2011 september flip the funnel -...

SUCCESS.com SUCCESS BOOK SUMMARIES

SUCCESS PointsThis book will teach you how to:

• Focus on customers and employees to cut marketing costs and increase sales

• Use social media to your advantage

• Use outreach and incentives to make customers loyal advocates

• Respond to problems in a 24/7 world

John Wiley & Sons Inc. © 2010, Joseph Ja� e ISBN: 9780470487853 286 pages, $29.95

SEPTEMBER

20

11

Turning Things Around Apply today’s technology toward an old business strategy: excellent customer service.

QUICK OVERVIEW Joseph Ja� e believes that the traditional business funnel, with its emphasis on

attracting new customers through marketing, is outmoded. Rather, he says, businesses should emphasize keeping existing customers happy so they’ll bring in new ones. To do that, he says, companies need to return to the tradition of establishing relationships with their customers.

Ja� e is no Luddite. He believes, though, that companies often use the new technology badly and lose customers tired of battling Web sites and phone systems for access to actual humans who often aren’t much help, either. He lays out plenty of speci� cs on how to make the new technology work.

As Ja� e freely admits, his nonlinear writing style can put some readers o� . He’s somewhat like an improvising musician who sometimes wanders a bit far from the theme. Hang in there, though. He always � nds his way back, and it’s worth the wait.

APPLY AND ACHIEVE One of the more refreshing aspects of Flip the Funnel is Ja� e’s emphasis on treating

employees right to maximize their contribution. All too often, he says, companies don’t trust their employees and treat them as adversaries rather than as the internal customers they are. He cites the example of Costco, whose employee turnover rate is the lowest in retailing and � ve times lower than that of Wal-Mart, its primary competitor. Costco, he says, promotes from within and turns its workers into champions for their employer.

In too many cases, Ja� e says, employees aren’t given the training or the latitude to do their jobs well. They aren’t allowed to deviate from a script or to make mistakes. Instead, he says, an employee who makes a mistake should be rewarded for taking the initiative. Of course, repeating a mistake indicates a need to learn more about how things work. “Train,” he emphasizes. “Train. Train.”

Flip the Funnel How to Use Existing Customers to Gain New Ones by Joseph Jaffe

Flip the Funnel


For business owners and entrepreneurs who work with employees, team members or even virtual assistants, taking this advice to heart can improve both customer service and your productivity. Train the essentials, set the example of excellence, but then step back and allow your sta� member to accomplish their work without interference. You might discover that rewarding initiative leads to innovation—and loyalty.

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This book hypothesizes that there’s something inherently out of whack with the traditional marketing funnel and that there are better ways to optimize it. The marketing funnel produces customers—but then does

nothing with them. With so much e� ort expended to produce a priceless transaction, it is almost inconceivable that we all but abandon our intensity thereafter. Perhaps we’re locked into a cruel version of Groundhog Day, when we immediately are taken back to the beginning, only to have to repeat our entire marketing mating dance with (as history has shown us) barely any new lessons learned and diminishing success rates.

WHAT THE RECESSION TAUGHT US People drive, eat, and consume; they spend, shop, and buy.

Sure, there are times when they might do less of these things than they used to—such as business or personal travel—but for every door that closes, another opens. Case in point: videoconferencing, like Cisco’s Telepresence (to replace travel for meetings) or, in the consumer world, staycations or family road trips (instead of a regular family vacation). During constricted times like these, an obsessive focus on thinking smartly, creatively, shrewdly—even laterally—is required. This kind of thinking does not and cannot happen in the absence of risk. When Hyundai launched their simple promise along the lines of “Lose Your Job, Return the Car,” they took a risk that they’d be sitting on a heap of returned cars. But when last I checked, this hasn’t happened. That’s what happens when you trust your customers like you would want them to trust you in return.

Companies that maintain consistent rapport with their customers during tough times insulate themselves against inroads that come at the hands of undercutting and undermining competitors—as well as promote a renewed sense of loyalty.

What if we were able to essentially � ip the funnel and reverse-engineer future growth from a platform or foundation

of current growth? What if we could use the sparks of satisfaction to generate a raging furnace of preference, precedence, and insistence?

TIME TO SPURN THE CONCEPT OF CHURN

The entire process of managing churn is � awed at best and suicidal at worst. It is predicated on a simple formula: that people coming in need to counteract those going out. And as long as the former outweigh the latter, the cash register gives the illusion that all is well in commerceland.

Let me be clear: No level of churn is acceptable. Ever. Practically the entire business of marketing revolves around

consumer insights. We plow endless amounts of money into gaining a better comprehension of what makes them tick. But somewhere along the line, we kind of lost touch with our customers. At no time was this more prevalent than during the recession of 2009 and, in particular, during the Super Bowl, with the likes of Monster.com and Careerbuilder.com making light of “being stuck in a job you hate” while millions of Americans were busy losing their jobs and desperately trying to � gure out how to keep a roof over their families’ heads.

In the very same Super Bowl, one brand, Hyundai, stood out from the crowd by using the opportunity to announce their assurance program… where people who lost their jobs could return their cars.

TECHNOLOGY AND RELATIONSHIPS—A LOVE-HATE RELATIONSHIP

A common theme is the rise and role of technology, which has irrevocably changed the way we do business. It has proven to be the consummate method of delivering both unprecedented levels of e� ciency and e� ectiveness boosts to many businesses, industries and categories. Instead of embracing and investing in technology as a profoundly transformative game-changer, companies consider it as a way to lower costs.

Web sites have become dead ends of customer contact and continued conversation. Problems and concerns are rolled up into a bland and templatized FAQ (frequently asked questions) section. It’s damned near impossible to contact an actual human being on

Flip the Funnel


these sites, with their seemingly endless wild-goose-chase options that are all designed to get you back to the FAQ anyway.

A Howling Failure Customer-care lines or 800 numbers are not much better. A

cacophony of howlers dominate this beleaguered space—from horrible Muzak, to the banal “Your call is important to us and will be answered in the order it was received,” to the maze of “press 2 to continue in English” options. Instead of chasing our consumers on our terms with our preferred channels, why not give them a rich and diverse array of connection points or communication channels through which to engage, interact, seek, and connect?

Automation is not always the answer. Balance technology with a good old-fashioned analog or manual solution, namely, human beings. Scale is often the enemy of service. Figure out ways to keep things small and manageable. This doesn’t mean sacri� cing bigger-picture thinking, but rather rolling up and implementing what you’ve learned on a global scale.

TIME TO FLIP THE FUNNEL Acknowledging our customers a� rms their importance to us

and places both tangible (the purchase itself) and intangible (future business) value on them. It is the � rst step in a new continuum that anticipates future interactions between company and customer, both monetary and otherwise (insights).

Acknowledgment can take a few di� erent forms, and thanks to the explosion of contact points available to companies today, via a variety of ways. A company that recognizes a customer’s patronage conveys a sentiment that can touch even the coldest heart.

The band Coldplay expressed the ultimate thank you when it gave away an entire album to its customers without any strings attached. Good intentions aside, Chris Martin and company aren’t dummies. They captured e-mail addresses as part of the value exchange, which itself is part of the process of � ipping the funnel, namely, extending dialogue.

Some Response! The 24-hour autoresponder is perhaps the biggest single missed

opportunity to meaningfully connect with a customer, insofar as it is generally devoid of any personalization and standardized to a fault. Why not provide additional information to customers that they might � nd relevant, or helpful? For instance—if a customer

has just sent in a query ticket to GoDaddy due to problems with a domain, why not provide a list of freelance web developers and webmasters whom the organization has reselected to help with similar queries?

The follow-up contact is a� rmation that any promises or intentions were genuine and earnest.

Here are � ve things a company can do to activate dialogue with—as well as among—its customers:

1. Establish customer clubs, forums, communities, groups, or hubs… where people can connect with each other, ask questions, provide answers, and socialize.

2. Make the � rst move. Outreach proactively to your customers. 3. Implement a robust listening strategy.

A Singing Rebuke Jaffe’s book includes several anecdotes illustrating

amazingly inept corporate behavior. One of the best involves United Airlines and a Canadian band called Sons of Maxwell.

As the band members prepared to deplane in Chicago, a woman caught their attention by exclaiming, “They’re throwing guitars out there.” Guitarist Dave Carroll approached a flight attendant, who advised him to speak to the lead agent outside. The agent’s response? “But hon, that’s why we make you sign the waiver.”

After six months of futile efforts to get satisfaction from the airline for the damage to his $3,500 instrument, Carroll paid $1,200 to have it repaired. Then he wrote and recorded three songs about the experience, produced music videos of them and posted them on YouTube and other sites. Within three weeks, by July 17, 2009, the first video, United Breaks Guitars, had racked up more than 3 million views; by November of that year, that number had doubled. Carroll got a lot of publicity out of the dust-up.

When United eventually offered the musician $1,200 cash and $1,200 in vouchers, he told the airline to give the money to a charity instead. United chose the Thelonius Monk Jazz Institute.


4. Design a comprehensive and intense response strategy to provide timely and relevant information to ongoing conversations.

5. Find an optimal mix between technology and human resources designed to maximize your ability to participate e� ectively and e� ciently with customers and their communities.

I believe there’s going to be an awakening among consumer nation for a quid-pro-quo partnership, a mutual back-scratching e� ort where failure to reciprocate will be short-lived. When I recorded an episode of my video show on how much I loved Charmin toilet paper, I promptly received free toilet paper in the mail.

THE KEY IS CUSTOMER EXPERIENCE

Consumers today have more choice than ever before; the world is both their oyster and their marketplace, and it’s open for business around the clock. We, on the other hand, are not. For these reasons, we have to add value at every twist and turn of the consumer journey, utilizing a mixture of service (doing business better using existing techniques) and innovation (� nding new ways to do better business) in the process. By not taking care of our customers, employees, and even our culture, we run the risk of defections, mutiny, and even sabotage. Case in point: all of those massively complex and far-reaching frequent-purchase programs with the oodles of miles, points, and credits.

CUSTOMER SERVICE AS A STRATEGIC DRIVER

It seems that the very nature of customer service has been wholly transformed with technology at the core. While being able to call a personal Steinway customer-service agent is terri� c, wouldn’t it be better if an iPhone application helped you self-tune your piano?

Nationwide Insurance does just that with an app that leads consumers who need to document an accident through an interactive walk-through and step-by-step guide.

Service can actually become a source of revenue for companies—not just directly (i.e., new business from old customers) but also indirectly (i.e., new business from new customers).

I’ve already mentioned Apple’s introduction of Genius Bars. Another example is Net� ix, which has essentially built an entire business (model) on service.

Combining all physical or store encounters, live chat, and e-mail exchanges—and, most recently, social media or virtual conversations—in an evolved Voice of the Customer program is just the beginning. Incorporating this feedback into the very engine of the company—AND communicating progress back to the point of origin—is equally, if not more, important.

TRANSFORMING MOUTHS INTO MEGAPHONES

Many people claim that word of mouth is nothing new. While that may be so, what is entirely new is an unprecedented set of accelerants, magni� ers, and ampli� ers. These have propelled the speed at which content is spread, the number of people who are connected or a� ected, and the distances covered in the process to unimaginable levels, heights, and echelons. Instead of viewing it as a one-way street or an uncontrollable and unfriendly phenomenon resistant to brands, companies, and corporations, we could instead embrace it by speci� cally and overtly arming our customers with megaphones, ampli� ers, and platforms to spread the word.

The idea behind � ipping the funnel is that a company can grow its business and customer base by expressly concentrating on retention, customer experience, relationship building, and the networked e� ects of customer-originated word of mouth.

TO INCENT OR NOT TO INCENT: IS THAT THE QUESTION?

Encouraging customer contributions with a variety of incentives is often enough to motivate them to act, stay engaged, and remain active customers. These incentives can be one-o� or ad hoc, promotional by nature, or ever-present, consistent, and ongoing. Whereas incentives go a long way toward fostering goodwill—that is, are as much capable of building the brand as they are able to generate additional sales—it is occasionally advisable to literally

Web sites have become dead ends to customer contact and

continued conversation.

Book Titile


Flip the Funnel

compensate customers for their business. As an easy way to di� erentiate between the two, incentivization is indirect, and compensation is direct. They can also be one and the same; that is, one person’s incentive is another’s compensation (a simple thank-you is enough).

THE NEW CUSTOMER-ACTIVATION MODEL: CONTENT, CONVERSATION, COMMENDATIONS

Think of a web site like a hub or a train station; it can be a point of origin or a destination. Hubs need to be open, � uid, and infused with “sociability”—teeming with life and alive with conversation. They are decidedly nonlinear and diverse by nature, and they need to be loaded with content, information and features.

Deploying a robust content-hub strategy gives the brand an unlimited number of opportunities to seed the kind of content that carries a commensurate amount of buzz and in� uence. By creating a two-lane highway of content � ow—and rewarding and recognizing creators and their content—companies can activate customers’ engagement and explicitly amplify a very credible body of creativity, perspective, and knowledge.

And for every bit of content that is sourced, acquired, and curated, universal currency is bartered in return.

Whether implied or overt, endorsements are another powerful way to demonstrate an a� liation with a brand. With or without compensation, they carry huge weight in terms of their potential impact and in� uence. This all falls � at, however, when there is manipulation, coercion, opacity, or incomplete disclosure.

What ultimately protects the structure and longevity of a customer activation model is that this is really nothing more than a (highly evolved) loyalty program, with the inherent ability to very explicitly, tangibly, and publicly acknowledge the invaluable role customers play in furthering the brand’s health and the business’s growth. Miles or points can be traded for branded services or experiences, accessories, or upgrades and, in the case of an IP marketplace, status, social capital, or additional perks.

THE ECONOMIC BENEFITS OF CUSTOMER EXPERIENCE

From a sociological point of view, there’s a profound cultural shift taking place, wherein people are more apt and open to share than ever before. It’s more than just having an expanded set of tools (megaphone); rather, it’s about a renewed sense of connectedness and a genuine desire to share knowledge with and help others.

We must determine both the exact cost and the return on that cost to acquire a new customer using traditional acquisition channels versus acquiring a new customer via existing ones.

CULTURAL SELL-THROUGH AND ORGANIZATIONAL SIGN-OFF

Most companies seem to be stuck somewhere between strategic and tactical stages of change when it comes to adopting emerging, alternative, or lateral technology, methodology, or di� erent practices. Finding a common entry point is often the best level-setting technique to set up the systematic and standardized process needed in order to evolve and integrate across the board. This place, more often than not, is strategic planning.

The traditional marketing or sales funnels are 100 percent focused on driving the purchase (“action”) or closing the deal. Once that happens, there’s a gaping void that represents an unmet need. Customers are either referred to an entirely di� erent department or, worse, abandoned or forgotten. Against this logic, there needs to be a single point of contact—marketing—that accompanies customers who continue their brand journey.

And now it’s to set our sights on the very foundation of consumer behavior itself: the marketing funnel, aka, A.I.D.A., Awareness, Interest, Desire, and Action. It’s widely held to be the simplest and most accurate way of describing the four states or behaviors that almost all consumers experience. It’s time to � ip the funnel and when you do, you’ll notice that your previous journey’s pinnacle is now the tip of the iceberg of your next one.

Introducing the new � ipped funnel, A.D.I.A.:• Acknowledgment• Dialogue• Incentivization• Activation

We want our customers to trust us… so why don’t we trust them

in return?

Book Titile


Flip the Funnel

© 2011 SUCCESS Media. All rights reserved. Materials may not be reproduced in whole or in part in any form without prior written permission. Published by SUCCESS Media, 200 Swisher Rd., Lake Dallas, TX 75065, USA. SUCCESS.com. Summarized by permission of John Wiley & Sons. Flip the Funnel by Joseph Jaffe. © by Joseph Jaffe.

ACTION STEPS Get more out of this SUCCESS Book Summary by applying what you’ve learned to your life and your business. Here are a few questions and thoughts to get you started.

1. Defi ne your customer service policy.

2. Are you a micro-manager, or do you allow/expect your team to work independently?

3. How could you incorporate autoresponders into your business model? How can you make them effective and benefi cial for your customers?

4. Do you spend more time acquiring new customers or servicing existing customers?

5. How can you encourage or incent people to provide endorsements for you or your business?

6. Have you allowed any customers to “fall through the cracks”? What can you do to make that right?

7. Develop a written plan for staying connected with customers.

About the AuthorJoseph Jaffe is president of Jaffe LLC, a consultancy

specializing in new and social media, customer

experience and marketing innovation. In 2006, he

founded the strategic consultancy Crayon, whose

clients included The Coca-Cola Company, Panasonic,

Kraft Foods and H&R Block. Jaffe ran Crayon until it

was acquired in 2010. He provides daily and weekly

commentary through “Jaffe Juice,” which is both a

blog and an award-winning audio podcast. In 2009, he

ventured into video when he launched “JaffeJuiceTV.”

Jaffe’s � rst book, Life After the 30-Second

Spot, published in 2005, focused on the evolution

of advertising. His second, Join the Conversation,

published in 2007, dealt with the new phenomenon of

“conversational marketing,” which involves developing

a company culture centered on response and

responsiveness. His fourth book is to be published in the

� rst half of 2012.

Jaffe is in demand as a speaker and writer and is a

senior fellow at the Center for the Digital Future at the

University of Southern California Annenberg School and

the Society of New Communications Research.

Recommended Reading

If you enjoyed the summary of Flip the Funnel, check out:

Join the Conversation by Joseph Jaffe

Flipping the Funnel by Seth Godin

The Referral Engine by John Jantsch

2011 september flip the funnel -...

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