007 Knows Relationships

In the movie ” Finding Forrester,” Sean Connery councils teenager Rob Brown on how to win the affection of a girl at school (say this out loud with a Scottish accent for the full effect):

“The key to a woman’s heart is an unexpected gift at an unexpected time.”

Brown follows the suggestion, gets her a gift, and sure enough, the girl is both surprised and thrilled.

Although Connery’s advice was intended for romantic purposes, the story brought to mind two separate, but related programs I was involved in while working with an Internet service provider a few years back.

Program #1: We launched a “Refer a Friend” program, giving our existing customers one free month of service for each new customer brought on. Given that our service was priced at $40 a month, this was a significant benefit to anyone who succeeded in passing the word along, and we had many customers who actively proselytized on our behalf.

It was a terrific arrangement for us as well, since the $40 price tag was roughly one third of what we were spending through our other marketing channels.

Program #2: As part of this same Refer a Friend program, we decided that we wanted to reward our “frequent referrers” above and beyond the free month, and came up with a simple idea. We ran a list of any customer who had brought us two or more friends in the last year (there were about 500 of these people), and sent each of them a thank you note and a coffee mug with our company logo on it.

So, here’s my question for you (careful, this is a trick): Which program do you think generated more enthusiasm from our customers? Program #1, which gave people $40 of value and allowed them to amass a theoretically unlimited number of free months of service, or Program #2, which gave people a $2 coffee mug?

Answer: You guessed it; it was #2, hands down. We didn’t receive any emails thanking us for having a Refer a Friend program (although many customers took advantage of it), and yet we received many emails from among the 500 people who got a free coffee mug (including one man who sought me out personally to tell me that this was, “the nicest thing any company had ever done for him”).

What’s going on here? Why are people so happy about a coffee mug, and so unimpressed with a free month of service? Once again I direct you to Sean Connery’s observation at the beginning of this column. To truly thrill somebody, you need to give them something they are not expecting, at a time they are not expecting it.

The coffee mug satisfied both of these criteria; the free month of service satisfied neither.

Don’t get me wrong. Loyalty programs, frequent buyer programs, referral programs and the like are great tools. They influence behavior and if you can construct an arrangement that works to the advantage of both parties, they are a terrific way to grow a business. But, they have nothing to do with relationship building — they are financial arrangements. Which means that they are effective tools for as long as they are in place, or until a competitor comes along with a better offer.

Genuine actions which thank customers for their business on the other hand — not because it’s the holidays and not because they just had their 10th car wash — have a much larger and longer term impact, and serve to create an emotional connection that is far stronger than any purely financial arrangement can ever be. As a result, these actions reduce turnover, increase forgiveness for the occasional error, and lead to positive word of mouth. . . all of which increase profitability for your business.

Bottom Line: Take a look at which subsets of your customers deserve to be thanked and take action to surprise them today. And while you’re at it, pick up an unexpected gift for your significant other on the way home tonight (you can thank me later).

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