This is a continuation of my series on the ineffectiveness of advertising when used without other marketing multipliers. See the original post here: Why Advertising Alone is So Ineffective
We covered the first marketing multiplier here: Marketing Multiplier #1 – Branding
The Role of the Customer Experience In Marketing
What? The customer experience is a marketing multiplier? Designing a unique customer experience for your business falls under the marketing umbrella for two primary reasons: word of mouth, and customer loyalty.
Every business owner I have ever known (at least the sane ones) have wanted word of mouth. Unfortunately, the customer experience is also the most ignored marketing subject by small business owners.
Wait, it’s not that business owners don’t believe they need a good customer experience. No, intuitively, they know they do. It’s just that they don’t know where to start. It takes quite a bit of effort and usually an investment to get a magic customer experience. (I’ll cover designing the customer experience in a future post)
An Experience Worth Talking About
The first step to creating word of mouth is giving your customers an experience they have to talk about, positively. But people don’t talk about ordinary things, you have to be different.
In Made to Stick: Why Some Ideas Survive and Others Die, authors Chip and Dan Heath tell us that we need to tap the two essential emotions of surprise and interest to get people’s attention. And that’s what makes the customer experience such a challenge. But when done right, it’s a powerful marketing multiplier.
Can I Get Some Loyalty, Please?
Customer experience guru Shaun Smith says that customer satisfaction does not equal customer loyalty. As evidence, he presents a customer satisfaction scale and a loyalty index. Smith says that if you satisfy customers at a level of 4 on a 5 point scale, you will only get a 25% intent of loyalty from your customers!
However, if you satisfy customers at a level of 5 on that same scale, you get a 90% intent of loyalty from your customers. The lesson is that even giving great service will not get you customer loyalty. An outstanding experience is needed to earn that loyalty.
Back to the Formula
Now let’s go back to my unscientific formula of advertising effectiveness and plug in the customer experience factor. Remember the theory is that using advertising alone as a marketing tool is ineffective. Marketing multipliers are needed to eliminate wasteful advertising spending.
Caution: If you hate math, you will absolutely hate the formula. You may skip the rest of this post and leave with the customer experience lesson above.
Here’s the formula. I have assigned a multiplier value of 2 to customer experience, combined with branding’s value of 2, we now have a marketing multiplier effect of 4 in front of each value in the formula.
That still leaves us with 96% of our advertising investment being wasted. Don’t fret. In our next visit with marketing multipliers we’re going to add the cherry on top of our marketing sundae: Word of Mouth.
For small business marketing ideas and case studies, without the math, see our other blog: The Idea Spot