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Your "Off Balance Sheet" Marketing Force

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Can You Get Your Customers to Recommend You to Their Friends? Can You Get Your Customers to Recommend You to Their Friends?

Accountants are extremely adept at measuring your assets and liabilities and calculating profits. But one major asset is ‘off the books’ and can be your most valuable marketing asset: the number of customers who are so delighted with your products and services that they actively recommend you to their friends and colleagues.

Through relatively simple survey techniques, some companies (eg Amazon, USAA, Costco) know that more than 70% of their customers actively recommend the company’s products and services to their friends.  In some cases (eg eBay, Zappos, Apple) happy customers actually sit down and help their friends learn how to use the company's products or services.

Companies also carry an off balance sheet liability of unhappy customers who actively discourage people from using the company’s products and services through word of mouth, on line reviews, blogs or other social media. Today’s unhappy customer can tell thousands of people.

The percentage of promoters minus percentage of detractors is called a “Net Promoter Score” pioneered by Bain & Co and is a metric being used by a growing group of customer oriented companies. 

But who is responsible for this managing critical metric and the off balance sheet asset it measures?  Marketing? Sales? Customer service?  The answer is partly all of these, but the question has led to the rise of the Customer Experience Officer.

Companies are beginning to hire a Customer Experience Officer, in some cases as a direct report to the CEO, who looks at the entire company from a customer point of view and advocates changes across all functions to improve customer experience and turn them into promoters, a powerful off balance sheet marketing force.

This cross functional task is not easy.  One hospital management company engaged a Customer Experience Officer to help retain health insurance enrollees.  The “CXO” found it hard to make progress with colleagues who were already busy doing their best at marketing, sales, risk management and providing health care.  The breakthrough was when the CXO showed their colleagues photographs of the entrances of the medical facilities that had become cluttered and run down, negatively impacting first and last impressions of any visitor.   Colleagues became convinced of the value of looking at the Company from the customer’s perspective and took action; Net Promoter Scores improved and opt-out rates declined.
 
The top talent in customer experience comes out of eCommerce, Telecommunications, Financial Services, Travel and Hospitality where thin margins and brutal competition make delivering world class customer experience an imperative.  But delivering on the promise of a strong customer experience can be a competitive advantage in almost any industry.   Managing and supporting your ‘off balance sheet marketing force’ of happy customers can be an engine for growth and a Customer Experience Officer can be a critical factor. 

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Ted Pryor
Ted Pryor
Contributor
Ted Pryor is a Managing Director with Greenwich Harbor Partners and focuses on senior level executive recruiting in Media, Technology and Business Services including general management, sales, marketing and customer service. He has over ten years of experience as a senior executive at GE Capital and over 20 years of experience in corporate finance. Prior to executive recruiting, he served as CFO and CEO of a venture backed start-up company.

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