Welcome to Growth Interviews!
Welcome to Growth Interviews, the fun, stimulating and engaging series of conversations driven by digital business growth.
Our mission is to provide insights and ideas from world-class professionals on the topic of growth and to cut through the noise of so-called marketing tips and tricks, revealing the money-making strategies behind e-commerce.
Each episode is an intriguing challenge involving an insightful expert who reveals some of their best-kept secrets, which you can use right away to boost your business.
In this week’s episode of Growth Interviews, we invite you to join our conversation with Karl Gilis, one of the most influential CRO experts in the world (#3 according to PPC Hero), also known as the Conversion Comedian.
Karl has been optimizing websites since 2001, based on user research and facts. In the last few years, he’s been obsessed with AB-testing, mainly because it allows him to see the impact of changes he proposes based on research. Karl Gilis teaches at several universities in Belgium and speaks at conferences all over the world. His clients include Suzuki, Thomas Cook, Tui, Shell, and Daikin.
In the course of the interview, we spoke with Karl about why people stop being customers and what companies should do to avoid that. We’re sure you’ll have lots to learn from his responses, so free up your next 20 minutes and watch this video.
Has this caught your attention? Check out the full transcript below for more tips & tricks.
Starting with a Focus on the Customer
How did you get into the digital space?
Karl: It all started in 1996. I was making websites so I started a little company and a little web business. I didn’t have enough clients and I was a big nerd – I still am. I started a website with news about computers and IT and favorite downloads, and stuff like that.
One of the things I did – I think it was Netscape 2.0 – they allowed frames and I made something where you had to open a curtain to see my website. It was a brilliant idea. There were forums all over the world talking about it and I even won a design prize in a little magazine in Belgium. I was so proud. Then nothing happened. No subscribers, nothing!
That was in the days before Google, so I installed a counter – one of those little old counters – on the curtain, and then on the real homepage. I noticed that about 80 percent of all people that came to the website didn’t go beyond the splash screen. When I removed the splash screen – my website skyrocketed. That was probably the first time that I realized, ‘Don’t do stupid things on your website, and make it accessible for everyone!’
I didn’t know the word usability or anything about it, but that’s how I stumbled upon it. Then, in 2001, I started AGConsult and 20 years later we’re still doing the same thing. That’s the story.
What keeps you going on in the area of CRO, UX and customer retention?
Karl: I really believe it’s the most important thing to do as a company. It’s also one of the things that almost no company seems to care about, or they pretend to care about it.
There are two nice studies. One is from the Rockefeller Group. They found out that the main reason about 68 percent of all people stop being a customer – or don’t even become a customer – is because they have the feeling that the company doesn’t care about them. That’s way more important than customer service, the quotient for a product, and your competitors having a better price. So that’s one problem. People have the feeling that companies don’t care about them.
Then, there’s the second study, by Baynes & Company. They surveyed a lot of companies and 80 percent of all companies say, ‘We are customer-centric!’ They then surveyed the clients of those companies, and only eight percent of those say, ‘Those companies are customer-centric!’ So, there is a big gap between what companies think or pretend they do and what they think customer centricity is (on the one hand), and what clients think.
Our job, or my goal in life, is to close that gap and to make sure that there is not a disconnection, but a connection between the customer and the company. If companies lose their connection with their clients, they will go bankrupt one way or another, or fade into oblivion.
That’s what we’ve seen throughout history. If you see the rise and fall of companies in the last 120 years, it always has to do with losing that connection with the customers. Every company starts or becomes big because they have a good idea, so every company, in the beginning, is rather customer-centric. Then, at a certain moment in time, most companies forget about the customer and only care about running their business. They run the business, ‘Yeah, we’re making money!’ Suddenly, there is a competitor that is eating their market share.
We just talked about Uber. A lot of people think Uber became big because of the sharing economy and because of the digital disruption. I think those are bullshit stories. The main reason why Uber became big is that they understood the frustrations that clients of classic taxi companies had. In every city, it’s different; how I get a hold of a taxi, how I can call a taxi, when the taxi arrives, will I recognize the driver, if I can pay with a credit card or not, how much it is going to cost. In Bucharest, if you take a taxi to certain places, you have no idea how much it’s going to cost. Uber solved all these frustrations, all those barriers that people had with the classic taxi companies, and that’s why it became so big.
The sharing economy helped. That’s the most beautiful reaction all over Europe. I don’t know how it is here, but in Belgium, the classic taxi companies went to court saying, ‘Uber cannot be allowed!’’ So, they blame the other one and they didn’t understand. I think most still don’t understand, and it’s their own fault! It’s because the taxi companies didn’t see the frustrations of their customers anymore.
If you see the rise and fall of all companies, they turn from a customer-centric company into a business-driven company and they don’t see the frustrations and goals of their customers.
Usually, e-commerce businesses spend more money on customer acquisition because they view it as a quick way of increasing revenue. That’s wrong! Customer retention is a more effective way of growing your revenue because you don’t need to attract, educate, and convert them.
What are the benefits of customer retention? Loyal customers are:
? 5x as likely to repurchase;
? 5x as likely to forgive;
? 4x as likely to refer;
? 7x as likely to try a new offering.
Many businesses turn from customer-centric companies to business-driven companies. They lose connection with their customers, and they enter a vicious circle where they constantly need to bring in more customers so they don’t go out of business.
Understand Customer Frustration
You were saying before that innovation is not so much about technology, as it is about understanding customers’ frustrations, which drives companies further and ultimately satisfies investors.
Karl: Yes, and then use the right technology, because technology and innovation are incredibly important! But, what we see is that a lot of companies, and especially in marketing, see a tool and want to buy that tool. ‘It’s personalization! We have to do personalization. We have voice search! We have to use voice search.’ They all jump on the bandwagon for the new technology.
That’s wrong, because then you’re a fool with a tool, and a fool with a tool is still a fool. You have to understand what the customer’s needs are, what the biggest problems with our company are, and then what kind of technology can help us to make the lives of our customers better. A lot of companies use technology to make their life as a company, as a marketing team, or as a sales team better.
No! Your job is to make the lives of your customers better, to take away their frustrations and to fulfill their needs. Yes, innovation and technology are extremely important. But, you should always start with the customer.
I know everybody’s always talking about Amazon. Jeff Bezos says this: ‘One of the questions that people ask me the most is “What is going to change in the next 10 years?”’ And he’s like, ‘I have no idea. I don’t have a crystal ball. One question that nobody asks me is “What is not going to change in the next 10 years?’” That’s the most important question, because if you know what is not going to change, you can build a business strategy.
In the case of Amazon, it’s about the customer. An Amazon customer is never going to say, ‘I like Amazon! All products should be more expensive.’ Nobody’s going to say, ‘I like the delivery, but it shouldn’t (have to) be tomorrow, just deliver it whenever you want, it can be in two weeks or three weeks.’ Nobody will ever say that!
That’s also what I’ve seen. What kind of makes me happy, but also sad, is that in the twenty years I have been doing this, a lot of the technologies have changed. What customers want from a company, what they expect from a company,and what makes them happy to be a client, has not changed in twenty years and it will not change in the next twenty years.
What frustrates you about the current digital landscape?
Karl: My biggest frustration is that people don’t understand how important customer centricity is.
Another thing that frustrates me at conferences like this is that I talk a lot about principles and methods, and people agree. Then, I give them an example of how you can apply it and everybody takes out their phone. So, what I know is that they will copy it, that ‘outing’ of the idea. But that’s not a good thing, because your website is not the other website, your product is not what the other company is selling. It’s more important to understand the principle, the psychology principles, the guidelines, and the way we do research, than the perfect outing of it.
That’s just an example. A lot of people love tactics and they are important, but you have to really try to understand what makes you different. Because if you’re doing the same thing as your neighbor, if you’re just copying the most popular websites in Romania or in your business, why should I buy from you? You’re just a copy and a copy is never as good as the original. You should find your own tone of voice, your own DNA. That is so important! The smaller you are as a company, the more important that becomes – your own tone of voice. Be yourself!
When you’re young, most people want to copy everything, and you have posters of film stars, movie stars and rock bands, and you wonder, ‘I want to be like that!’ I don’t have posters in my bedroom anymore from events. I want to be me! And I think as a company it’s the same. You should be you and not a copy of someone else.
Marketers think the way to go is by copying experts like Gary Vineyard and Neil Patel. What do you think?
Karl: They found their niche. Gary found his niche. I don’t like him. He’s doing a good job and a lot of people like him. More people like him than me. Neil Patel found his niche and is doing another thing – that I’m not in favour of. And that’s good. It’s very good. That’s also what marketers should understand. Some people like Gary and other people dislike Gary. Some people like Neil and others dislike him. That means that they have their own feelings and there’s a voice. It’s the same with me. I have people who hate me for what I do, and people who love me. That’s a good thing. You have to find your tone of voice, your niche, don’t copy. It’s a problem.
How do you build customer retention?
The complete customer retention formula is simple:
Shared Interest + Shared Space + Shared Concern = Customer Retention
However, this is not a new concept and it doesn’t tell us much. So instead, there are four key things every e-commerce business owner should focus on:
? Your job is to understand customers’ frustrations and try to make their lives better;
? Instead of focusing on what’s going to change, focus on what will remain the same and build your business strategy around that;
? Don’t copy what others do; try to understand what makes you different, find your own niche, your own voice;
? Turn customers into brand ambassadors; if they’re willing to recommend you, you’re doing something right, and you should continue doing it to grow your business.
Change your Perspective about Customer Retention and Company Goals
If a third of e-commerce businesses are not even monitoring their retention, what can we expect from them in terms of growth?
Nothing. That’s really one of those things that I don’t understand – I didn’t study economics. All those companies spending money on attracting new customers and not caring about existing ones. I don’t know how it is here in Romania, but it must be the same in the telecom industry with subscriptions. In Belgium, people are almost programmed to buy a new subscription every year from a different provider because the new provider gives you so many free minutes. And they’re always switching.
Every customer feels so frustrated when he’s like, ‘I’m a customer for this company for one year and then I have to pay double the amount that I had to (previously). New customers get reductions.’ I think it should be the other way around. Once you have a customer, be happy, treat him with respect. That’s what I said. The customers don’t have the feeling that the company cares about them and then they say, ‘Bye bye!’
Customer retention is very important. I think it’s one of the most important things. That also means that you have to have customer satisfaction and strive for customer happiness throughout the whole cycle.
But I see that a lot of businesses still do this. Even when they understand or think they understand customer centricity, usability, and conversion optimization, they focus on the website. Somebody comes in, they buy, and then it’s done. They have the money and they think like, ‘Screw you, little client!’ It’s like, ‘Nooo!’ Then it just hurts. You have a beautiful website and then you get a terrible mail like, ‘We received your order. Shipment is now.’ Everything is gone! The relationship with the client is boring: every step from the first ad they see until even the little note in the package saying ‘If there is a problem, you can send it back to us.’ That should have the same tone of voice, the same feeling. That’s what it’s all about. I never understood marketers, and what they were thinking about those things.
How can we change the way that companies are behaving toward their customers?
Karl: It’s a difficult thing. I think that’s one of the hurdles I have with most companies. They hire us, we do a great job, but half of the companies don’t do anything with it and that’s when we stumble upon corporate cultures, company cultures, mentalities.
I think it has to do with how people are raised in old style companies, but some new companies have it, too. It’s horrible to say, but in most companies, you’re only rewarded when you do good things. Nobody comes to you saying, ‘You did an experiment on my website and we lost two million dollars last week.’
The fear of experimentation in companies is so big. Everybody is learning to say ‘Yes, yes, yes!’ to their bosses and especially the middle management. For me, the problem with most companies is the middle management. They’re trained in just taking no risks and doing like, ‘Yeah, yeah, yeah.’
Once again – I don’t know the exact word – but there’s a quote from Jeff Bezos: ‘You have to do experiments and you have to embrace failure.’ I think that’s an important thing. Experiments make everything better, not only the website but understanding your customers. The moment you don’t evolve as a company, and you don’t experiment and don’t try to understand the user, I think you’re lost.
It’s like booking.com doing experiments every minute, like Amazon with what they call the pizza team: a team can never be bigger than the number of people that can eat two pizzas or something. That means that, on average, teams are made of eight persons and those eight people can almost work independently.
That is so important! There are no 70 management levels up and down. This is your responsibility and – that’s also important – everybody in the company should have the same final goal.
Even now, in the marketing department, you often see the goal of SEO people to rank on page one. The goal of PPC people is to drive traffic to the website. Many of the UX people or the conversion people have to turn that visit into a customer. Many of the after-sales peoplehave to make sure that it’s a happy customer. No! The final goal for everybody in a company is happy returning customers. That’s it. Done! Every management book is one page from now. What should you do in a company? Make your customers happy. Done! Read the book.
How important is customer retention?
Keeping your current customers happy is good business in the long term and growing businesses are more likely to prioritize customer success than those with stagnant or decreasing revenue. Bad customer experience or bad customer service, on the other hand, are leading indicators of customer churn.
A business simply can’t grow sustainably if it has a churn problem, and you can find early red flags for churn by gauging customer satisfaction.
Shaping the Future of your Business, and Young Marketers
Give some advice for someone who is stepping into the digital landscape.
Karl: Don’t copy others! Find your own voice. Really try to understand your customer. Have fun in life!
For me, it’s very important. Don’t go with your ego. I think that’s the biggest problem. It’s typically human. I still have a huge ego, but ten years ago I thought I was on top of everything and then I learned things and I was like, ‘Damn, I know nothing!’ Go trust your gut feeling, know what you’re doing and if you’re running a business, the main goal should not be running the business or making more money. The main goal should be the customers and then the rest will follow.
I always see that image of Jeff Bezos in the interview from ‘96 when they’re sitting behind a desk and that desk is like an old door on two things. The interviewer was like, ‘What are you doing?’ He said, ‘Yeah, but if I had bolts, a fancy table, I would have less money to invest in customer satisfaction.’
I see so many startups and the first thing they do is to buy the most expensive smartphone, the biggest laptop, and a car. No, no, no! Then you’re in business for yourself and not for your customers. I think for start-up businesses, the most important thing is, if you don’t care about customers, don’t start the business.
The speaker before me asked, ‘Who of you…’ – there are about 800 people in the room – ‘…really cares about their customers? Who of you really loves customers?’ There were eight people (who said they do). That’s one percent! All the rest – I don’t know what you should do with them – should stop doing business; if you don’t care about your people, your customers, don’t do business. That’s the wrong thing.
Why are you doing this? You’re doing this because you hope sometime that you…you’re not in the business for the money. In the end, maybe. But you’re in the business to help people make their websites better, their businesses better, and to understand their customers better. That should give you a good feeling, if you make your customers happy and then there is a reward for you.
I was in it. I think I half-stole it from Brian Eisenberg, I don’t know, but if you give your customers what they want, what they expect, they will give you what you want. In ordinary words, it’s money, but it’s about customer relationships, customer loyalty, and customer happiness.
How do you see the future of business for the younger generation?
Karl: Predicting the future is the most dangerous thing to do. Nobody can do it. Crystal balls don’t exist. What I see with the young people working in my company is indeed that they have a different take on life, they like their work but the work is…let me tell you a story.
In our own company, I used to be that typical manager with micromanagement things. It was sort of difficult for me, after 10 years doing my business on my own with Els, to leave our people doing their thing. They were unhappy and a lot of people were leaving the company. So, there was no employee happiness at all.
Then, two years ago, because I’m speaking everywhere, Els was speaking everywhere, we had to let the team go by themselves. Just like, ‘Do it!’ We never had so much profit as a company. The customer satisfaction stayed the same, it didn’t grow, it didn’t get higher because it was already pretty high. But employee satisfaction is way up. It’s again about customer retention, employee retention, when you make people happy and then you see that if you do a good thing, your employees care about customers.
I hope that’s changing with younger generations. I have a feeling that the people working for us care about what we do as a company, about customer service. I hope there’s hope.
Be customer-centric: the start…the beginning, the middle of everything and the end!
Customer-centricity is the future of e-commerce! Becoming a truly customer-centric organization takes time, but you can start off small, by following these four steps:
? Truly believe that your customers come first. Some businesses pretend they care about their customers, but they don’t really. Marketers inside customer-centric organizations understand what customers want, and use customer data to capture customer insights.
? Try to understand your customers as well as you can and develop products and services around their wants or needs.
? Focus on building relationships with your clients.
? Plan and implement a carefully formulated customer strategy that focuses on creating and keeping a profitable and loyal customer.
So, there you have it – the most important thing you should focus on if you want to grow your e-commerce business. Now, be honest, how much do you care about your customers? Please leave your answers in the comments section below.
We had the pleasure to meet Karl Gilis during GPeC (Gala Premiilor eCommerce – E-commerce Awards Gala) in Bucharest, Romania. GPeC is known as the most important E-Commerce Event in Romania and South-Eastern Europe, bringing together the best international experts in the field. Their objective is to become the place where you can find everything about e-commerce and digital marketing.
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