in public because…it’s not so much about making that person happy (although that’s what you should do), it’s about all the spectators…who are going to see how you answer that or choose not to answer that.”
If you let a complaint or a negative review sit in a public forum without any kind of a response, “that negativity partially becomes true,” says Jay, “because you’re not saying it’s not true — so it’s there and it just leeches brand reputation forever. It’s just sitting there like hemorrhaging over time…it could be years, and how many people have seen that?”
Answering a negative review doesn’t even have to be a rebuttal. It could be something as simple as, “We apologize that we were less than perfect; we’ll do better next time.”
But if you can find a way to solve the actual problem, it’s even better — and not just for the obvious reasons. Studies show that If a customer has a problem and the business successfully solves that problem, the customer becomes more loyal than if they never had a problem at all. Unable to solve the problem? All is not lost, because those same studies show that answering just one customer complaint can increase customer loyalty by 25 percent.
Listen to this episode of The Art of Charm in its entirety to learn more about how even the United Nations has benefited from Jay’s customer retention strategies, why Jay keeps writing books, realize the power of connecting with people who will give you honest feedback (in personal matters as well as business), discover The Rule of Two for dealing with negative and positive feedback, harness The Hatrix to identify the two types of haters (and understand what they ultimately want), and lots more.
THANKS, JAY BAER!
Resources from this episode:
- Hug Your Haters: How to Embrace Complaints and Keep Your Customers by Jay Baer
- Convince & Convert (Jay’s strategy consulting firm)
- Other books by Jay Baer
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