a gauge showing suspects, prospects, customers, and advocates, with the needle moving toward advocates

Join Thousands of CEOs Getting Free Daily Business Coaching Videos

Want practical tips, strategies and ideas that our clients use to scale their businesses?  We invite you to sign up for our free daily business coaching videos where you’ll get in-the-trenches insights that drive huge results.  Click here to sign up.

A few years ago, my good friend Nick moved into a home four houses from my family. When he moved in, he decided to have his water purification system tested to ensure it was properly maintained by the previous owner.

The first vendor noticed a little rust on the tank and informed Nick that the equipment was bad – and needed to be replaced. Along with a few other items, the total cost was $3,800.

Nick was shocked and disturbed. He called me for a recommendation for another vendor who could offer a second opinion.

Now comes a gentleman from Allied Clearwater.

As the contractor pulled into the driveway, he saw Nick trying to move a heavy object and offered to give him a hand… Before he gave Nick a quote for the job.

Now, why would this contractor offer to do something that he wasn’t getting paid for?

Because this guy understood that building a good relationship with a client was far more important than trying to milk them for every penny they have…

This gesture immediately positioned Allied Clearwater as someone who was different than everyone else…

And when the contractor checked out Nick’s system, he discovered most of the items that the other company wanted to replace still had another 3-5 years of life, and recommended that Nick wait to spend the money on the nonessential stuff.

The result?

Nick has become a customer advocate, and has recommended Allied Clearwater to at least 8 other people.

As marketers, we’re always seeking new leads and customers. We have salespeople. We pay for advertising. We ask for referrals…

Yet there’s nothing better than a situation where you’ve delivered such an exceptional experience, your customers take it upon themselves to bring you more business.

As I discussed with a client, the “secret formula” for earning repeat business, loyalty, referrals, and advocates for your company is…

Well…

…No secret at all.

It’s comes down to being an advocate for your consumer.

And you need to go further than simply knowing what your customer wants, then giving it to them…

By being an advocate for your consumer, you’re saying: their best interest is the most important thing in your business.

…Even if it means subordinating some of your own profit interests for the best interests of your client (as in the Allied Clearwater example).

And it also means that by choosing to advocate for your customer, you will not advocate for anyone else.

The biggest mistake is to pretend you’re an advocate for your customers… But when they run into a problem, you side with someone else.

For example: Ashley, my hair stylist, purchased a pair of sandals at the local shoe store, and within 10 days, the sole started peeling off the bottom of the shoe.

Knowing that this wasn’t normal, she went back to the shoe store and inquired about the problem. The company responded with: “that’s not our fault, you’ll have to contact the shoe company.”

Of course, Ashley understood it wasn’t their fault…

Because she just purchased the shoe from them, however, she fully expected that they would either offer her a replacement, or at a minimum, make an offer to contact the shoe company themselves, using their purchasing power as leverage to help their customer.

After 90 minutes of “spirited exchange,” the local company eventually decided to exchange the shoes for her – but the damage was done. Ashley will never go back to that store again, and takes no shame in letting her clients (like me) know how poorly she was treated.

If this is the way the local shoe company treats their customers, do you think this adds to the reasons why it’s struggling?

Absolutely.

A lawyer cannot represent both the defense and the prosecution at the same time – just as your company cannot represent the customer and somebody else.

This is why companies like Nordstrom continue to thrive – even when they’re more expensive than others.

Look, one day while I was getting in my vehicle, I swung my leg into the car and as luck would have it, ripped my pants. I tore that sucker wide open… giving my 8-year son dry-heaves in uncontrollable laughter.

I’d purchased these jeans a year prior from Nordstrom, and merely to satisfy my curiosity as a business-nut, I took my chances to see if there was anything they would offer me…

To be clear, I told them what happened and explained to them that it was entirely my fault. However, I wanted to know if it was possible there was a defect in their jeans.

Now, think about it for a second… If a customer came into your store (or called you on the phone) with the same complaint, how would you have handled it?

Would you tell them that it’s not your fault (it’s the jean company’s fault)?

Would you tell them that you don’t cover issues that are a result of customer negligence?

Would you tell them that, because the jeans were purchased over a year ago, they were no longer covered under your return policy?

What would your response be?

Nordstrom’s response was totally unexpected…

Not only did they offer to exchange the $200 pair of jeans for free – they also determined that the new pants were on sale. Because they were cheaper at the time of exchange (1 year later) than they were when I purchased them, they gave me a $50 gift card!

And they hemmed the pants for free!

Do you think that made me love Nordstrom even more?

YOU BET!

Even though I can purchase the same jeans 15 minutes down the road for less money, I’ll drive 45 minutes to buy them from Nordstrom for two reasons:

Reason #1: I know they’ve got my back.

Reason #2: It makes me feel good to support a company that makes me feel valued and appreciated.

Now, in order for you to create a customer advocate, you need to know:

You see, we often get so focused on acquiring customers that we forget that it costs up to 7 times more money to get a new customer than it does to retain an existing one.

Sure, taking back a $200 pair of jeans (admittedly damaged by the customer) a year after the sale isn’t good for the short-term profitability for the company… However, for a company that thrives on repeat business, it was a genius long-term move.

Need further proof?

Nielsen’s Global Trust in Advertising Report found that: “Recommendations from people I know” trounced every other level for trust.

(Source)

And it’s the reason companies like Amazon advocate for their customers.

In fact, according to an article in Forbes, Bezos periodically leaves one seat open at a conference table and informs all attendees that they should consider that seat occupied by their customer, “the most important person in the room.” (Source)

As Paul Graham says:

“You should take extraordinary measures not just to acquire users, but also to make them happy. Your first users should feel that signing up with you was one of the best choices they ever made. And you, in turn, should be racking your brains to think of new ways to delight them.” (Source)

Which is exactly what the Ritz Carlton does:

“IF a customer has been waiting for more than 20 minutes, THEN reset their internal clock with a complementary item from the appetizer menu or with a free drink.” (Source)

So, how much does this really pay off?

As Derek Carder from Zappos says:

“70-75% of purchases came from returning customers. They order about 2.5x more than single customers.” (Source)

And all it takes is being an advocate for your customers…

what now?

Continue reading for more resourceful information.