Andrew Davis is a popular keynote speaker who lectures on digital marketing, branding and growing your business. He’s a documentary filmmaker, the author of two books on marketing, and he previously worked for NBC, Charles Kuralt and the Muppets.
Andrew, you’ve been lecturing lately about the Loyalty Loop and how it is integral to marketing success. Can you tell us what that’s about?
The idea of the Loyalty Loop is building an experience so good for current customers that it helps you acquire the customers that you want. Our world has been commoditized. Telling people you have different features and benefits doesn’t work. Showing people you’re different is what makes a difference.
Experiences are more referable than products. They’re higher value. People spend more when they’re getting an experience worth paying for — sometimes up to 25 percent more. And it’s ownable, meaning it clearly differentiates you in the marketplace.
The Loyalty Loop is about ensuring that the experience you deliver is so meaningful and impactful that people talk about it in a way that brings you new clients or customers. They understand the value you provide, because they see the difference instead of hearing about it.
Can you give us a concrete example? What, specifically, should we do or not do?
I’ve leased a car from the same dealer for nine years — three leases. Every time my lease is up, the management team sends me a letter that says they assume I’m going to return the car, and they tell me what I need to do.
That’s not a great experience. It puts me in the market for another vehicle immediately. They haven’t even considered that maybe the easiest way to keep me as a customer is to make the experience of returning the car and getting a new one so good that I keep doing it.
So they don’t even try to get you to re-sign?
It’s so dumb, right?
The last time this happened, I ended up leasing a different car from another dealership. I spent more on another car. But if the lease company had said, “Let us make this easy for you. Let’s remove the friction in the car-buying hassle,” and for $5 more a month I could get a brand-new car with new features, I would have done it.
Why does using the Loyalty Loop work?
People who raise anticipation for the service they’re going to provide or the product they’re delivering see a huge increase in the quality of the experience people perceive. You have to maximize and raise anticipation; you have to maximize the honeymoon phase, which is the first use of the product. It’s a small window.
Then you have to maintain inspiration. How are you going to re-inspire people to feel the way they felt the moment they first showed off their new kitchen or car or shoes or exercise machine?
Starting with the customers you’ve got is best, because they already trust you. They’ve already committed to you. Are you making their experience so good that it’s easy for them to come back and do business again?
Here’s a great example: There’s a guy who sells siding, windows and doors. It’s a very commodities-driven market — everyone sells the same products. This guy realized that once somebody has committed to his service, the biggest post-purchase concern is, “What is happening at my house all day while I’m at work?”
With that question in mind, he’s created an amazing, simple experience. At one o’clock, every day he’s on the job, he sends the customer a little custom video of what’s been happening at their house and what to expect when they get home. He shoots it on his iPhone using an app he bought for $4.95. Every video he sends out gets 11 referrals, and seven of those close. And he charges 25% more than the average siding guy.
It’s not that hard for businesses to change their culture and the relationship they have with their consumers. You have to focus on the small micromoments of commitment, and understand what you’re trying to inspire in their mind next and the impression you want to leave.
How do you know if it’s working?
You have to measure two things. First, are people who get Experience A more satisfied than people who get Experience B? If so, that means you can increase the value of your product.
The other thing you have to measure is customer churn. Is there a decrease?
Part of the problem with marketing is that we’re so focused on the funnel. If you build an experience, you’re able to measure the impact it has on the consumer.
You talk about forming partnerships to make content more useful. Can you give us an example of what types of partnerships we should be looking for and how these can improve content?
Sure. I know a real estate agent who asks herself what people buy before they need a real estate agent. It’s where she has an opportunity to build a relationship with people that aren’t customers yet but may become customers.
She partners with a home improvement contractor who gets a ton of leads — people who are thinking about selling their house but want to make some improvements before they put it on the market or even talk to a real estate agent.
The real estate agent created content for the home improvement person that’s all about where you get the biggest bang for your buck when it comes to improvements on your home before you put it on the market. The contractor sends that content once a month to all her prospects and customers, and when they decide to put their house on the market, there’s one real estate agent they already trust: The one who has been introduced to them by the home improvement contractor.
When you are brought in to consult with a business who’s trying to overhaul its marketing department, what are some mistakes you see over and over?
The number one mistake I see today is people spend too much time trying to acquire new customers before they’ve maximized the return on the customers they already have.
I just worked with a business that runs an online membership community. They have 8,000 email subscribers who have not subscribed to the service. They spend all day trying to acquire new members without tapping into the 8,000 subscribers they already have.
Today everybody already has an audience and an email list. It’s important to leverage those contacts first, to ensure maximum ROI for those relationships before trying to market to everybody else.
What advice do you give clients about branding, as it relates to reputation management?
Every reputation is made up of a collective set of impressions you get from a brand. When a brand goes far afield of what it’s known for or offends a group of consumers, some customers will have a bad impression. But some others might love that they did something controversial.
I teach this exercise: Build a consumer journey and look at the emojis they would attach to each piece of this experience — happy, sad, angry, frustrated. What you’re looking for is how these impressions add up to an average. Putting too much emphasis on one piece of the consumer journey can be a tremendous detriment to the brand.