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Flipping the Funnel

In Trends on May 24, 2010 at 2:36 am

Joseph Jaffe has written a nifty book on customer retention and marketing. It’s called Flip the Funnel but he doesn’t mean that in the way Seth Godin means it. In a nutshell, Jaffe is saying companies can grow revenue “whilst” (he’s from South Africa) decreasing their marketing budgets if they concentrate more on customer service and less on marketing. According to Jaffe, customer retention should replace customer acquisition.

As evidence that this is a worthwhile course of action, Jaffe offers some pretty eye-catching stats. For instance, for buyers of Diet Coke, seven percent of the market makes 80 percent of the purchases. How much does Coke pour into advertising campaigns designed to acquire new customers instead of encouraging loyalty and referrals from the customers they have?

This got me thinking of two things that companies could do better.

  1. What if ad agencies started recommending smaller ad budgets and larger budgets for customer service and customer loyalty programs? That’s radical. It’s the Madison Avenue equivalent of the Macy’s Santa Claus sending shoppers to Gimbels.
  2. Name the last time you got prompt and helpful service from a customer support hotline. I’m betting your answer is somewhere between “the Eisenhower Administration” and “never.” What if companies really poured resources into customer service? What if I made a personal connection with the tech support guy, got his cell number and email address, and had some level of confidence that he was personally working on my problem rather than reading me a script?

Jaffe emphasizes the role and usefulness of social media in this process, laying out three steps – content, conversation and commendations.

But the crux of his message is something we at REACH have been saying for a while: we’re not finished with a project when we deliver. We’re not finished when we get paid. We’re finished when we get positive feedback and/or a referral from that client. If we haven’t gotten that, we probably haven’t finished the job. And we definitely aren’t flipping the funnel.

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