While others write about the Top 10 Reasons to listen to customers more powerful examples are all around us. After all, if Zappos can generate $1B in word of mouth (WOM) revenue why do companies continue to ignore their customers? Satisfied customers are the best sales channels ever!
The Best Sales Channels:
- Generate Additional Business – If customers are willing to speak favorably about your company or its products, they’re likely to make additional purchases. This willingness to purchase more comes at no additional cost, the next benefit of WOM.
- Are Cost-Effective – We often think in terms of acquisition costs. Some businesses measure success with ratios of 3:2. If it costs $3 to acquire a customer who spends $2 they declare victory. This model only works with recurring revenue streams, when the customer lifetime value is considered.
- Reach New Customers – This is the true power of WOM advertising, and why Fred Reichheld ‘s The Ultimate Question has gained such momentum. Once a company has set a positive experience in motion with one customer that good reputation spreads and other customers seek out the company’s products and services.
If WOM still seems touchy-feely (and the $1B doesn’t convince you) then it’s worth considering that any B-School professor would tell you that leveraging fixed assets is a wise choice; it magnifies benefits across a larger number of consumers. The same applies to WOM advertising. Respecting customer’s needs and supporting customer goals is really just good business sense.
The pivot point is that by listening to customers you can continually spread your acquisition costs. Happy customers encourage others to buy whereas unhappy customers actually increase the barriers and impediments to sell.
With one billion reasons to listen to customers, where will you start?