Lessons from Wells Fargo, Disney, Five Guys, and Zappos. Tell and sell traditional marketing is dead. The doctor pronounced it D.O.A. on Wednesday, May 15, 2013 at 10:30 a.m. EDT (Please bow your heads for a moment of silence). Cause of death was the empowered consumer. Empowered to avoid advertising, empowered to find their own information, and empowered to share their opinions.

traditional marketing toe tag

The experience is now the marketing

Today’s marketers need to focus on what they can control…the experience of their current customers. The challenge is figuring out how to “plus” up the customer experience. Is there room for growth here? Absolutely. According to the 2012 American Express Customer Service Barometer, “93% of companies fail to exceed expectations.” This means only 7% feel their business is valued and that the company is willing to go the extra mile.

Focusing on the one in hand as opposed to the 2,000 in the bush

Great marketing is about being so remarkably different that current customers can’t help but talk about you. That if you provide a delightful experience, customers will not only come back but they’ll bring their friends. They become your strongest marketing asset. In the recent words of Peter Shankman, “Stop focusing on trying to get new customers. Focus on the customers you have. They will bring you the customers you want.”

The late Ted Levitt underscores the importance of standing out through experience:

The search for meaningful distinction is central to the marketing effort. If marketing is about anything, it’s about achieving customer getting distinction by differentiating what you do and how you do it. All else is derivative of that and only that.

Smart marketers realize there is only one question relevant to customers, “Are you willing to recommend the product or service to a colleague, family member or friend.” In less than a decade, the NPS (Net Promoter Score) has become the leading measurement tool by thousands of organizations. It begs the question:

Why are referrals so important to an organization?

#1—The cost.

Wells Fargo Retention

Acquisition is becoming too costly. A brand can no longer afford to operate with a revolving door of churn. Retention is fast becoming the new acquisition. Let’s look at reasoning from both Wells Fargo and Disney:

Nearly 80 percent of Wells Fargo revenue growth comes from satisfying existing customers. The average Wells Fargo customer carries over five products which are more than two times the industry average.

Wells Fargo understands the importance of servicing the needs of their current customers to fuel growth. This is a quote from Wells Fargo back in 2009:

The more you sell customers, the more you know about them. The more you know about them, the easier it is to sell them more products. The more products customers have with you, the better value they receive, and the more loyal they are. The longer they stay with you, the more opportunities you have to meet even more of their financial needs. The more you sell them, the higher the profit because the added cost of selling another product to an existing customer is often only about ten percent of the cost of selling that same product to a new customer.

That last sentence deserves repeating, “It costs ten times to acquire a new customer than it takes to upsell a current one.”


Walt Disney believed in the same principle. He was adamant about giving extras to retain his current customers. He called it plussing. Here is a summary of the concept by John Torre:

Normally, the word “plus” is a conjunction, but not in Walt’s vocabulary. To Walt, “plus” was a verb—an action word—signifying the delivery of more than what his customers paid for or expected to receive…Because for Walt, nothing less than the best was acceptable when it bore his name and reputation, and he did whatever it took to give his guests more value than they expected to receive for their dollar.

Perhaps one of the best examples of Walt’s obsession for “plussing” comes from Disney historian Les Perkins’ account of an incident that took place at Disneyland during the early years of the park. Walt had decided to hold a Christmas parade at the new park at a cost of $350,000. Walt’s accountants approached him and besieged him to not spend money on an extravagant Christmas parade because the people would already be there. Nobody would complain, they reasoned, if they dispensed with the parade because nobody would be expecting it.

Walt’s reply to his accountants is classic: “That’s just the point,” he said. ”We should do the parade precisely because no one’s expecting it. Our goal at Disneyland is to always give the people more than they expect. As long as we keep surprising them, they’ll keep coming back. But if they ever stop coming, it’ll cost us ten times that much to get them to come back.”

This last sentence also deserves repeating, “If they ever stop coming, it’ll cost us ten times that much to get them to come back.”

#2—The reward.

Customers who come via referral are worth almost four times as much as a regular customer gained through traditional means. Why four times the value? I call this the v4 or “vouch for” principle. The simple equation is:

v4 = 2LTV + 2XR

Customers gained through referral will have upward of twice the average lifetime value (2LTV) compared to ordinary customers. They will also refer upwards of twice the amount of customers to the business (2XR).

Bottom line—are you giving your customers something to talk about?

Two companies that eschew traditional marketing to focus on the customer are Five Guys Burger & Fries and Zappos.

Jerry Murrell and his eponymous five sons at Five Guys Burgers and Fries (Matt and Jim travel the country visiting stores, Chad oversees training, Ben selects the franchisees, and Tyler runs the bakery) understand the importance of the customer experience. The concept of added value is baked into the business model at Five Guys. Here is the mantra from founder Jerry Murrell:

We figure our best salesman is our customer. Treat that person right, he’ll walk out the door and sell for you. From the beginning, I wanted people to know that we put all our money into the food. That’s why the décor is so simple—red and white tiles. We don’t spend our money on décor. Or on guys in chicken suits. But we’ll go overboard on food.

Zappos CEO Tony Hsieh refuses to see the experience as an expense. Rather, it’s an investment:

Our business is based on repeat customers and word of mouth. There’s a lot of value in building up our brand name and what it stands for. We view the money that we spend on customer service as marketing money that improves our brand.

Zappos estimates they only touch 5% of their customers directly (e-mail or phone), but when they do…they make it count. Faced with the tough situation that they can’t directly help a customer, Zappos will even look to a competitor to satisfy their needs.

Final thought.

Your brand is no longer what you say it is. To quote Wells Fargo, “Our brand is what people say about Wells Fargo to their friends and family. It’s how they feel about doing business with us and how they describe those feelings.”

Are you ready to move away from targeting eyeballs and earlobes? Are you ready to shift to reallocate your marketing budget from the prospect to the customer? Are you ready to navigate the longest and hardest nine inches in marketing…the journey to win the heart of your customers?