“Customer service is part of the marketing budget”.

This quote is something I heard while taking a Zappo’s tour in Las Vegas.

A company that went from zero to over $1 billion in annual sales is a company to model. So I took the tour and read Tony Hsieh’s book, Delivering Happiness – A Path to Profits, Passion, And Purpose. Tony sold his company LinkExchange to Microsoft for $265 billion in 1999. Soon after, he joined Zappos as an advisor, investor, and eventually, CEO. Zappos appeared on Fortune magazine’s annual “Best Companies to Work For” list in 2009, and shortly thereafter, Zappos was acquired by Amazon for $1.2 billion.

Most articles you read here are about marketing and business growth strategies. Well, if you take the Zappo’s tour and read Tony Hsieh’s book, you will understand that making customer service expenses a part of the marketing budget is a marketing and business growth strategy.

Many people who take the tour will tell you about the crazy decorations, rainbow of colors, and the overall atmosphere. Although all of that is something to talk about, the big takeaway for me was the outstanding attitudes of the employees. They were all helpful, fun, entertaining, informative, and happy to be at work. Every employee looked everyone in the eye and said “hello” with a big smile even if they were just passing by or on a phone call. The employees on the phone only lip synced the hello because they had a customer on the line, but the intent was there as was the smile and eye contact. Everyone seemed genuinely happy to see us. Others in our tour group felt the same way.  

In the economic climate live in today you would think all business owners and managers and employees would make it a priority to make guests and customers feel welcome. A smile is FREE and yet it goes a looooooong way. A great attitude is also FREE and goes a long way.

Apply to work at Zappos and if after a short time, they determine someone is not a fit to work there, they will offer $2,000 to quit! Yes I said, to QUIT! If this makes you shudder at the thought, consider this…

How much does an employee with a negative infectious attitude cost a business over a period of time? A negative employee

can bring down morale and infect everyone around them. This gets passed on to the customer. If you sell high priced items it may be easier to accept that a $2,000 payout to get rid of an employee is a deal. If you have profit margins that equate to $3,000 per sale then a sale earned that otherwise would have been lost due to negative employee attitudes equals a $1,000 gain.

Question – But what if you sell lower-priced items?

Answer – Zappos is known primarily as a shoe company.

I am not suggesting that simply paying to get rid of employees who are not a fit is the only answer. That is not the entire story of Zappos, but it’s a rare example to study. Zappos also offers continuous training to employees. They have an in-house Life Coach who works with employees on their goals — not just their goals within the Zappos family and culture.

A happy employee is more likely to give the type of customer service that will keep your customer coming back.

If you are consistently throwing money at marketing/advertising without great customer service and happy employees in place, take the Zappos tour and consider offering additional training. This way, the Marketing Consulting you invest in will lead to more sales as happy employees build relationships with newly introduced leads and customers.

Joey’s Autos treats car buyers like family, according to many of their customers.

Their service at the point of sale and after the sale are top notch.  Everyone that works at Joey’s Autos is friendly, smiling, and willing to help find solutions for their customers’ needs. 

If a “secret shopper” were to visit Joey’s and go through the car buying process Joey’s would probably get high scores.

However, traditional “secret shoppers” start with a phone call or a visit to the place of business.  Research has shown most purchases, especially auto purchases, start with research and it can last 120 to 180 days. 

Regardless of the length of time your potential buyer researches products and services before buying, they most likely start with the internet.

Studies have shown 78 – 95% of consumers go to the internet before making a buying decision.

In the case of Joey’s auto, their “secret shopping” grade is high but what about the research phase that started long before a consumer was ready to call or visit the dealership? 

If you picture the marketing funnel you realize the “secret shopper” would be entering the funnel from the side or at a point not at the top.  The top of the funnel is where all the leads(in this case, ups) come in. 

If 1,400 people per month look for a car in their area, how many find Joey’s Auto? 

If their website or local listing appears on page 2 of Google then Joey’s will likely miss out on 92% of the market(the first page of Google is a must.)

The good news is Joey’s Auto is likely to be found by car buyers in their area because:

• We have them at the #1 position on the first page of Google.
• Their website exposure has increased by 358%
• Their high level online leads have increased by 700%

Sharing these numbers is not to brag…but to demonstrate that there was still a problem even with the results we were getting with our efforts.

We dedided to pretend to be a car buyer in the area of Joey’s Autos.

-We easily found their dealership because it was in the #1 spot.
-We searched through their inventory…no problem.
-We read great reviews from their previous customers.
-We watched testimonial videos from some of their customers.
-We felt like this was the place so we clicked on the “Location” page…uh oh.

The “Location” page did not work and it gave us an error message.

At this point a highly motivated buyer may locate the phone number or use some other method to figure out where Joey’s is located.  However, the buyer that was deciding between 2 dealers may not make the effort. 

Take a look at the math to see just how much profit can be lost in this example.

Some of these numbers are approximate and others are pulled out of thin air just for demonstration purposes.

Let’s say this problem existed for a week.

350 new people look for a used car in their area per week

175 of the 350 click on our clients website(studies have shown that 50% of all online visitors click on the 1st place website)

82 of the 175 are interested in buying a new car this month

26 of the 82 found a car they liked on our clients website

13 of the 26 would have purchased a car after going to the dealership because they have a 50% closing rate

7 of the 13 still buy because they loved the car so they took the time to call to get the location of the dealership

6 decided to go to a different website for various reasons

3 of the 6 thought it was fishy that a car dealership would not have their “location” on their website

2 of the 6 thought a business that can’t even take care of somethings as important as their “location” on their website, probably doesn’t take care of their cars either

The last 1 accidently hit the “X” button on his browser when the “location page” did not work then got distracted and found a different website and purchased elsewhere

That is 6 customers lost…BUT WAIT, THERE’S MORE.

This car dealer sells an average of 2 cars over the next 5 years to every customer that buys from them.

Now it is a loss of 12 car sales!

This dealer also earns 1 referral from every 3 customers that buys from them over a 5 year period.

That is  2 more lost sales!

20 sales that are not going to happen because the “location” page was not working for a week.

Multiply the average profit per sale times 20 cars…that is a lot of profits out the door.

Expand upon your secret shopper and start from the beginning…like a consumer.  Try to find yourself on Google then go to other areas to determine what you can be doing to increase the size of your marketing funnel so you can gather more leads. 

Determine if you should be on Facebook, Youtube, Twitter, Linkedin, and Google Plus.

We added our Marketing Analysis Audit and Plan to our services after discovering several problems with new clients websites, marketing, lack of exposure, customer comments, and more. 

We realized that even when we bring you 2,000 new visitors and potential buyers in a month, if the “Buy Now” or “Location” page is not working, your profits will not be as high as they should be even with great marketing. 

Test every aspect of your marketing, sales, and communications regularly to be sure you are not turning away profits including your entire marketing funnel.

Numbers and names were replaced in this case study to maintain privacy.  You can call it, based on a true story.