CX expert Jay Baer on creating experiences that get your customers talking

Sometime in the 1980s, businesses started outsourcing their call centers to specialized companies in lower-cost locations to reduce operational costs. And further along the line, customer support started being treated as a cost center – a necessary, but non-profitable part of a business.

Today, more and more businesses are realizing the true bottom-line impact of creating great customer experiences. And if there’s someone who’s loving that industry shift, it’s Jay Baer.

Jay is many things. A 7th-generation entrepreneur, a tequila collector and sommelier, and a pretty sharp dresser, if we do say so ourselves. He’s also (and perhaps a bit more relevant to our podcast) a marketing and CX expert, author, and keynote speaker with almost three decades of experience. He’s written New York Times best-selling books such as Talk Triggers and Hug Your Haters, hosted and spoken in hundreds of events, and founded Convince & Convert, a digital strategy consulting firm that helps businesses gain and keep more customers.

Over the years, he’s seen just how companies have neglected existing customers in the ceaseless pursuit of closing newer deals and fueling the sales cycle while customer satisfaction and customer engagement were nothing but a footnote in the process. But the rising expectations of customers, not to mention a worldwide pandemic, have changed everything. These days, factors in purchase decisions that used to matter a lot, such as price, now matter less. And those that didn’t matter as much, such as customer experience, now matter a lot. In fact, he says the customer experience has never mattered more. So the question is, what kind of experience do you want to set?

This week, we had the pleasure of chatting with Jay about engaging with your customers, the wonders of worth-of-mouth marketing, and how to create stories that turn your customers into your own marketing department.

If you’re short on time, here are a few quick takeaways:

• Customer experiences aren’t inherently good or bad. The same product, service, and price point could lead to two completely different experiences based on how expectations are set.
• While an adequate service is good for business as usual, it takes an extraordinary, unexpected experience to spark conversations and generate word-of-mouth marketing.
• After creating the trigger, measure its efficacy. Social media comments, online reviews, and customer satisfaction surveys are particularly useful to assess the success of your strategy.
• Information is an asset – if you create value for prospects, even if it’s not about your products or services, some of them will eventually reward you with their attention, loyalty, and money.
• Today’s digital transformation and widespread use of automation have led to an empathy deficit. If you treat them with kindness and humanity, you’ll stand out.

If you enjoy our discussion, check out more episodes of our podcast. You can follow on iTunes, Spotify, or grab the RSS feed in your player of choice. What follows is a lightly edited transcript of the episode.

The art of keeping customers

Liam Geraghty: Jay, welcome. It’s great to have you on the show.

Jay Baer: I am fired up to be here. Thank you for the opportunity.

Liam: So, I was talking about all of your books and webinars and businesses and the whole shebang. Where do you find the time to do all of this?

Jay: Well, the truth is I’ve got an amazing team at Convince & Convert and other folks I work with who do most of the hard work. It looks like it’s just me, but it’s really them. I just take all the credit, which is my specialty. And I’ve also been doing this for almost 30 years. I’ve done, I don’t know, 75 to a hundred webinars a year for 10 years. You get pretty quick at it after a while.

“I love that we’re starting to spend more thinking time around, ‘Maybe we should spend more effort making sure that customers we’ve already earned are happy’”

Liam: Let’s talk about customer engagement. What does it mean to you? How do you define it? How do you look at it?

Jay: Well, it seems to me that customer service starts when the customer experience fails to satisfy. And I love the fact that this show and this line of inquiry exists because it’s always been true that it’s better for the business to retain customers than to have to go out and get new customers, right? We all know that. But for a long, long time, most companies didn’t really behave as if that were true. You think about how much time, money, and effort is dedicated in most organizations to net new customer acquisition, and it is dramatically more than the time, money, and effort dedicated to customer retention, customer satisfaction, and customer engagement. And that doesn’t make any mathematical sense, but it’s easier to measure new customers. It’s easier to test new customer acquisition strategies. And so I love that, culturally, we’re starting to spend more thinking time around, “Maybe we should spend more effort making sure that customers we’ve already earned are happy.”

“There is no such thing as an inherently good or bad customer experience. It’s always dictated by the prism of your own anticipation”

Liam: Yeah, 100%. I’m not sure which one of your books you wrote this in, but I remember reading: If you sell something, you make a customer today, but if you help someone, you make a customer for life.

Jay: Indeed, absolutely. That was in my book, Youtility. I wrote that book, geez, eight or 10 years ago. And I think it’s as true today, if not more so than it was then. Especially right now, right? The world is not at its apex from an ease of use perspective. And in a world where everything is a hassle, frankly, any sort of crumb that you get from a business or organization that makes it easier to work with them, to get the answer you need, to buy the products you want is something that customers will really treasure. One of the most interesting trends we’ve seen in the pandemic is that factors in purchase decisions that used to matter a lot, such as price, now matter less. And factors that didn’t matter as much, like customer experience, now matter much more. I would tell you that the customer experience matters to customers more today than it probably has in the history of the world.

Sparking word-of-mouth engagement

Liam: What are some of your favorite examples of good customer experience or engagement? You have some fantastic examples across your books. Which ones are your favorites?

Jay: I think part of it is understanding what customers expect and then meeting or exceeding that. Because what I call the expectation equation is really the key principle in this whole line of thought. There is no such thing as an inherently good or bad customer experience. It’s always dictated by the prism of your own anticipation. For example, if you purchase something online and on the checkout page, it says, “You should expect this to be at your home within four days,” you’re like, “All right.” If it shows up in three days, you’re like, “That’s amazing. What a great customer experience.” If it shows up in five days, you’re disappointed and you chalk it up to a bad customer experience. Nothing has changed – same product, same service, same price, same scenario. The only thing that’s changed is whether it exceeded or failed to meet your own expectations.

“The best way to grow any business is for your customers to grow it for you. But for that to happen, you’ve got to give them a story to tell”

When you think about how to exceed customer expectations, there are a few ways to do that that are most notable. The first is speed. How can you be faster than customers expect? The second is clarity. How can you be less confusing? And third is empathy. How can you be more human? If you can use technology or good staff training to exceed expectations in one of those dimensions, you’ll be in good shape.

Think about one of them, like speed. You may know that company Lemonade, a purpose-built online insurance company. And imagine you have a claim, such as your pipes burst in your house because it’s cold. Instead of having to call your insurance agent who comes over, fills out some paperwork, and then maybe you get a check in three to four weeks, with Lemonade, you go to their website, use a chatbot and say, “The pipes burst.” Then, you upload a short video that describes what happened. They use a whole bunch of AI and anti-fraud algorithms behind the scenes, approve your claim in five seconds, and then deposit the money in your account in five more seconds. The entire process is 10 seconds long. That is exceeding customer expectations in a way that would’ve been unfathomable just a short time ago.

Liam: That’s incredible. I also love the one about the cookies in DoubleTree Hotel. They’ve just been giving out cookies for the last 30 years, isn’t it?

Jay: Yeah. And it wasn’t intended to be this huge word-of-mouth success factor. It was like, “Well, let’s just give people something because that would be nice to do.” But it sort of took on a life of its own. I think that all the DoubleTree by Hilton hotels give you a warm chocolate chip cookie when you check in. And it’s important to note that this isn’t just a cookie that’s lying around or in a plastic wrapper – they actually have an oven in every hotel. When you check in, the front desk person goes to the oven and pulls out a hot cookie. One of the key things is that it gets all your senses. You’ve got smell, you’ve got taste, you’ve got touch because of the temperature, et cetera.

“Nobody’s going to say ‘Wow, what soft toilet paper in the room,’ or, ‘Wow, what a nice elevator.’ That’s not going to do it”

I’m not sure what the numbers look like now, but before the pandemic, they were handing out 75,000 free chocolate chip cookies a day. Now, that’s a lot of cookies, right? In my book, Talk Triggers, we did a whole research project in cooperation with Hilton because we wanted to know the actual word of mouth impact of this cookie. And it turns out that about a third of their customers say they have told somebody else a story specifically about that cookie. Now you think about this, 75,000 cookies a day, a 33% pass-along rate. That’s approximately 25,000 stories a day, every day.

As a result, DoubleTree spends less on advertising than almost any hotel chain based in the US. The cookie is the ad, and they successfully turn the guests into a volunteer sales and marketing department, which is, of course, the best thing you can do in any company. The best way to grow any business is for your customers to grow it for you. But for that to happen, you’ve got to give them a story to tell. And nobody’s going to say, “Wow, that pillow was so comfortable you won’t believe it.” Or, “Wow, what soft toilet paper in the room,” or, “Wow, what a nice elevator.” That’s not going to do it. It has to be something they don’t expect. And for DoubleTree, it was the warm cookie.

Going for extraordinary

Liam: As you say, nobody’s going to want to talk about humdrum experiences to their friends and family. What advice would you give to companies trying to create that point of difference about the talk triggers?

Jay: You’ve got to understand that competency doesn’t create conversation. Competency is, of course, really important in business. It’s what keeps your customers, it prevents defection and churn, but nobody talks about the good, right? I’ve never said, “Hey, let me tell you about this experience I had last night. It was perfectly adequate.” Nobody ever says that because that’s not a very good story. That’s a terrible story. So, you’ve got to have one. And it’s almost always something that you don’t expect. It’s not so much that it’s marginally better, it’s that you just didn’t see it coming.

Lots and lots of hotels have a pile of apples in a bowl on the front desk, or at least they did pre-pandemic, but nobody ever tells a story about apples. They don’t quite take it to the appropriate place, right? It’s not hot, they don’t hand it to you, it’s not an experience. It has to be experiential to turn it into a story. But it can be something really simple.

“They have turned something that you don’t typically associate with professional services firms into their greatest competitive advantage”

There’s an accounting firm in Indianapolis, not too far from where I live, called Bognet Often Dodges. And they are, by all accounts, unremarkable. It’s a small accounting firm, Paul and Tim, and they’ve got an associate and a front desk person. There are four people there. They do personal tax returns and small business returns and charge the same as pretty much every accounting firm. There’s nothing special about them, except for this. They respond to every client phone call and every client e-mail within five minutes. A five-minute response time from an accounting team firm. Now, you don’t expect that from an accounting firm. And if you look them up online, they’ve got 75 Google reviews, which, for an accounting firm, is in and of itself amazing. I’ve had a lot of accountants in my life and I’ve never been compelled to leave a review. And if you look at their reviews, almost all of them mention how fast they are. They have turned something that you don’t typically associate with professional services firms into their greatest competitive advantage.

This is the kind of story that we’d be out having dinner and I would say, “Man, you won’t believe what happened. I called my accountant, and he got back to me in two seconds. I never see that.” So, you want to make it a proactive story that your customers want to tell. And for that to happen, it’s got to be something they do not expect.

Liam: That’s such a great example because I can’t remember the last time I spoke to a friend or family about my accountant.

Jay: Right. You’re not going to look at your tax return and be like, “Wow, all the numbers add up.” That’s what they do.

“You can be faster than they expect, kinder than they expect, more useful than they expect, and you can be more generous than they expect”

Liam: And so, how do you measure if your talk trigger is still creating conversation down the line?

Jay: So, a talk trigger is defined as an operational choice designed to create conversations. So, operational choice, give everybody a warm chocolate chip cookie that we bake on site, answer all calls and e-mails within five minutes, handle insurance claims within five seconds, et cetera. There are a few different ways to do it. You can be faster than they expect, kinder than they expect, more useful than they expect, and you can be more generous than they expect. Ideally, the way to measure it is to extend the talk trigger to your customers. And then, rule number one, check to see if they have mentioned it. Do you see it on social media? Do you see it in your reviews? This is observed talkability.

The second thing you want to do is measure talkability. Typically, you would send them a survey of some kind. You can append this to your existing customer satisfaction research. So, let’s say you go to DoubleTree and you get your cookie. Three days later, you might get a survey from Hilton that says, “Hey, how was your experience at DoubleTree?” Maybe a net promoter score type survey, like “Zero to nine, would you recommend us to a friend?” Great. Then you ask a second question, which is, “Since you stayed with us, have you told anybody a story about this hotel?” Then you ask one more question, which is, “What did you talk about?” And you give them a list of attributes such as comfy bed, nice elevator, heated pool, good food in the restaurant, warm chocolate chip cookie. You put the talk trigger in the list of options and check to see how many customers check that box in the survey. And that gives you a sense of aided awareness of the talk trigger. That’s typically how we measure it.

Keeping up with expectations

Liam: Talking about one of your other books, Hug Your Haters, a startling statistic was about how 80% of companies say they deliver outstanding customer service, but only 8% of their customers agree with them. Jay, that is a chasm of difference in opinion. How can that happen?

Jay: That research was from Bain initially, and that was a few years ago. Not long ago, it was reproduced with similar results. Now, I think it’s like 84% of companies say they deliver superior service and 11% of customers agree, or something like that. It’s essentially the same, unchanged. And I’ll tell you an even scarier statistic. Today, the American customer service index, a roll-up statistic that measures customer satisfaction across all industries and business types, is the lowest it’s ever been in history. Meaning that customers believe that customer service is worse today than it has ever been. So, despite all the time, effort, and money we’ve spent on improving customer service, customer engagement, customer experience, we have made seemingly zero progress whatsoever, which is a problem.

“It’s incredibly difficult to be good at this, not because it’s mechanically hard or expensive, although that’s part of it – it’s that customer expectations don’t stand still”

Here’s the deal. Nobody wants to admit they’re poor because what does that say about you as a manager? So, psychologically, you are incentivized to believe things are better than they actually are. That’s just human nature. But also, so many organizations tend to use stories as data. “Remember this one time when this one customer was super happy because we did this one thing?” That becomes the legend inside the organization. And because it’s a story, it takes on disproportionate power and becomes the filter through which the organization looks at its customer satisfaction initiatives. Whereas when you look at the actual data, you’re like, “Well, yeah. We treated somebody really well one time, but on the whole, we treat them not very well at all.”

Now, I don’t want to be too negative because it’s incredibly difficult to be good at this, not because it’s mechanically hard or expensive, although that’s part of it – it’s that customer expectations don’t stand still. I’ve been doing this for a long, long time, and I’ve never, in my entire life, had a customer say to me in a research scenario, “I’ve been thinking about it, and it’d be fine if they just did this more slowly.” So, what was fast three years ago would be slow today. And the same is true with other dimensions of customer experience and customer engagement. It’s a challenge for businesses because even if you’re better than you used to be, you may not be getting better as fast as customer expectations are escalating. You are always playing catch, and that’s a tough situation to be in.

Embracing criticism

Liam: You have two types of complainers in the book, each with very different motivation behind it.

Jay: Yeah. We did a lot of research on this topic, and what we found is that there are two big groups of people who complain about businesses. We call them onstage and offstage haters. The onstage people typically want to complain in public, which in the modern age is reviews, social media, discussion boards, and forums. And they don’t just want some measure of satisfaction from the brand – they also want an audience. They like to interact with other customers who say, “Yeah, they are a terrible company.” They sort of have their pitchfork and their torch, and they want to kind of have a call to arms, if you will. The offstage haters are people who typically complain in private. So that would be an e-mail, chatbots, phone, and so forth. They don’t necessarily want it to be this whole public conversation, they just want to get their problem solved.

“It’s getting harder for businesses, not easier, over time”

We found that younger people tend to be a little bit more comfortable with the onstage complaining in social and avenues like that, but it’s not necessarily a demographic split. At some level, it’s just who you are as a person and also what your issue is. Everyone in their head, when they have to complain about something, plays a little mental calculus, “All right, I have a problem that I need to get solved. What is the best way to get this problem solved most quickly? Is it a chatbot? Is it phone? Is it e-mail? Is it Twitter DM? Is it something else?” We all do that calculation in our heads in real-time. And then, we pick the channel we are personally comfortable with and which we think will produce the best results.

Since I wrote that book, the expectations by channel have changed a lot. And in a lot of organizations, what they’re trying to do, and rightfully so, is have the same response time and pattern regardless of where the customer chooses to interact with the business. So, your response time in chat is the same as e-mail, the same as social, the same as phone. And that makes a lot of sense from the business perspective because if you’re way faster in chatbot than you are anywhere else, what are you doing? You’re training your customers to use that particular tool that may or may not be desirable for the company. So, having that kind of consistent service of level agreement and that consistent pattern of care is a best practice, but it’s hard to do when each of those is very distinct and different technologies have different staffing patterns. So it’s getting harder for businesses, not easier, over time.

“My friend Shep Hyken has a great quote that I’ll appropriate here, ‘A customer that you ignore is a customer you should be prepared to lose’”

Liam: And I suppose you can’t afford to ignore any of them, no matter which platform they’re contacting you with.

Jay: No, that’s the worst thing you can do. We actually tested that extensively. The worst thing you can do is not answer. That sounds self-evident, of course, but it is shocking how many customer complaints are never answered. That’s happened to me, and I’m sure it’s happened to you. It’s probably happened to everybody. And I’ll ask you a simple question. If you had a problem with a company, chose to raise that complaint in some form or fashion, and you didn’t hear anything back, did that make you feel better about that organization? I think probably not.

My friend Shep Hyken has a great quote that I’ll appropriate here, “A customer that you ignore is a customer you should be prepared to lose.” He’s exactly right. Shep nails it with that quote. And you don’t have to solve the problem – you just have to acknowledge that they asked. That’s the key. And we actually tested that in the book. Obviously, it’s better if you can fix the problem, but you don’t have to. You just have to say, “Yeah, we heard you. We’re sorry, that sucks.” And typically, that will actually have an impact on their customer loyalty.

Information is power

Liam: You mentioned a bit about one of your earlier books, Youtility: Why Smart Marketing is About Help, Not Hype. I think it’s probably helped so many people with the Youtility framework. For people who haven’t heard it before, I’d love to hear about that framework.

Jay: The idea of Youtility is that if you continue to create value for your customers and prospects, even if it’s not about your products and services per se, eventually a portion of those customers will reward you with their attention, with their loyalty, with their trust, and with their money. I’ll give you a good example of youtility in practice. There is a real estate agent in Florida, his name’s Joe Manuasa, and he’s an interesting realtor because he only represents sellers. If you want to buy a house, he doesn’t do that, which is a little unusual. And he only represents sellers who have homes in maybe the half a million-dollar range, which is not a super expensive home for Florida. And what’s true, if you have a home at that particular price point, it’s often the case that you don’t have a lot of upside equity in that home.

And so, you want to be careful about how much money you’re going to pay out in commissions. Consequently, a lot of customers in that category will think, “Yes, I could use a listings agent to sell this home, but I have to pay the agent 6% of the purchase price as commission, so maybe I could try to sell it myself. And if I can sell it myself, I keep all the money.” Well, what 99.99% of real estate agents would do would be to convince those people that, “No, look. Maybe you could sell it yourself, but you’re not a professional. You don’t know anything about this. You don’t know the market, you don’t know the paperwork, you don’t know what to look for. That’s too risky. Do not try this yourself.”

“People get to about page 13 and say, ‘Holy cow, is it hard to sell a home. I want nothing to do with that.’ It’s literally his number one source of new customers”

Well, Mr. Manuasa does the exact opposite. He sat down and wrote a 63 page downloadable PDF and merchandised it all over his website. It’s called How To Sell a Home on Your own in Florida, and it is literally, step-by-step, exactly what to do, who to call, which paperwork to fill out. I interviewed him for a book I wrote called Youtility For Real Estate, which is the same principles only for real estate. And I don’t understand this man. It seems to me like he’s giving people exactly what they need to not hire you. “Joe, I understand why you think that. But what you also don’t understand is that people get to about page 13 and say, “Holy cow, is it hard to sell a home. I want nothing to do with that.” It’s literally his number one source of new customers.

Liam: That makes so much sense because when something’s broke in the house, a piece of plumbing or something, you’re like, “Yeah, I’m going to fix this myself,” and you look it up on YouTube. And half an hour later, there’s water flying out, and you’re like, “Oh, maybe I should just call the person who’s making this video.”

Jay: Yeah, you made it worse. You just doubled the price. That’s me. I’m not really a DIY guy. I’ve got a great list of phone numbers. That is my handyman skills there.

Doubling down on empathy

Liam: It’s been almost two years since the pandemic began. In that time, there’s been a huge shift in customer expectations. And even though we’re hopefully progressing to near normality, how should we be evolving to meet these new customer needs? And do you think it will still remain the same?

“If you’ve got any kind of information that tells you what your customers think, feel, and desire and that research is 18 months old or older, you don’t actually have any research”

Jay: I don’t know if it’ll remain the same, but there’s a couple pieces of advice I have. The first is that the businesses that will win over the next 24 months are businesses that understand their customers the best. And I mean, understand their customers of today the best. If you’ve got customer attitude research, customer personas, or any kind of information that tells you what your customers think, feel, and desire and that research is 18 months old or older, you don’t actually have any research. Customer attitudes and desires have changed that much that quickly. You’ve got to really lean into customer understanding right now, this year.

The second thing is that even though we’re in an era of massive digital transformation and there have been a lot of moves toward automation for obvious efficiency gains, we have to understand that efficiency must be balanced with empathy. And yet, we’re in an empathy deficit. I’m a seventh-generation entrepreneur. My family’s been self-employed since the mid-1850s. And the number of times I had a conversation with my dad or my grandfather about treating customers with respect and dignity and kindness and humanity was literally zero times. Never, not once. That was the default state. We just called it business. But now, somewhere along the way, we kind of lost our way. Partially it’s cultural; we’re not as kind to one another as we used to be. But some of it is driven by technology, efficiency, and automation. And that makes me a little sad. Today, if you treat customers with a little bit of extra kindness and humanity, it is massively powerful because it stands out. They don’t expect it from you anymore. So, you’ve got to find a way to do both, to be efficient but also to be human.

Before the pandemic, I was going to Australia to speak, and my wife got to come with me that time, which was a lot of fun. We were in Los Angeles getting ready to make the connection to make the long flight over, we’re getting on the plane, the gate agent scans my boarding pass and looks in that little black box they have. I don’t know what’s in the box, but I think it’s your frequent flyer status and your seat number and whatever, because she pierces in there and picks her head up, “Mr. Baer, thank you very much for your loyalty here on Delta. We appreciate your diamond medallion status. Hope you have a fantastic flight.” And that was really nice to hear, but I flew so much in those days that I’d heard it before, so I didn’t pay much attention.

“That’s not about technology. That’s about allowing your team to read the room”

Then, she scans my wife’s boarding pass, pierces into that black magic box, and discovers, I presume, that my wife has very few frequent flyer miles at all, and goes, “Oh, Mrs. Baer, I’d like to thank you for what you must be doing at home to allow Mr. Bear to spend so much time with us here on Delta. So, ma’am, in particular, I want to wish you a spectacular voyage.” And we went down that jetway in tears, I kid you not. Because not only did she totally nail our relationship dynamic and how important my wife is to allow me to do what I do, but she did it at the moment and acknowledged her role. And that’s not about technology. That’s about allowing your team to read the room, right? The definition of empathy is not the customer’s always right, the definition of empathy, I think, is this, to understand and share the feelings of another person. And that’s the piece that we can’t lose sight of.

Liam: That’s fantastic. I suppose there’s nothing better than hearing that message and that story. Before we wrap up, what’s next for you? Do you have any plans or projects for 2022?

Jay: Always plans, always projects. I’m working on a new research project and probably a new book around speed and the notion that you don’t have to be the best-est if you’re always the fastest. I’ll tell you more about that when we get a little closer. What I’m spending a lot of time on right now in preparation for that is my newsletter. It’s called The Baer Facts and comes out every two weeks. Each issue has a customer experience or marketing story, recommended books, recommended podcasts, and recommended tequila because I’m a tequila sommelier, as well. If you go to baerfacts.com, you can sign up.

Liam: Brilliant. That’s excellent. Jay, thank you so much for joining us today.

Jay: My pleasure. What a fun time.