This is a short reflection paper on the book ‘Flip the Funnel – How to Use Existing Customers to Gain New Ones’ by Joseph Jaffe, submitted for MBA 7384 – Business to Business Marketing, at the University of New Brunswick, Saint John. It is not intended to be a recap of the entire book, or even a recap of all of the concepts, but rather my thoughts on what I felt to be some of the more interesting aspects.
The Funnel – AIDA vs. ADIA
Marketing is ubiquitous. It’s all around us. We’ve all heard the statistics, at least anecdotally, about how many message we’re all exposed to in the run of a day, or a week, or a lifetime. It’s ridiculous. But alas, this is the process. This is what marketers do. They market. They break their necks to get our attention; to make us “Aware”. There it is; the wide end of the ‘traditional’ marketing funnel. As Jaffe, outlines for us early on in the book, the traditional marketing funnel is based on this acronym:
It’s about getting our attention; getting us into the funnel. From there they really turn on the charm and try to work us through the other steps, squeezing us into the narrow end of the funnel in hopes to get us to the desired end state: the sale!
This is how it is and how it may always be; but not if Jaffe has anything to do with it. In ‘Flip the Funnel’, he makes a very compelling argument for how the marketers of the world have been doing it wrong all this time and that instead of ‘AIDA’, the process should be ‘ADIA’, which stands for:
While the changes to the acronym look subtle, the approach is anything but. Jaffe spends two hundred plus pages making his argument for how, rather than spending our organization’s resources building ‘Awareness’ to a group of potential customers, what we should be doing is taking care of the customers that we have – and leveraging these relationships as an asset to build our businesses.
I really liked this book. I tend to enjoy books, authors, articles – people for that matter – that challenge conventional wisdom. In addition to the topic itself, I also enjoyed his informal, free-wheeling ‘write the way I think’ kind of style.
When reading the book, I tended to interpret his ideas, concepts and examples from two different perspectives. Firstly, I’m a consumer. Like everyone else, I buy stuff so I can relate to much of the content from that perspective. Secondly, I work for an IT consulting organization so I also tended to think about how the content applied to how my organization markets its services. Have we been doing it wrong too? And how can I take what he’s putting forward – essentially flipping convention marketing wisdom its head – and apply it to help my organization (ideally without getting thrown out the door for sounding certifiably insane!)
Retention over Acquisition
Jaffe’s argument around focusing on retention over acquisition, or even retention as a tool for acquisition, is an interesting one. The first thing that came to my mind when reading it was, ‘Well, you’re going to need to get some customers first’, since by definition, before you can retain something, you need to have acquired it first. With this in mind, organizations will need to figure out for themselves at which point, and to what degree, they execute this as a strategy.
Once you have arrived at a certain point however, switching the focus from acquisition to retention may make sense. At one point in the book, he put forward an interesting idea related to, what if as an organization you put the word out that you were going to put a ‘freeze’ on taking on any new customers. Now this is a radical idea, but he certainly got my attention!
When reading this I immediately thought of my experiences as a consumer of cable/phone/internet services. It seems to be almost every other week I see an advertisement in some form or another from my current provider offering incentives for NEW customers. My first thought is always (and you can probably guess) – what about me? Do I not qualify for the same – or dare I suggest it – a better discount for my years of loyal service? Something about this commonly used tactic doesn’t seem right to me. So, back to the point of implementing a freeze on new customers to better focus on existing customers – I think this would be a great idea.
Jaffe also spends considerable time in the book making the argument for how your retention strategy can effectively be your acquisition strategy; and it’s not that complicated. How many times have you felt, essentially kicked to the curb, immediately after a transaction has taken place? Far too many times, that’s how many. But, again – going back to the opening of this paper – this is how the marketing process typically works; once the sale has been made, you’ve been ‘converted’ and its onto making the next sale. Now, this isn’t always the case, some companies do it better and Jaffe provides some examples of who and how. He notes how shoe ‘e-tailor’ Zappos has had great success with a ‘Flip the Funnel’ strategy, with such tactics as a flexible return policy – again, not rocket science – just taking care of the customers after the sale. Other tactics that Jaffe notes that can be used to include things like simple ‘acknowledgements’ (the ‘A’ in ADIA) like a thank you card or a progress report (e.g. Amazon – ‘Your order has shipped’) to let you know that even after the sale, the organization you’ve just done business with still cares about you.
Jaffe argues that engaging in these types of activities make smart business sense, since they result in things like repeat purchases – and why wouldn’t you want your customers to be customers again and again? As we all know that it costs more to acquire a new customer than to retain an existing one, this only makes economic sense. Further to this, every happy customer you have is one more person who helps you with your advertising efforts, as word of mouth advertising and referrals have and continue to be powerful tools.
Happy Employees = Happy Customers
As I noted earlier, I’m a consumer (being marketed to) and I’m an employee (that ‘markets’ – if you will). The chapter titled, ‘How Employees Help Flip the Funnel’ was one that I particularly enjoyed. I found the section that referenced the Alexander Kjerulf blog post titled, “Top 5 Reasons Why ‘the Customer Is Always Right’ Is Wrong” to be particularly interesting. [Editorial note for blog readers – check out my thoughts on this post here.]
In this section Jaffe paraphrased the original blog post while adding his own spin on some of the things that organizations do in an effort to retain customers – customers that in some cases take a disproportionate amount of the organization’s time and resources and may not be worth the return on investment – at the peril of their employees.
The original blog post provided a comical example of a CEO that was tasked with dealing with a difficult customer with a bad reputation for never being satisfied with his company’s services, going through great lengths to make the service staff aware of her ‘issues’. Understanding the strain being put on his staff – and the negative implications that they could have in their ability to service other customers – he bluntly, yet politely ‘fired the customer’. Interesting approach!
Let’s get Social
The blog post noted above with the CEO firing the customer was originally posted in July of 2006. This was just around the time when Twitter was coming into existence. I make note of these two, seemingly unrelated items, only to point out that had this happened a few months later, this may have been a riskier move. It’s not that social media wasn’t in play in 2006, because it was. Facebook had launched a couple of years prior, however; at this point in time people were still mostly sharing pictures of their cats and brands were still in the very initial stages of figuring out if they needed to care about this whole social media thing. Things are different now (though many would argue that there is still a lot of cat picture share going on AND brands are still figuring out social media). This leads us into the next topic of the book that I found to be quite interesting: social media.
You can close your eyes and pretend it doesn’t exist or you can get on board. As Jaffe discusses, and makes you painfully aware through some great “good examples” (e.g. Obama’s presidential campaign) as well as some great “bad examples” (e.g. Motrin’s Babywearing debacle), social media is no longer simply an optional component of your marketing strategy. In fact, it goes further than marketing – or at least it should – social media can be a customer service tool and even a revenue generator. Since the advent of Twitter, the communication between companies and consumers is 2-way; it’s a dialogue (the ‘D’ from Jaffe’s revised marketing funnel acronym). It opens – and significantly speeds up – the lines of the communications between companies and customers. It also provides the customer with a captive audience to talk about your brand. If you do it right, you can leverage this channel as opposed to fearing it (which might be your first inclination). It won’t always be a happy story. Odds are you will take your lumps. If you don’t get it right, your customers will let you – and their legions of followers (and their follower’s followers and on and on) know about it. The key is to be in the game and listening.
Similarly, being on top of social media allows you to also provide your happy customers with an equal opportunity to spread the word, as Jaffe discussed in various areas of the book including the “Transforming Mouths into Megaphones” chapter.
Technology as a Game Changer
Similar to the social media phenomenon, technology can be an asset or a liability; it just depends on your view point as well as how you execute your strategy based on how you’ve opted to categorize it. In fact, just having a strategy is a good start. Jaffe goes to the commonly used ATM example for how technology has made our lives easier; by making a service that was once only available during “banker’s hours”, available 24/7. The advent of technology in this example has allowed banks to automate a once manual, human-performed service, to add value for their customers. The automation of processes is one way that technology can be used, but it shouldn’t be the only way. Organizations that ‘get it’ are the ones that use technology more intelligently, figuring out to what degree technology should be used since just because you can do something, doesn’t mean you necessarily should. Organizations need to ensure that they’re taking a holistic view of their delivery and customer service strategies – a complete ‘customer experience’ approach – and understand that while an automated process may save you money in the short term, in the longer term it may not be the best approach.
At one point during the technology discussion, Jaffe takes the readers back to elementary school math class by using an analogy with fractions where he uses numerators and denominators as factors for the degree to which organizations choose to deploy technology in their businesses. He makes the point that smart companies think of technology not simply as a cost centre, but a way to ‘change the game’ and provides some good examples of companies that are doing just that. He notes how Apple, a company that does both technology and marketing very well, put real people in their ‘Genius Bars’ at their Apple Stores and this is a strategy that is really working for them. He also notes IBM, and how they get it right by providing a multitude of ways for their customers to get in touch with them. When reading these sections it struck me as interesting that how something so seemingly simple ends up being considered as something so innovative.
‘Flip the Funnel’ was an interesting read and a welcomed change from another MBA text book. It made me think and entertained me in the process. There are many good points that I will consider and recommend for use in my current organization and further into my career.
While I think it is unlikely that too many organizations will abandon many of the traditional, tried and true, marketing strategies of old, there are many concepts in this book that are hard to argue with, including but not limited to the ones covered in this paper that included ‘retention over acquisition’, a focus on employees, embracing social media and understanding the right mix and use of technology.
Flip the Funnel, by Joseph Jaffe