Company of One Page 11

  Derek Sivers, the former CEO of CDBaby, says that we should proudly exclude people, because we can’t please everyone. That way, when someone hears our message directed specifically at them and no one else, they’ll be drawn toward our message (and will pay attention). It’s like creating messaging for pistachio ice cream lovers while poking fun at boring vanilla.

  Tom Fishburne, from Chapter 1, says that there’s power in polarization. If we try to appeal to everyone, we won’t appeal to anyone in particular, muddying our message. Creating indifference or simply being another boring small company in a crowded marketplace just won’t serve you well as a company of one.

  The “poster child” for polarization is Marmite, the classic yeast food spread from the United Kingdom. Marmite’s tagline is “You either love it or hate it,” a message it’s been tapping successfully for twenty years.

  Guy Kawasaki, the well-known marketing specialist and venture capitalist, also thinks that we shouldn’t be afraid of polarization. Large companies search for the “Holy Grail” of products that appeal to every demographic, socioeconomic background, and geographical location, but this “one size fits all” approach rarely works and often leads to mediocrity (and vanilla ice cream). Instead, Kawasaki believes, we should create products that make specifically identified groups of people very happy and ignore everyone else. The worst-case scenario is inciting no passionate reactions from anyone — no one caring enough about a product to talk about it at all, either positively or negatively.

  The idea that we should be able to infinitely scale attention for what we create to everyone can quickly become our downfall — the same kind of downfall waiting for those startups that attempt to infinitely scale customers and staff much too quickly. Expanding too quickly and for too large an audience often spells doom.

  Being unique, different, and unusual can have a polarizing effect on your potential audience. But that isn’t always bad.

  Just Mayo, a product from the company Hampton Creek, is very polarizing, even though it’s “just” mayonnaise. It’s been getting a swath of media attention from lawsuits, SEC investigations, lobbying efforts, and even CEO death threats — making it even more popular to both fans and investors alike.

  Just Mayo is mayonnaise without eggs. Its egglessness was why big-food behemoth Unilever, makers of Hellmann’s Mayo, sued Hampton Creek, alleging false advertising because its product didn’t contain eggs, an ingredient “required” for mayonnaise according to the Food and Drug Administration legal definition. (The fact that there’s a government agency that defines legal ingredients for condiments is also baffling.) Unilever sued because it was losing a sizable market share to this much smaller and nimbler startup. There were also unsigned and fraudulent letters to major retailers that carried Just Mayo, alleging that the product contained salmonella and listeria; in response, Target pulled Just Mayo from its shelves. The FDA cleared the company and said that those claims were unsubstantiated. But the controversy didn’t end with lawsuits and letters: the American Egg Board and the U.S. Department of Agriculture began conspiring to hire journalists to denigrate Just Mayo and its CEO, Joshua Tetrick. This campaign climaxed with this statement from a now-public-record email exchange: “Can we pool our money to put a hit on him?”

  By being polarizing with its eggless mayonnaise, Hampton Creek disrupted the entire mayonnaise industry. The ensuing controversy and legal battle only made its brand more desirable to its audience. In the end, Unilever not only dropped the lawsuit but, in a huge about-face, launched its own certified vegan, eggless “mayo” a few years later.

  To be a polarizing company of one, you can look to three strategies. The first is placation: trying to change the minds of the so-called haters, those individuals who don’t like your product. General Mills did this in 2008 by creating low-carb and gluten-free cake mixes, amid rising concerns over obesity and gluten sensitivities. Within three years, the number of customers who vocally disliked their mixes had dropped significantly. The second strategy is prodding: by intentionally antagonizing haters, you may sway neutral customers into becoming supporters if they agree with your polarizing stance. Finally, the third strategy is amplification: singling out a characteristic and leaning heavily on it. Marmite, already polarizing in its “love it or hate it” stance, released Marmite XO, an extra-strength version of the flavor. The company invited thirty of its best customers (found through social media) to a tasting and set up a Facebook group for the event. The promotion gleaned over 50,000 visits to the company website and over 300,000 Facebook page views. Marmite XO sold out quickly after reaching shelves.

  WestJet, a highly successful Canadian airline, has taken direct aim at United Airlines’ troubles with overbooking, which were highlighted when a video of a United passenger being dragged off a flight went viral. WestJet’s latest marketing campaign is simply “We don’t overbook,” complete with the hashtag #OwnersCare. (WestJet brags that its passengers are all technically owners of the airline.) Memorable stories are often driven by a protagonist fighting against an antagonist, giving the audience someone to root for and to root against. After all, there’s no Star Wars without Darth Vader. The same can occur in business: since our brains are wired for relating to and remembering good stories and epic struggles, a company that isn’t telling a compelling story can devolve into boring and forgettable vanilla ice cream.

  As a small business or one that isn’t aiming to grow rapidly, you can use polarization to provide an avenue for reaching your potential audience — without massive advertising spends or paid user acquisition — by getting people talking. Think back to before Apple was a monolith in the tech industry, when it was a tiny company going up against the giant IBM. In a now-famous Apple television advertisement — an homage to George Orwell’s classic book 1984 — a hero battles against conformity and “Big Brother.” The ad was so controversial and different from all the other ads at the time that all the cable news outlets picked it up after it first aired and re-aired it for free as a news story. By being different, Apple ended up selling $3.5 million worth of its new Macintoshes just after the ad first ran.

  In my own business, the stance I take on business and even social issues puts some people off. For every email I send to my weekly newsletter, I get a handful of critical replies, ranging from the standard internet vitriol to comments such as “I don’t want to buy anything from you because you believe in [fill in the blank].” This is actually a good thing, as I don’t want to have customers who are so angry or who complain so readily; if they paid for one of my products, I’d have to offer them technical or customer support. Their opting out of what I have to say and never buying anything from me is a win-win. When I get an email along those lines, I always check to see if the person who wrote it has ever been a paying customer of mine; the answer is always no. The bottom line is that I’m happy that my audience, in effect, vets itself. That way I can focus more time and energy on my paying and vetted potential customers.

  These days consumers buy and make choices often based on alignment with their own values. By not focusing on infinite growth or assuming that more is better, a company of one can focus on making its products better align with the values of a smaller, more specific group of people, and then market directly to their needs and viewpoints. That way, if others outside that group hate what you do or what you stand for, it doesn’t matter — you’re not going after them as customers in the first place. Instead, you’re drawing your own niche market closer by showing them your understanding and sympathy for how they see the world.

  People can copy skills, expertise, and knowledge, which are all replicable with enough time and effort. What’s not replicable is who you truly are — your style, your personality, your sense of activism, and your unique way of finding creative solutions to complicated problems. So lean on that in your work. Sell your way of thinking as much as you would a commodity. Polarization can shorten a sales cycle because it forces customers into a quicker binary choice,
to decided yes or no. After all, it’s hard to make money from maybes.

  To build and maintain your company of one, the sooner you learn how to distinguish your company’s profile in a positive way, the sooner you will be able to find your precise audience and sustain your business. You need to be more aware of who you are and then strategically highlight the innate and unique aspects of your personality to ensure that your business keeps and holds the attention of your customers.

  BEGIN TO THINK ABOUT:

  ■ How you could infuse your own distinct and unique personality into your products and company image

  ■ Where you could lean on what makes your business or product quirky or different to garner attention in the market

  7

  The One Customer

  There are a handful of restaurants I eat at where the staff remember my name and what I typically order. (They don’t even need to bring me the menu.) The owner comes out at some point to chat a little, not to see if I want another drink or dessert, but just to catch up. Sometimes, when a new item is added to the menu, they’ll bring over a plate of it, for free, looking for feedback. If my order is ever wrong, which is rare, they either provide more food or take something off the bill — without me saying anything other than that the order wasn’t quite right.

  With service like that, I eat at these places very regularly. If friends are in town, that’s where we go. Sure, the food is great, but the fact that I’m treated well at these restaurants — like their most important customer — matters more in making me a regular and long-term patron.

  It’s a great feeling when an employee or business owner goes out of their way to be helpful. There’s something quite memorable about a personal touch, or a business taking ownership of a problem and going out of its way to fix it.

  This isn’t a chapter on simply being a good business to the people who pay you because it’s the right thing to do. There’s overwhelming evidence that treating customers well, as if they’re your one and only customer, drives value to your bottom line.

  In short, helping your customers succeed and providing amazing service are good for business. A recent Harris Interactive survey showed that nine out of ten Americans were willing to spend more with companies that exhibited great customer service. The same survey showed that 79 percent of people bailed on a transaction or did not buy what they intended to because of a poor customer service experience. A study done by the White House Office of Consumer Affairs found that loyal customers, on average, were worth up to ten times as much as their first purchase. There’s also the hidden cost of negative experiences — Ruby Newell-Legner, a twenty-five-year student of customer happiness, found that only 4 percent of customers actually voice their dissatisfaction to a business: a whopping 91 percent of dissatisfied customers simply don’t ever return. And with online reviews and social media, bad customer service tends to be talked about much more than praise for good customer service — the internet loves to turn into a mob against companies that don’t help or that wrong their customers.

  With these stats in mind, it’s puzzling that some growth-centric companies care more about new customer acquisition than retention or customer happiness. Just as Kate O’Neill found with her work for Magazines.com (Chapter 4), acquiring new customers costs far more than renewing customers (6 to 7 percent more, according to the White House study just cited). Making renewals is often a far more important metric to measure, but they won’t happen unless your customers are loyal enough to want to renew.

  The obsession of some companies with growth and acquisition — with chasing a supposedly ever-growing number of users — becomes something of a vanity metric to tout on their homepage or in investor slide decks. But the cost of rapid user acquisition is incredibly high — so much so that it usually results in less overall profit. Being a profit-focused company of one (fewer expenses increase revenue just as much as more profits do), you can forgo vapid user expansion at any price and concentrate instead on retaining, pleasing, and helping your customers. In the long run, this approach costs far less and aids your company far more.

  A company of one has one massive asset when it comes to customer service: it can be delivered in a way that doesn’t scale. A restaurant owner can remember my name and dinner order because she works the front of the house and has one location, with regular staff. Just like Charlie Bickford, who’s the CEO of Excalibur Screwbolts but still regularly answers the phone at his small office. Or Basecamp’s founders, who answer technical support requests. Relationships, when the company is smaller, can be built with regular and loyal customers, and those personal relationships can keep them loyal and happy.

  As companies of one, we are very much in the people-serving business. It’s critical that we listen to each of our customers and take full ownership in making sure they are pleased with our service level and then successful in their own lives. Customer service is a huge differentiating factor in why people choose the places where they want to spend their money. If you serve your customers well, they in turn become brand evangelists for your company: basically an unpaid sales force that reduces your need to hire more staff.

  CDBaby, a service that lets independent musicians sell their music on platforms for iTunes, has a policy that, from 7:00 AM to 10:00 PM, every customer support call will be picked up by a real person within two rings. They have no voice mail or routing systems, and the phone can be answered by anyone from the CEO to the people in the warehouse. (Everyone is trained to help customers.) CDBaby focuses on treating its customers like friends, and friends don’t route their personal phone number to an automated system that says, “Your call is important to us, please continue to hold.” Similarly, the folks at Basecamp try to answer every support request within fifteen minutes — regardless of the time of day or night.

  Good customer service isn’t about simply achieving the norms of courtesy. Being prompt, answering questions, and treating customers with respect shouldn’t be rewarded — such service should be expected. Where companies of one can thrive and stand out is in exceeding those expectations, through personal touches, building reciprocity, and treating customers like they’re very important (hint: they are).

  THE SECOND WAVE

  Customer service over the last few years has gone through a bit of a renaissance. In the past, supporting and servicing customers were thought of as a cost, and in business it makes sense to cut costs as much as possible in order to increase profits. In this old way of thinking, automations were heavily leaned upon, from complex phone trees (“press 8, then 4, then 6, then 234, then the pound key to speak with an agent”) to customer message boards and self-help automated services like online knowledge bases. The problem with this kind of approach was that, however much money it saved a company, it actually created unneeded barriers between the company and customers with a problem, forcing them to attempt to solve it themselves, often to their great frustration.

  Today’s second wave of customer service as practiced by some organizations — and it should be the customer service delivered by all companies of one — focuses on emotion and ease. A study from McKinsey showed that 70 percent of buying experiences are based more on how customers feel they are treated and less on the tangibles of a product. The feeling of being treated exceptionally well can only increase in the context of a second purchase or a subscription renewal, because the customer has already developed a feeling about how the first purchase went or how any support requests were handled.

  This second wave of customer service bets that providing a positive emotional experience for each customer will create more wins and higher profits. If you treat your customers like they’re your one and only customer, they’ll reciprocate that love for your brand by not only continuing to do business with you, but telling their own networks to do so as well. Instead of treating customer service like a cost or expense, you can view it as an investment in retention and acquisition, because you’re essentially building a customer sales force through your
support staff.

  If customer happiness is the goal of customer service, your support center can become the main source of referrals. Referrals are a powerful way to gain new customers — research done by SmallBizTrends found that a staggering 83 percent of new business comes from word-of-mouth referrals. The best way to get customers talking about your business to people they know is to make sure they’re happy with what you’re doing for them and how you’re providing help if they need it.

  You don’t get referrals by just meeting the standard expectations of customer service — people rarely find it worth mentioning to others that a company did just enough to help them but nothing more. You have to do much more than that to evangelize customers if you want them to talk about your company favorably. A great example is a now-infamous story from the tech world about a customer service call to RackSpace, an enterprise-level cloud hosting provider. The call center rep heard someone in the background of a support call mention that he was hungry and wonder about ordering something. She quietly put the customer on hold, ordered a pizza to be delivered to the address she had on file, and went back to assisting the customer with his problem. Twenty minutes later, still on the phone with the customer, she heard a knock in the background and told him to go answer the door, saying, “It’s your pizza.” The pleasant unexpected experience led to not only a very happy (and full) customer but also a story that would be shared thousands of times online. This is the kind of customer service that builds reciprocity: your customer gets something unexpected and then feels the need to help your business, not only by remaining loyal but also by telling others.