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Flip the Funnel: How to Use Existing Customers to Gain New Ones Hardcover – Jan 26 2010
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'...[Jaffe's] fresh outlook on the changes facing the marketing environment provide an insightful read...' (BusinessandLeadership.com, July 2010).
From the Inside Flap
When you consider customer acquisition for your business, think about this question for a moment: how much of your sales come from repeat business versus first-time customers? Now contrast that against how much money you spend against each segment. If you are embarrassed by the gaping disconnect, don't worry; you are not alone. But what if you did something about it? What if you turned everything on its head and instead of ending with a customer purchase, you began with it? What if you focused the lion's share of your effort, energy, and budget on keeping customers versus attracting them? What if you could correct this imbalance and, in doing so, not only get your customers to keep coming back for more, but tell others to do so as well?
Joseph Jaffe loves to take on such sacred cows in business practice, turning them on their heads and shaking them up to see what falls out. Building on what this prolific thought leader started in Life After the 30-Second Spot and Join the Conversation, Flip the Funnel brings you a radically new, radically common sense look at customer experience as the key to business success.
Get ready to do a 180 on everything you thought you knew about marketing as Flip the Funnel:
Explains how to cut your marketing budget and grow sales by focusing on what really matters— your customers and employees
Outlines the real role of social media
Reveals the hidden potential of influencers and evangelists
Illustrates practical ways to use existing customers to reach out to new prospects
Shows how retention can be the new acquisition
Demonstrates key ideas with rich, real-life examples including Comcast, Apple, the Obama campaign, Dell, Panasonic, American Airlines, Zappos, Johnson & Johnson, Coca-Cola, and many, many more
Using his newly introduced "flipped funnel" model (A.D.I.A.), together with a set of new rules of customer service (customer service 2.0) and a revolutionary customer referral and activation process, you'll learn how to transform your existing customers into your best salespeople, discover how to strategically differentiate your brand, save money, and forge lasting customer relationships along the way.See all Product Description
Most Helpful Customer Reviews on Amazon.com (beta)
As is common in business books, Jaffe synthesizes a few new facts and concepts, with back-to-the-basics common sense, a collection of case studies into a strongly presented New World View. Jaffe's main point is compelling. The funnel that gets flipped in the book's title is the new business acquisition sales funnel of AIDA: Awareness, Interest, Desire, and Action.
Jaffe asserts that in today's new media environment - fueled by new social media connections - companies should instead focus on customer retention by having the highest quality customer experience. By focusing on the funnel that begins with a customer's first purchase, delighted customers can then be activated to become evangelists for the company. Thus, the company will grow it's customer base through a powerful word of mouth effect.
Jaffe's new flipped funnel is ADIA: Acknowledgement, Dialogue, Incentivization, and Activation.
As a Marketing Director who is developing a new social media strategy, Flip the Funnel has caused me to view our plans with a new perspective. On Monday, I will be taking the concepts from his keynote and the book to my colleagues at MCH, and I will be incorporating some of the ideas into my strategic plan.
That said, the book isn't perfect. It would have benefited from sticking closer to its most important concepts. Also, some of its case studies and examples aren't fresh. The YouTube PR horror stories of Domino's Pizza and United Airlines have already made the rounds. I spotted some typos and minor factual mistakes, too.
All in all, I recommend the book, and I highly recommend Jaffe's speaking events. He's a terrific presenter with an important approach to business in the age of social media.
By creating a more memorable customer experience and acknowledging your clients, you set the stage for increased customer loyalty -- and profits.
Like Delivering Happiness by Tony Hsieh, this book has a timely message. Anything you do to build loyalty and word-of-mouth with your existing clients in a recession will pay you back in spades.
1. Flip the funnel
Traditional marketing dumps many prospects in at the wide top, to get out a small number of customers at the bottom, where the process ends. This is time-consuming and costly.
By flipping the funnel, you can start with the first purchase and turn a small number of existing customers into many new ones. This can be faster and less expensive, because you are building from a base of people who already trust you -- your customers.
2. Deliver a memorable customer experience
The customer experience is the sum of all contacts, transactions, and encounters between customers and your company, your brand, your people, and your products and services.
Companies like Apple, USAA Insurance, Virgin America, Zappos, and others put serving the customer ahead of profits in the NOW, when customer service happens. This has made them highly successful -- and profitable -- over the months, quarters, and years that follow.
3. Do more of what really matters
You can grow your business in four ways: getting more clients, getting them to buy more often, getting them to spend more, and getting them to refer their friends.
Most businesses spend most of their time on money on the first goal only. This is insanity. Don't be insane. Instead, follow Jaffe's ADIA model:
Acknowledge - Clients, like all people, crave recognition. Examples: a personal thank-you note, regular progress reports, a gift.
Dialogue - Encourage clients to engage in conversation by giving them multiple ways to contact you, such as Twitter or the old-fashioned phone.
Incentivize - Encourage clients to recommend your business to their friends. Example: Reward them, either in cash or with gifts, for every new client they send your way.
Activate - Use social media to communicate with your clients, and encourage them to pass the word via blogs, Twitter, Flickr, YouTube, and Facebook. Example: Create a money-saving tip sheet that clients can download from your blog and share with friends.
Overall, though written mainly for big dumb companies, this book can benefit nimble smart companies that adapt and adopt the ideas.
The real problem Jaffe and similar authors ignore, is the fact that in the vast majority of mature markets, price is a primary factor for most customers and customer service costs money. Even something as simple as employees speaking to customers in a "nice" way when dealing with complaints costs money...you have to train those same employees on handling customer complaints more effectively. Nearly every single aspect of improving a customer's experience costs money, and when the market clearly declares that it would rather have ill-tempered employees or limited interaction with the company than price increases, Jaffe's entire model breaks down.
Another practice Jaffe indicts are company websites without contact info (other than support request forms). I own a web marketing company and we also do web development and design. More than 90% of the customer support issues we have are user error. I've spoken with others in the software business and I'd venture to guess they'd all have similar stories. We currently service those customers, but we've had to move to a premium support model where we charge hourly for support after the first month because we would have to significantly raise prices in order to service all those requests. While we get plenty of complaints about not providing free support, our marketplace has clearly spoken that price is far more important than service.
I've also tried that customer-obsessed service model in the past when I was in the mortgage business about 10 years ago. Of all places, the mortgage business (in the US) was overrun with shady companies trying to bilk customers out of every dollar they had, so I thought customers would really appreciate a loan officer taking the time to try and save them money on their house payments and help them find a mortgage program that would fit their goals the best as opposed to just selling them whatever made me the most money. I thought, after these customers see how much I truly care about their welfare (and I did), they would undoubtedly send me referrals and become lifetime customers. Didn't happen. Not even close. Don't get me wrong, I absolutely had a number of customers who swore by me and flat out told me they wouldn't work with anyone else. Unfortunately, they were out-numbered by customers complaining that my closing costs were 10% higher than Ditech's, even though I'd spend hours and hours on the phone going far above and beyond what any other loan officers were doing.
That was a lesson I only had to learn once, and that lesson was, even though I, personally, look for a company with a good balance between price, service, and a quality product, most people don't do that. Most consumers place significantly more weight on price when making a purchasing decision...to the extent that they'll ignore long-term cost increases (due to poor quality, poor service, etc) in favor of short-term cost savings. Entire industries have been built around this concept.
Jaffe mentions Apple as an example of a company that "gets" service, specifically referring to their "Genius Bars" where you can get your computer serviced by experienced and helpful staff. That all sounds great, but Apple computers are significantly more expensive than their PC equivalents, and as a result their market share is only a small fraction of the entire computer market. Let's also not forget the fact that Apple has a visionary leader in Steve Jobs and an incredibly talented staff pumping out unique products that nobody's tried before...not to burst your bubble, but it's highly unlikely you have a similarly-capable team. Let's also not forget that there was no serious competitor to Windows before Apple took off so the market was hungry for an alternative.
The bottom line is the best chance a business has of growing is by cutting costs, and customer service is expensive (especially in Tech, which this book seems to be focused more on).
The notion that customers are not predictable because they are not linear also makes sense. Two mothers in their thirties with two children each could lead drastically different lifestyles--even if they share other defining characteristics. Perhaps it is time for companies to start looking at their customers on an individual case-by-case scenario. If a company can find a way to keep their existing customers, some of the pressure of finding new ones will be alleviated. If customers are happy with a product or service, they are likely to share their experiences with other people. Essentially, a company's current customers can be the ones to find new customers.
The whole idea of flipping the marketing funnel sounds really good. Instead of getting customers to focus on the product or service, the flipped funnel is having the business focus on the customers.
Jaffe brought up a lot of valid points and examples. "Flip the Funnel" was well written and researched. It would be well suited for high school and college students, as well as any company looking to make a change in their marketing department. Jaffe uses the basic set-up of, where we are now, where we should be, and then what happens after that. The main takeaway is for companies to focus on their existing customers and then to let them attract new customers.
In a moment where we feel constantly disrespected by companies that we interact with, Joseph reminds us that marketing is all about commitment and true human connection. This book was able to impact me more as a consumer than as a marketing professional: Flip the Funnel it's a collective outburst of the customer service that we are all experiencing by companies that surround us. Joseph brings the great paradox of companies and marketers: how companies that carefully build and protect its brand can treat customers in such an apathy way? Companies that spent millions and millions in advertising, but ruins every effort on a single call answered by an unprepared staff. These moments are called by the service industry as "moments of truth", but how seriously brands are taking care of these moments?
To turn this game, Joseph suggests that we should flip the funnel; companies must understand that making a sale is not the end of the process, but the beginning of a relationship between the brand and its customers. This is definitely the most valuable learning from this book and would probably require major changes from companies to achieve this transformation. To flip the funnel the book mentions different rules and important key words such as ADIA: Acknowledgement, Dialogue, Incentivization, and Activation. But, instead of memorizing all these words, simply have in mind that you need to leverage your customer experience. And if your company has not started to think about that, Joseph shows that in a world where everything is connect and interconnect, customer experience is not anymore a matter of choice, no matter the industry.
Flip the funnel has a great balance between tradition and forward thinking. It brings back the importance of doing business in a more old-fashioned way, but also how marketers should embrace technology as a transformative game-changer on customer service. Technology is not made to eliminate human connections, on the contrary is to enhance our connections with people and brands. The balance between old and new is expanded to the channel discussion. I felt relieved that the book is not only about social media. In other words, he puts social media as an important piece of puzzle to a high quality customer experience, but not as the only solution.
The book also clarifies some concepts that are being used in a wrong way by marketers such as retention, personalization and customer loyalty. It's interesting how much we've already heard from these concepts, but how few brands really know how to do it. The cases to support Joseph's thoughts are mostly already known by marketers, but still the author brings a fresh perspective about why we should continue to pay attention to brands like Ritz-Carlton, IBM and Jet Blue.
Joseph doesn't seem very worried in eternize its book as a fundamental marketing book, but instead, more concerned about provoking and challenging the way that most brands relate with its customers today. So, don't expect that this book will become your marketing bible, but will definitely make you rethink the current way you are building your brand.