The 3Rs that every PM should know!

Living in Turkey for 2 years now has taught me this lesson, somehow. I find Turkey one of the most magical places on earth. However, I’m often frustrated about the quality of customer service.From what I’ve noticed, the main reason for many of my bad experiences here has to do with their mentality of a “customer”. They see the customer as a one-time transaction and believe that 90 percent or more of these visitors will not come back. So why bother to give these tourists a WOW effect or a decent experience?For a restaurant, for example, their thinking goes… the quicker I can get rid of the customer, the quicker I can place a new one at a table. This practice might have worked in the past, but in the of social media and review sites, they will suffer before they even realize it. The ripple effect of bad reviews can crush a company’s reputation without noticing and is hard to fix.

PMs tend to also fall into this trap. They build features and strategize experiences for a once-in-a-lifetime usage rather than thinking beyond that and using the first interaction as the beginning of a lifelong relationship.This is key as you have to consider the Life Time Value of each customer: What is the expected value that an average customer will spend till he stops using your services or products or till he switches to the competition?PMs need to evaluate all steps of the experience and analyze the cost (what the user give: time, effort, etc) and what the product provides (benefits, value, relief of pain, etc). Assessing the sentiment and relationship at every main step is what I like to call a Return on Relationship (ROR) analysis (the 3Rs). Our task when building great products is to maintain the relationship and improve it even further.

Why is this crucial?Simply put, it’s always easier to sell to existing customers than acquire new ones because:The customer knows you well and trusts you. They see you as the “expert.”You know the customer: At least you have some interaction and transactional data. What did he buy, what did he download, or click on? How long did the process last? Perhaps you have asked some pertinent questions along the way in order to be able to segment him better and try to have one-on-one communication with him.So it’s a total loss if these interactions and this relationship are not nurtured in a way that makes the product more valuable to the users, hence keeping them longer.It all starts with the power of the "WOW" EffectThe first thing you should do right after the first transaction is to create a WOW experience.We are all used to instant gratification. Next-day delivery is not enough anymore. We don’t have patience. We are easily distracted. We have all the info at our fingertips.So, how can we create a WOW effect in this environment? Most companies stop the sales process right after the transaction. They’ve received the money, so let’s go hunting for a new customer.Some immediate steps I’ve seen from great companies as best practice is:Communicate how the process goes orWhat you can do with your new car.Give some pre-education.Show some testimonials. This is so easy and your customers will talk about it. They will share your message with their friends and relatives.I’ve talked with a lot of founders and usually, their main concern is: “This will cost us and we haven’t budgeted this in our margins”Well, I can spend another post explaining that the result of this was a bad decision of building a cost-driven revenue model, but I think regardless of whether you have enough margins to WOW the customer or not, you need to realize that it doesn’t have to be expensive.You can hack it! You can appeal to emotions, social benefits, etc. However, I feel the best thinking shouldn’t be along this way. You need to be ok investing in your users before they do. When you think about it, everything works this way. CAC is an investment you put before the user actually “gets acquired”.This is why it’s called Return on Relationship (ROR)From there, it boils down to the 3RsThe relationship with your client has 3 unique objectives:Have the customer RETURN to you as often as possibleMake him or her an indirect promoter of your business by RATING and COMMENTING on his experienceFind the ambassadors that will be direct promoters of your business through REFERRALS and AFFILIATIONThis is the relationship framework you need to think of: the 3Rs (Return>Rate>Refer)The 3Rs Framework (ROR)1# ReturnStart with user segmentation. It’s remarkably important that you segment your users for this to be effective.Each of them will have different needs and a different time frame, but you can identify three phases that you should tackle differently.The Delivery phaseThe Nursing periodThe “After” periodThink what a customer will need or do just before, during, or after a particular experience (purchase, place an order, create the first task, etc). Who will he relate with? What will he do? What might he need? And try to leverage this. That is where you can surprise him and get that WOW effect.Take, for example, the purchase of a car, house, or even a new iPhone, something that increases someone’s status.After the purchase or before delivery, your client will definitely want to share it with his friends and relatives.To improve this “delivery” phase, a simple thank-you postcard can create the desired effect. For the "Nursing Phase," right after impressing the customer, we need to make sure that he uses our product or service (that’sthe only way he will experiencethe value and judge us without bias).He bought it with an end goal in mind. You should now help him to achieve the end goal in the best way possible. Tutorials, demos, and a quick call are all great examples of this.That’s why segmenting your customer base is crucial. Did he click on some links? Did he watch certain videos? Did he download some papers? All this information should have been tagged and should now allow you to do a proper segmentation job. You can also ask for more information throughout the experience to serve the user better via in-app surveys.Then, the “After" period comes. Once the nursing phase is over, you should stay in contact with your user on a frequent basis. You need to identify the key phases in your product experience lifecycle and try to send some communication on those key moments. Key moments are SUPER impactful (they’re these micro and cruial moments that impact the perception, experience and brand). For example, you can calendar the important events where you can contact your customers, like their relatives’ birthdays, Christmas, Valentine’s, Easter, Thanksgiving, start of school, holidays, or New Year. A simple message of appreciation, special discount will improve the relationship.The key is to always deliver valueFocus the communication on delivering great value to increase your perception with the customer. You can improve the value of your customer by either having repeat purchases of the same product or offering higher-end products, like coaching or consulting, advanced features, upgraded plan or simply a suggestion for another tool thag works well with your product (called complimentary value).Another way is to find ways of increasing the frequency of usage through continuity programs. This is like having a monthly or yearly fee and having limitless (or more) access to your service. Good examples are fitness centers or carwashes. You offer unlimited access for a monthly fee. People will use it more often, and you are securing monthly income. Even if you don’t have a service, you can create a monthly continuity program, create a course, or give some technical support.2# Rating and CommentingIn short, focus on building "Social Proof"Often, when people are uncertain, they decide based on the opinions of others. You go to sites such as TripAdvisor and look at the ratings or comments of others.We tend to look at the comments on Amazon, for instance, and even when there are no ratings or comments online, we ask our friends on social media or inside social groups.Big companies use the ratings and number of comments as a key parameter for their ranking algorithms: Google for the search results, Amazon to rank the products; Facebook to show post and Apple to rank the Apps.So, ensure having a process and motivating people to rate or comment on your product or service. You have to ask for it. You have to build a system into it. You can build an automatic e-mail to ask for comments, and ask about their experience. In product management or customer success, we call this CSAT (customer satisfaction score) or NPS. Positive sentiments are great social proof, and negative sentiments become a great source of insights.A key thing for this is to ensure asking proactively people who have used your product or service; those that really have experienced it. That’s why segmenting users upon this activity is important so that only these users get the "rating" automated email. For instance, you can ask those users who have used your app at least five times to rate your app. The probability of them ranking your app will be higher.Beware not to try and beat the system by only placing false reviews. Search engines, like Google, will penalize you for doing this.3# Refer and AffiliationIf you understand some of the basics of why some things go viral and others do not, you can increase the likelihood that you’ll get some free advertising.This R is all about developing “Social Currency”.To get a better understanding, look at young children. What do they do after drawing a picture? They all do the same thing . . . show it to their parents. This sharing continues through our lives. We want to show the car, the house, and the clothes we bought. We want to share our holidays and our achievements. This is also the main reason that social media has grown so quickly.We prefer to share things that we like or things that may make us look good. Every “share” is like a social currency.But it also means that people will normally be selective in sharing because of this social currency. You should, therefore, only motivate your clients who are really raving fans of your product.Most referrals happen when we are in a conversation with someone about a topic and relate our own "great" experience with it. "Great" is a key factor here. Thats why your main aim when onboarding new users is to focus on their firat-time experience and ensure a “WOW” experience. Usually, people associate a brand with their most high or low emotional situations.Let’s say you are talking about lower back pain with your friend, and remember you had a great experience with a chiropractor. You directly recommend it to him. Notice that this recommendation is free (1), you don’t get compensated for it (2), you have used his services and had a great experience with him (3). You don’t want to lower your “social status”.We have to identify the clients that will recommend using two main parameters:They have to be on one hand happy clients that believe in your product, and this means that they have bought it, used it, and got their desired end result. An effective way to segment these is through the RFM method. A segment that buckets customers based on Recency (R), Frequency (F), and Monetary value (M). We identify the most recent purchasers that have often bought, often with the highest total purchase value.Influencers with a good network. Do they have many friends on Facebook? Are they actively posting and sharing? Do they have a blog? You should identify them. Once you have identified your fans, the objective should be to motivate them to bring you leads. They will not do this to do you a favor. They will do it because they want to raise their status with their friends.Referrals happen in a conversation about a topic. Your fan should notice that the topic is related to your service or product. They should think of your brand as the reference. The best way to increase the likelihood that they’ll talk about you is to continuously communicate with your clients and give extra value to improve your relationship and expert status. Trigger their minds with questions such as, “If you know someone who might be interested in…”. They should introduce you. Give them tools to increase the likelihood of introducing you. These can be discounts, special VIP treatment, and extra bonuses, not for them but to give to their friends so they raise their social status!Paid Referral Model:Besides the free organic referral model, there is indeed a paid one that you should not neglect: affiliate or JV partners. But this is totally different and here you really pay people a commission (or some sort of currency) to help you market/sell your products. But they’ll do it as professionals. They will act as an external sales and marketing division and have to inform their customers that they get compensated for every sale.Automate Your BusinessYou should now have a fair understanding of what to do. The complexity, however, is that each prospect has a different nurturing need and different timeframe.There needs to be an automated process behind it. A system that follows up with each customer or prospect based on his or her needs and at the desired speed. A system that not only allows doing this automatically without increasing the sales force or marketing department but also helps the sales reps to be more efficient and effective by flagging the “hot leads” that are already educated and prepared for a visit.This means more than sending a monthly newsletter, but personalized content based on their behavior, just like a real friend relationship.Wrapping up…Often, the real value creation comes from the retention of your clients and improving that customer relationship over time. This is called ROR, return on relationship, which includes:ReturnRateRefer