The $20 Brand Bond

Amazon LogoLet’s talk about lifetime value of a customer for a few seconds.  I use the term “a few seconds” purposefully.

Recently I bought one of those discount vouchers for a neighborhood deli, where you pay something like half of face value and then cash in full value when you’re at the restaurant.  This one wasn’t from Groupon or Living Social, but from Amazon Local.  When I went to cash it in, the deli was out of business.  Tough times always for restaurant retail.  It happens.  Went to another place for lunch.  Oh well.

I got home that night, went to the customer service web page for Amazon Local, found the template under Contact Us, and submitted a one-sentence email notifying them of the event.  How long did the response take?  Less than a minute.  Full credit.

Yep, Amazon Local “bought” this voluntary endorsement for a whole twenty bucks.  Plus my ongoing loyalty.  My lifetime value to Amazon the Brand just increased a good deal more than twenty bucks, perhaps a hundred times that, maybe more.  Why?  Well, first because they respected me and my time, but more so because they laid the pipe to assure me that if something bigger ever needed to be addressed, I could count on them.

What did they do right internally to cause this function to be enacted externally?  For one, they fully empowered their staff, someone in a call center likely on the other side of the world.  There is no way in that brief turnaround their staff person had to ask anyone for permission to do anything.  They saw an issue, they jumped on it, case closed.

We look for WOW THE CUSTOMER moments in business all the time.  We spend hundreds of millions of dollars on advertising to get someone to sample a new product or service, so that somehow a WOW THE CUSTOMER moment can occur.  This one cost an entire twenty-dollar bill.

Compare this experience to another I wrote about earlier this year, where try as I might, I could not get one of the largest retailers in the world to help me locate a $5 replacement part for a thousand-dollar appliance I had purchased from them.  That retailer competes with Amazon, probably does not know it, and will never get another dollar from me.  If you have a moment, go read the transcript I shared from that interaction.  Coincidentally, I happen to have shared that post with a rising star at Amazon back when it happened who was aghast when he read it.  He had no idea of the contrast to come.

This is not meant to be a lionizing of Amazon.  Full disclosure, they were a minority investor in my previous company and proved to be a formidable competitor, daunting in many respects, not the least of which was their near rabid obsession with precision, time to market, and transaction perfection.  They had vast resources to call on that were not available to me, but they used them wisely and never skimped when it came to the customer experience.  That is a big part of how they got to be best in class, and consistently one of the top performers in the Internet Retailer Top 500.

Germane to Amazon’s perfection is a mandate of setting a customer service standard that is so extraordinary and so rare it can seem financially irresponsible to emulate — so much of net margin goes right back into the expense line to serve the customer.  Market analysts often shiver when they report on Amazon, wondering how their eye-popping trading multiples can last, with so much volume but so little relative profit.  Amazon seems to pay little mind to these analysts, instead worrying instead about customers.  That leaves them no choice but to focus on lifetime value, calculating it in complex equations with net present value back to the reinvested capital that most others would probably harvest.

How tempting it is to consume the fruit of that harvest, but harvest has to come each year, and that is why we focus on brands.  Here I lionize the customer service commitment as an essential and grounding component of the brand promise.  It is the shortest business case-study in the world, yet almost every company you encounter gets it wrong.

A service culture in the information economy puts the CEO at the bottom of the hierarchy and the customer at the top.  The customer is the boss.  The people closest to the customer, individual contributors like those in customer service, are the ones who interact with customers.  They make or break your brand.  How much discretion and authority are they usually granted?  None.  How much should they have?  As much as you can pile on.  They own the customer relationship, so they own your future.

Go on, hire the highest paid consulting firms, retain power player ad agencies.  Hold multi-day off-sites for brainstorming retention strategies, give motivational speeches about reframing your mission and vision.

Or just be really, really, really appreciative of your customers.  Love your customers, every single one them, embrace them as strategic imperatives, bonds that build moats.

What’s the ROI on world-class handling of those who frequent your brand?  You tell me.

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4 thoughts on “The $20 Brand Bond

  1. I have seen the contrast in customer focus most vividly in airlines. During a recent delayed flight, personnel spent all of their energy apologizing for circumstances beyond their control, but did nothing to improve the situation. After a 6 hour delay of a 2 hour flight, I was ready to swing at the next airline rep who said “so sorry” and did nothing. These personnel allowed multiple flights to depart with empty seats rather than upgrade waiting customers. A month later, I received a letter from the CEO, explaining why the company was not liable for the delay. The one sentence announcing the bonus frequent flyer miles he sent me was buried in his CYA verbiage. Contrast that with airlines which empower their personnel to upgrade fliers, move them without penalty to available flights, or at a minimum supply complimentary food and drinks. Companies which do not trust their own personnel to make good, customer-focused decisions do not instill confidence in their customers.

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  2. Pingback: How to Lose a Customer for Life for Ten Bucks | CORPORATE INTELLIGENCE RADIO™

  3. Pingback: How to Lose a Customer for Life for Ten Bucks -

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