The Power of Reputation
The Wall Street Journal has reported that 70 percent or more of the value of a brand is now based on intangibles. Shareholder value that used to be calculated on brick and mortar is increasingly driven by customer count, market share, prospects for growth, and reputation.
Let's talk about your reputation. Where does it come from? How does it happen? Reputation doesn't come from monologue--telling people how great you are. It doesn't come from dialogue with other people--although that is certainly important for establishing relationships. Reputation comes from "multilogue." Multilogue refers to the conversations other people have in which you are the subject.
The key is not what people say TO you at the party, but what people say ABOUT you after you leave!
Your business reputation is driven by the experiences your customers have with you, and their enthusiasm for talking about those experiences. Whether you think about it deliberately or not, you are dependent on positive word-of mouth advertising for the profitable growth of your business in the next 12 months.
When you boil it all down, there are only three ways to grow your business profitably at the unit level:
- Increase the average spend amount.
- Increase the frequency of customer visits.
- Get yourself some new customers.
But the fastest way to grow your same-store sales is to do all three at the same time. You do that by creating a remarkable customer experience within the four walls of your business.
The customers you already have are the primary source of word-of-mouth advertising for you. However, even non-customers who have heard wonderful things about your business from a raving fan will advance your reputation with comments like, "I heard they (your business) is really _____." Fill in the blank: fast, friendly, knowledgeable, fair, tops in selection, the best deal in town. Most people are more likely to act on a personal recommendation like this than on a paid advertisement.
What does it take to earn raving fans who will spread the word about you like that? How do you create apostles who act like an unpaid public relations firm for your brand? Well, you have to do something remarkable--i.e., worth talking about. At the very least you must be noticeably different from the competition.
Especially when you are in the experience business, people will only talk about you if you deliver something remarkable. We are all so bombarded with experiences that we simply cannot pay equal attention to everything. So we remember only what stands out.
This tells me that every day we ought to be working on having something new to delight customers. New products for them to try. New services that create extra value for the customer and extra margin for you. New ways to make it fun, easy, and convenient to do business with you. New ways to stand out.
Example: Go into a Target store and you'll notice they've added a selection of home furnishings. Can't find what you're looking for? As you browse the aisles, you'll see they have positioned bright red wall phones that say Call for Assistance. Pick up the phone and call for help. Every time I've tested this, the associate is there in less than a minute. That is remarkable! It's also sure to improve customer assistance without increasing labor hours. Instead of employees standing in departments and waiting for customers to come in, employees go to the customer on demand. That's brilliant!
And don't forget the old ways to stand out--like always having what the customer wants in stock--especially what you advertise. Offering customers assistance with a smile and genuine helpfulness never goes out of style either. Even if your products are substantially the same as your competitors, you can create a remarkable experience based on how you treat customers; how you make them feel appreciated and valued.
That is unusual in the service industry. Usually, it's like the lyrics from that Brad Paisley country song:
You're just another tip
To the guy at the ice cream shop
You're just another dip
To create a buzz about your business, you can't deliver just a mundane experience. Or in the spirit of the season, let me remind you that your brand goes up for election every day. You must deliberately give your customers reasons to choose you, and reasons to talk about why you are the best choice.
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