How Mistakes Can Actually Build Your Reputation: A Chat with Author Jay Baer on his latest book “Hug Your Haters”

Posted by Elise Mitchell on August 25, 2016

It’s rare that I plan a vacation or dinner at a new restaurant without first checking in with the crowd.  Thanks to Yelp and Trip Advisor, I nearly always get a pretty good feel for what the rooms are like at the hotel I’m considering or the menu at the new tapas place in town. 

More and more, customers wield great influence in the marketplace.  The power is in the people, or at least that’s what my good friend Jay Baer thinks.  According to Nielsen research, 91% of Americans trust recommendations from friends and family members while only 47% of Americans trust advertising from brands. My own behavior underscores this statistic. 

The power dynamic is constantly shifting between brands and customers, and it’s something we think about on behalf of our clients every day.  It’s been top of mind for Jay, too, so much so that his latest book focuses on it. “Hug Your Haters” takes an in-depth look at how brands can build relationships with customers not just on the things they do right every day, but more importantly what they do when things go wrong.  That’s when complaints or compliments can make such a huge impact on a brand’s reputation.

I had a chance to read Jay’s latest book earlier this summer, and I found plenty of take-aways that align with how we counsel clients on the importance of customer-centric thinking. I caught up with Jay in between his many speaking engagements to ask him a few questions about his book. 

Question: Jay, you get right to the heart of the relationship between brands and consumers in “Hug Your Haters.”  How can brands make the most of the relationships they have with consumers – in good times and bad?

The key to many modern communications successes is to turn customers into volunteer marketers. Whether it’s through user-generated content, influencer marketing or through remarkable customer service that makes word-of-mouth involuntary, the most effective and credible buying signals are those that are crafted and delivered by real people.  That’s why platforms like Yelp and Trip Advisor are so useful to you.

Smarter brands are activating their customers as marketers through customer service that exceeds expectations. When you are faster than customers expect, more responsive than they expect, more lenient than they expect, or any combination of those, it creates chatter about the brand. Done well, your customers can become the core of your marketing. Alas, most companies fall short of having the cultural and operational alignment to make that work for them. 

Question: No company is perfect – mistakes are going to happen.  But does every complaint need to be taken seriously?  Talk about the benefits of owning all your mistakes.

There are two enormous benefits from the “Hug Your Haters” approach, which asks businesses to answer every complaint, in every channel, every time.

  • First, doing so makes you money. When their complaint is answered, 70% of unhappy customers stay as customers and do not defect. And when customer complaints are answered (even if the problem is not solved) customer advocacy increases by as much as 35%. And research dating back decades and re-proven again and again shows that even a 5% increase in customer retention rate increases profits 25-85% because of the geometrics efficiencies gained when you’re not churning your customer base over and over. 
  • The second benefit is that hugging your haters makes you a smarter business. Dealing with unhappy customers can be frustrating, and is not inexpensive. However, it is critical to recognize that only 5% of unhappy customers ever complain in a form or fashion that the business can find it. These complainers are your most important customers because they are the canary in the coal mine. Their grievances are representative of a much larger group of dissatisfied customers who had the same issue, but didn’t voice it. These haters give you powerful insights into your company and the raw material necessary to fix the operational shortcomings of your business. There are many case studies and examples in the book of this dynamic at work. You can’t fix what you can’t find. Haters are not your problem, ignoring them is. 

Question: The communications landscape is only becoming more fragmented and digitally-centric.  How should brands think about customer service in light of the growing number of new channels?

Most companies pay attention to customers in the channels that they prefer, such as phone and email, typically. But we have to change our mindset to being everywhere, including -- and perhaps especially -- in the places our customers prefer. This is only going to get more difficult as customers gravitate toward Facebook Messenger, WhatsApp, WeChat and other messaging apps to communicate with businesses. This is truly the era of customer-service disruption, which is why I wrote the first book about that subject. Today, customer service is often a spectator sport, and that makes it the new marketing. 

Conclusion:

Regardless of what business you’re in, it’s important to think about how you’re being reviewed by the crowd, whoever your crowd is.  Don’t be afraid to own your mistakes publicly – this is a fundamental of reputation management.  The best time to win real fans is when something goes wrong simply because so few companies do this.  Authentic apologies, declarations of empathy such as saying “I’m sorry,” and then DOING something about it can go a long way toward earning trust and a second chance.  Thanks for the fresh insights on this timeless truth, Jay.

 

Jay_Baer.jpegJay Baer, CSP is the world’s most retweeted person among digital marketers. He is a renowned business strategist, keynote speaker and the New York Times best-selling author of five books including Hug Your Haters. The creator of five multi-million dollar companies, Jay is an active venture capitalist and technology advisor, as well as an avid tequila collector, and certified barbecue judge.

 

 

4017_PRWeek_Entry_videos_-_Elise_Facebook_photo.jpgElise Mitchell is CEO of Mitchell Communications Group and the CEO of the Dentsu Aegis Public Relations Network. Known for turning her boutique communications firm into an Inc. 5000 fastest growing companies in the US, she’s regularly brought in to speak on her approach for achieving a deeper more meaningful success in business and in life. Business audiences are drawn to her columns on Entrepreneur.com, Mashable.com and other venues.

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Topics: Leadership, Branding