Think about the times you’ve returned to your favorite restaurant or bought from an online shop. Why is it that we tend to revisit certain brands? What do they do that earns our loyalty? And how can we use those lessons and apply them to our businesses?
This guide is not about how to attract customers, although we’ve covered this in previous posts. Instead, we want to focus on encouraging repeat business, turning first-time buyers into long-time customers, and cultivating a meaningful relationship with your audience.
But before we delve into any of that, we have to understand the basics of tracking customer retention.
Customer success KPIs
Every business needs a way to measure their efforts. Without key performance indicators (KPI), leaders cannot determine whether their efforts and resources are being put to good use. It’s like navigating a dense forest without a map or compass—it becomes impossible to know where you’re going or how far you have to go.
But what about customer service? How can you measure something so subjective?
For SaaS (Software as a Service) companies, the churn rate is among the most important statistics to track. Churn rate is defined as the percentage of customers or subscribers who either cancel or do not renew their subscriptions within a specific period. If a company is witnessing a high churn rate, that means they are having major issues with customer retention.
Another popular metric is the Net Promoter or Net Promoter Score (NPS), adopted by more than two-thirds of the Fortune 1000. This tool measures brand loyalty and a customer’s willingness to recommend the company’s products and services to others. An NPS score ranges from -100 (detractors, or those with negative remarks about a brand) to +100 (promoters, someone that actively recommends the brand). Despite its overall popularity, NPS has become controversial and is often criticized as inaccurate and inconclusive.
From a more financial standpoint, expansion revenue, also known as Expansion MRR, measures how much revenue comes from existing customers. The higher the expansion MRR, the happier and more loyal customers are. Businesses with higher expansion MRR than new customer MRR would benefit from reinvesting their resources back into upselling, cross-selling, or offering add-ons to existing customer purchases.
To calculate expansion MRR, use the following equation:
Expansion MRR % = (new revenue from upsells and cross-sells in a month) ÷ (revenue you had at the end of the previous month)
The final and most common metric is CSAT, or simply known as customer satisfaction. Since satisfaction varies from person to person, so too does the way brands measure it. For many, customer satisfaction surveys are the most efficient and effective way, with questions such as “How would you rate your overall satisfaction with (our product or service)?” followed by a rating of 1-5, or 1-10.
Either way, every customer retention strategy begins with a few metrics that help you gauge overall progress. Spend ample time in deciding which metrics make the most sense for your industry, your business, and your products and services.
Customer loyalty programs
With your customer loyalty metrics in place, the next step is to start carving out the programs that encourage and incentivize repeat engagement from customers. This can be a grand undertaking, encompassing customer service, loyalty/rewards programs, social media outreach, and much more. But the overall benefits cannot be understated:
– Greater customer retention – “It is 16 times as costly to build a long-term business relationship with a new customer than simply to cultivate the loyalty of an existing customer.” (Annex Cloud)
– More frequent customer referrals – “83% of customers are willing to refer after a positive shopping experience.” (Extole)
– Positive customer reviews – “90% of customers who feel high levels of trust and loyalty are significantly more likely to share ratings” (InMoment)
Customer loyalty starts with listening to your customer’s needs and wants. One important method of doing so is to build a multi-channel customer service system. With this system in place, customers have more options and flexibility in choosing how they interact with your team. For example, if a product they purchased was found to be faulty, they can email, call, or bring it into a local store.
Other brands are finding ways to gamify engagement to incentivize customers. Credit card and foodservice companies use programs to reward customers that repeatedly purchase from their brand. Even learning services such as Khan Academy and Duolingo are finding ways to make learning more addicting with the introduction of achievements and leveling systems.
We could run through thousands of examples of building customer loyalty. But every loyalty program has a single unifying goal: genuine customer delight. That requires going above and beyond their expectations, beyond the first purchase or subscription. How can you continue to add value to your customer experience?
These days a B2C brand cannot survive without having a presence on social media, and they cannot thrive without providing real value through their platforms. So how can one add value on a platform like Facebook or Twitter?
Brands have also found success in providing customer service through social media. Companies like Seamless are taking advantage of Twitter’s reach and sense of immediacy by using it as a customer service channel. The foodservice brand delivers 24/7 support to anybody that tags their handle in both the United States and the United Kingdom. These days it is not uncommon for companies to spend thousands of dollars on social media listening tools—apps that allow companies to keep track of what customers say about their brand.
Another major tactic involves the use of video marketing. Live streaming has become a popular way to engage with users through video, as it gives a feeling of actually “being there.” For example, BIRCHBOX, a monthly makeup subscription box, collaborated with Benefit Cosmetics to demonstrate a new kind of Mascara through Facebook Live video. The live stream was viewed over 18,000 times. Similarly, Instagram Stories are a relatively new method for brands to pop up at the top of the app. Airbnb hosted a Travel Tuesday series which uses both professional photographs and user-generated content from Instagram, and paired them with simple questions like “Where are we?!”, along with a few options for engaging. To find out the answer, users had to swipe up, leading them to the company website!
Customer relationship management system (CRMs)
We’ve spoken about customer-facing solutions for retention, but what about solutions that benefit your team? CRM software can make the difference between an organized and disorganized company.
For one, a reliable CRM can give off warning signs of customer churn. Mailchimp, for instance, will show you the percentages of people that unsubscribe from your newsletter each month. This can be vital information in determining whether your email marketing is considered valuable or not.
Target profitable customers
Tools like Salesforce allow you to track each user’s interactions and transactions with your brand. Using this data, you can determine which of your customers are the most loyal and have spent the most money. This, in turn, allows your brand to focus on investing outreach towards the most dedicated customers.
Finally, CRM can help with the personalization of a customer journey. A great CRM will be able to break down your customer journey into a series of steps, and then analyze your customer’s purchase decisions along the way. Over time, you will collect enough information that will allow you to create A/B tests or small experiments that help ascertain each of your customers’ personal preferences. From there, you can start to tailor your customer journey to specific niches within your audiences, ultimately creating a more visceral connection with your customer.
Even in 2020, blogs remain a vital part of content strategy. They help to create awareness, inform, educate, share customer stories, and boost SEO efforts. Blogs remain an indispensable aspect of the customer journey. No matter which phase of the journey your customer is in, blogs can attract and convert without the need for advertising.
The more a company can demonstrate their knowledge and expertise on a specific topic, the more audiences (and search engines) will view their content as reputable and trustworthy. For example, Zillow Porchlight is the company blog, and it features various tips, guides, and resources on buying, selling, and enhancing your home. Evernote publishes articles centered around productivity, remote work, and writing.
To truly start seeing conversions and engagement from your blogs, make sure to include a relevant call to action (CTA) in some of your posts. Something as simple as “follow us on social media” or “purchase today” can help initiate further customer engagement from a single post. In Grubhub’s blog, 5 Tips and Tricks for Family Meal Planning, they sprinkle in a few links that lead to searches for vegan, pizza, and steak meals. On the right, there’s another call to action to get more deals and recommendations by signing up for a newsletter. From a single post, they’ve found ways to gently nudge the customer further along their journey.
We’ve only listed a handful of customer retention strategies, and there are bound to be countless more. But these represent some of the most effective and most relevant strategies in 2020. How will you use these concepts and tailor them to your own business and brand? How can you provide value to your most loyal customers?
How many times have you heard a company brag about providing value to customers? And how many followed through?
Customer service is more important now than ever before. As industries become saturated with competition, genuine customer service and relationships are what will separate great companies from the rest of the pack.
Read our guide below to learn more about the most important customer-centric business concepts and examples from real-life brands.
Ask any leader about how to build a great brand, and they’ll tell you about the importance of customer empathy. All the research, analyses, and expert opinions in the world mean nothing if a company lacks a basic understanding and respect for the customer.
The data cannot be ignored. Companies that prioritize customer empathy have repeatedly been shown to perform better and deliver better experiences. In HBR’s study of 170 brands, the top 10 most empathetic companies “increased in value more than twice as much as the bottom 10, and generated 50% more earnings (defined by market capitalization).”
So how can a company become more empathetic? It starts by genuinely listening to what your customers are saying and how they behave. Here are a few examples of customer empathy:
Companies tend to think about their customers as one giant mass. But each customer is unique in their own way. Segmentation allows companies to think more accurately about their customers by organizing them according to certain traits: age, location, income level, and so on.
A customer persona is a representative sample of this segmented audience—complete with hypothetical name, location, age, desires, pain points, and more. Check out this post from Brafton to see a few examples of effective customer personas.
An alternative to the customer persona is an empathy map. This model focuses more on the feelings and sensations of a customer—what do they see, hear, say, and do? What do they worry about? What excites them? Filling out this empathy map can help businesses better understand the disposition and mindset of their customers.
Using a tool like Google Analytics, you can now see the actions taken by customers online. This is invaluable data that provides actionable insights on how your customers discover, learn, and use your product or service. Put simply: data helps you trace a customer’s journey through your brand experience.
By understanding the frustrations and discoveries within your customers’ journeys, your team can learn more about which specific product aspects to focus on.
Despite the importance of customer empathy, only a handful of companies will ingrain the value into their employee training. Those that do, however, tend to find richer and longer-lasting relationships with their customers. For those who don’t, empathy becomes just another word on the company website.
Early during development, every person on the team should be able to understand the total value the brand can provide to customers, otherwise known as the customer value proposition. Is it faster delivery? High-quality customer service? Or simply top of the line craftsmanship?
To gauge your team’s cohesion and understanding of the customer value proposition, consider sending out a few employee surveys. Ask them about the company’s goals and vision, and the desires and pain points of customers. Ask about the value the brand offers that the customer can’t find anywhere else.
The answers could be startling. C-level executives might fail to answer the most basic questions, while developers or customer-facing employees may question their overall role within the grander scheme of things. This is the first step in understanding your company’s present situation with customer orientation. Because whatever trait, feature, or quality it may be, you need to have total executive and employee buy-in.
Customer orientation examples
Hotels are prime examples of how training can make all the difference in customer engagement. At the Ritz-Carlton, leaders and new employees are trained on what the company calls “The Gold Standards.” This means creating unforgettable experiences and defining moments during a guest’s stay.
Even after orientation, employees are reminded of their training each day. Every 90 days, there is a test to see how they perform on service scores. This level of service is what has garnered the Ritz-Carlton Hotel Company as being one of the most luxurious brands in the world.
Listen closely to what your customer has to say, and they’ll tell you everything you need to know about how to improve your product. They won’t tell you what to do or build, but they’ll tell you how it can be better. Remain open and respond to customer feedback.
In the tech industry, developers and designers refer to the customer’s beliefs and behaviors as the voice of the customer (VOC). The concept covers everything the customer wants and needs out of the product, then organizes it based on importance. For example, in testing an app for food delivery, the most important need may be to be able to see the different restaurants on the app and place an order, while additional features such as transitions and sound effects may be considered stretch goals.
In today’s online world, customer insight tools can be found almost anywhere. For web development, Google Analytics can show you the actions users are taking in finding and using your website. Facebook, Instagram, Twitter, and LinkedIn all offer similar analytics for user engagement. Brands that spend the time to look through this data can find startling new ways of providing value to customers.
Customer insight examples
Brands today need not only cater to customers but to engage with them on a personal level. That’s exactly what make-up brand, Glossier does through its social media. More than just a platform for advertising, Glossier’s social media demonstrates the importance of building a community.
Founder, Emily Weiss had previously written a blog, Into the Gloss, while she worked at Vogue and before starting her makeup brand. “As I interviewed hundreds of women,” Weiss said, “I became more and more aware of how flawed the traditional beauty paradigm is. It has historically been an industry based on experts telling you, the customer, what you should or shouldn’t be using on your face.”
That same investigative spirit has carried Glossier forward—Weiss continues to interview hundreds of customers and feature their stories, beauty routines, and even customer reviews on their social media. Glossier’s Instagram account has nearly 3 million followers, and the company is valued at $1.2 billion.
What customers say does not always align with what customers do. In reality, you won’t learn much about the customer’s behavior unless you interact with them directly.
For example, product developers may have assumptions about how customers will end up using a product. Still, all assumptions could be shattered once they see the product being used in-person. That’s why retailers like Target, Best Buy, and Apple typically have sales representatives standing in the electronics department—to both observe how customers engage with the devices and to assist customers with questions.
Because of this discrepancy between the designer’s intentions and the user’s actual behavior, there is a potential for products to fail, break, or be misused. This is where the concept of feedback loops come into play.
In its most basic concept, the feedback loop is a way to provide users with real-time information (feedback) after they take a specific action. With enough feedback for positive actions, you can encourage behaviors and discourage undesired actions.
Customer interaction examples
T-mobile has demonstrated to other brands how to engage their customers through social media. A 2012 study found that the brand responded to 86% of the questions it received on social media, which was well over 2,500 over three months. Besides customer support, T-Mobile used social media to find new employees.
T-Mobile’s approach to social media also had a more personal touch than other large corporations. Whenever a member of the team responded to a question, they signed their replies with their real names, indicating a true human interaction and not a bot. These interactions are what make T-Mobile one of the most reputable telecommunication companies.
It’s easy to believe that the customer journey ends upon the purchase of a product, but the engagement continues long after, years even. Maintaining that relationship with the customer is essential to building a brand and audience.
What are the best practices for customer service?
1. Respond promptly – Customers don’t like waiting around for a response. Even if all they hear back is a simple response, customers appreciate an acknowledgment.
2. Personalization – No one enjoys an automated response. What matters is when we feel that we are speaking to a real person.
3. Offer a solution – All the excuses in the world won’t matter if your brand can’t find a way to rectify an issue. Whether it’s a legitimate fix or a credit towards their next purchase, customers want to know what you will do to help them out.
4. Go the extra mile – While most businesses will do the bare minimum to keep their customers happy, the ones that do the extra work to make a customer happy will keep them for life.
Customer service examples
Warby Parker has a famous example of customer service. During one train ride, a client had accidentally left their pair of Warby Parker glasses behind. By sheer luck, Warby Parker Senior Executive Anjali Kumar happened to find them. Kumar reached out to the client and sent them two pairs of the same reading glasses, a copy of “On the Road” by Jack Kerouac, and a personalized note.
The story became a hit and remains a classic example of how to go above and beyond a simple act like returning a pair of glasses. Not only did Warby Parker earn a customer for life, but they cultivated a following unlike before on social media.
The customer should be at the forefront of every single business action. If nobody buys your product, your business is doomed to fail. Through careful training, research, and meaningful interactions, a customer can go from a simple buyer to a loyal brand advocate. It all starts with treating the customer as a human being, with desires and pains just like anyone else.
Few exchanges cause more anxiety than confrontation in the workplace. Scarier still is navigating such situations when it’s your toxic boss who needs confronting. A myriad of questions arise: Will I be supported if I confront my superior? How will they react? Will I lose my job? Is it even that bad? Is my boss really “toxic”? According to studies, three out of every ten leaders are, in fact, toxic, making these insatiable leaders rampant among the workplace.
Still, even with such a staggering percentage, how do you know if your boss is actually “toxic,” rather than just a bad fit for your particular work style? Let us explore the problems of toxic leadership, how one can identify it, and take action in the workplace.
The problem with this style of leadership is the environment it creates. It breeds instability, corrupts creativity, and undermines free will.
What is the toxic triangle?
The “toxic triangle” is a term used by researchers to define the perfect storm of toxicity in the workplace. It is composed of three main factors:
– Toxic leaders: managers or executives with autocratic, narcissistic, and otherwise manipulative tendencies
– Susceptible followers: includes conformers (crave direction) and colluders (crave power).
– Conducive environment: a culture with questionable values, standards, and safeguards.
For a company to protect its people, it must keep in mind these three factors of toxicity.
Main characteristics of toxic leadership
What specific characteristics does a toxic leader have? Below is a “toxic leader checklist” that will help you identify when you see one. Keep in mind, this list is not extensive, and every toxic leader won’t necessarily display every one of these characteristics. Still, these five are particularly pervasive and should be on your radar.
Absolute power. Toxic leaders desire and feel they deserve, autocracy over their organizations. They are at the top of the heap, and everyone else is far below them. This hierarchy exists to ensure these leaders have their hands in everything so they can control every aspect of the organization’s processes. After all, in their minds, they are the ones that seek dominance over prestige.
No feedback cycle. Due to their narcissistic attitudes, toxic leaders have an inability to get or give constructive feedback. They are unable to see their faults because they feel they do everything right. As a result, they cannot see their employees clearly either. There is no feedback, only punishment for not following their strict instructions.
Incompetent. Again due to their inflated egos, toxic leaders don’t typically take the time to learn all the skills required to do their job well. They fail to recognize problems and lack the flexibility needed to solve them (which ironically diminishes authority on their part).
Ambiguous instructions coupled with unrealistic expectations. Toxic leaders set their employees up for failure. Unsurprisingly, their grandiose ideas of self also apply to their own capabilities and that of their organization. Due to their lack of real skill, they cannot set clear goals for their employees and often end up over-promising and under-delivering.
Hierarchical in nature. Toxic leaders create an environment of unhealthy competition. They will pit employees against each other and create an inner circle of “true followers.” This hierarchy serves to keep team members “in line,” so everyone knows their place. Usually, within these ranks, toxic leaders single out a scapegoat. Someone disposable but important enough to take the fall when a bad leader’s incompetence catches up to them.
Examples of toxic leadership at the workplace
These characteristics were uncovered in some army generals through a study done by David Matsuda. In attempting to understand the rate at which soldiers were committing suicide, a general invited Professor Matsuda to aide in his investigation. Matsuda discovered that many of the soldiers were under the tyranny of toxic leaders who were intimidating and unfairly punishing them.
Once the investigation started, it was estimated that some 20% of soldiers were reporting to toxic leaders. According to research, the reason this leadership style is so prevalent in the army is because “performance is evaluated in a top-down fashion.” This means soldiers could not assess their superiors, and thus, these toxic leaders were allowed to continue their abusive behavior without being held accountable. The army has taken drastic actions to ensure this problem doesn’t persist. But it is an example of how dangerous it can be when leaders have no accountability to the people they are leading.
Almost immediately, he began verbally abusing his subordinates. He missed deadlines and was utterly incompetent in his role as CEO. Eventually, his lies caught up to him, but not before he drove the company to financial bankruptcy. Dunlap’s greedy grasp for power and his distorted perception of his capabilities made him a toxic leader. But Sunbeam’s vulnerable state and lack of company culture made them prime pickings for a dictator like Dunlap.
Few stories in recent history have had quite the impact as that of ridesharing service, Uber, and its maligned leadership. In February 2017, software engineer Susan Fowler wrote a 3,000-word blog post detailing her year at Uber: in which a manager had sexually harassed her. Still, Uber’s HR department had refused to take any action, even after receiving similar reports from multiple women.
Fowler’s story sparked a major debate about sexism, harassment, and the unjust use of power in Silicon Valley. Her post was shared over 22,000 times on Twitter, led to multiple contract terminations, and precipitated the resignation of CEO Travis Kalanick. Since her departure at Uber, Fowler has worked as editor-in-chief for Stripe’s quarterly publication, Increment, and now writes as technology opinion editor for The New York Times.
How to deal with toxic leadership
If reading this is setting off alarm bells, you might be working for a toxic leader. After combing through all the characteristics and examples, one might feel anxious about confronting someone so menacing. Yet, according to Lipman-Blueman, the best way to approach a toxic leader is simply to do it. “Confront the fear and worry of challenging a toxic leader. Exercising courage will make you stronger,” she says.
One of the major elements that allow these types of leaders to gain more power is silence, neutrality, and compliance from employees. Breaking this destructive cycle forces bad leadership to be confronted with their ineptitude while simultaneously alerting their superiors of the problem. To ensure a more open and safe environment for everyone, it is vital to exhibit total honesty and courage when providing feedback on abusive work cultures.
Redefine company culture
It is also essential to ensure that once a toxic leader is gone, a revision of the corporate structure that produced such a leader takes place. If company culture lacks a sense of self-awareness, you’re bound to end up under the thumb of another toxic leader. A healthy work environment can only thrive if leadership “nurtures and grows the physiological, psychosocial, and spiritual well-being of its organizational members.” If employees’ welfare isn’t taken seriously, any change in bad leadership will only be temporary.
Set realistic expectations
A huge component in shifting company culture is redefining success. While it is important to set and accomplish goals, how they are achieved is crucial. Toxic leaders will realize goals by any means necessary, even at the expense of their employees’ health. Good leaders will set realistic goals and expectations and will never ask employees to sacrifice their physical or mental well-being to meet deadlines.
Lead with integrity
To actualize a well-defined company culture, it is imperative to promote leaders who are optimistic yet realistic. A healthy leader will inspire their employees, not intimidate them. They will create an environment that thrives on effective feedback and will be open to hearing how they can improve. Good leaders recognize they can’t do it all and will be willing to delegate tasks. All employees will be treated equally because leaders with integrity don’t play favorites.
Within this type of environment, studies show employees work harder and are happier to come in every day. When support starts at the top and is felt throughout, it motivates everyone to do their best. And with that support comes a kind of creativity that only happens when one is truly free.
Company culture doesn’t always get the attention as other areas of the business, but it’s just as important because it influences almost every discipline from operations to sales.
But what makes up the culture of a company?
In its essence, company culture refers to the shared set of values and ideals within an organization. It’s what brings character and personality to a brand name.
It can be influenced by:
Team members – what are their shared values and ideals? A culture is created by the people.
Mission statement – what is the organization’s collective goal?
Values and ethics – what is considered important or pointless? Acceptable or unacceptable? Right or wrong?
Environment – where does the company work? How do space and amenities affect people’s behavior and mindset?
Why is the culture of a company important?
Organizations in any industry experience change every day. The one constant is the company’s culture- the highest standard expected of each individual, and the values that glue everyone together. Company culture is more than a collection of words, its a collection of ideals.
Culture pervades every aspect of professional life, even though it’s not always apparent. For example, if an employee has a birthday, the way that the rest of the team treats that individual can represent the company’s culture. Similarly, if the team is hostile to one another, that may come out in customer interactions.
Whether it’s a simple interaction or a major initiative, culture plays an important role in unifying and directing people.
So how do you describe the culture of your business or the culture of the workplace? That might not be easy questions to answer, so we’ll cover a few steps on how to refine your culture messaging.
Brainstorm your brand’s top core values
Gather the key stakeholders of the brand in a room and come up with the top 20 values of the brand. Then narrow them to 10. And then again to five, until you have three left. While the others are still important, focusing on three main values will be easier to embed in the brand’s identity.
Start with the team
Find people that aren’t just qualified, but exemplify the brand’s core values. In most cases, you can train the individual to become proficient with a certain program or process, but you can’t train them to follow core values. During the interview process, picture how that person might behave with the team or under pressure. Would you still hire them?
The best way to learn about the top values of your company is not just to ask, but to observe. Watch your team at work or at events and try to find the best aspects of their personality. Chances are these personalities and traits are what influence your current culture.
Listen to feedback
And not just to your team, but to your customers and partners as well. Read the reviews (as hard as that may be) on Google or Amazon, or whatever website your business may be rated on. What do others say about how your team’s interactions? Criticism can be difficult but can also be opportunities for change.
Measure, Evaluate, Revisit
It’s not enough to write down the values, you have to actually uphold them! Set milestones to check in with your team and see how closely the values are being followed. Send out anonymous surveys to get real opinions on how well the values are implemented, and how they might be improved. Use that feedback to build upon the values you created.
10 Attributes to Assess Your Company Culture
Communication – The interactions between your team is in itself an example of the company culture in effect. Observing how your team discusses both professional and personal matters can give you a better sense of how the culture is implemented. If the culture is creative, collaborative, and upbeat, chances are that interactions at work will reflect those values.
Feedback – Praise is all well and good, but if you really want to measure a culture’s efficacy, you must stay cognizant of how the company handles even the most critical feedback. Companies with well-realized cultures understand how to respond and act on criticism while staying consistent with the brand’s voice and personality.
Goals – Culture is as much about setting objectives and creating plans of action as it is about how people interact. Some cultures place high importance on excellence and prestige, while others are about moving fast and innovating.
Purpose – Organizational culture is heavily rooted in meaning. Without it, the company’s employees would not have a reason to come in each day, let alone stay long term. A good way to test whether your company’s purpose is clearly conveyed is to ask every person on the team what they believe the purpose is, and how they interpret it. Depending on the responses, you may have to fine-tune the language to ensure it is clear as it is inspiring.
Decision Making – Culture can also dictate the best course of action to take when faced with a certain dilemma. Nordstrom, the luxury department store chain, defines their philosophy in a simple way: “Use your own initiative to provide customers with exceptional levels of service. You’ll never be criticized for doing too much for a customer, only for doing too little.” While other brands force adherence to a rigid process, Nordstrom employees are encouraged to be their selves, as long as it benefits the customer in some way.
Responsibility – Everybody should be accountable for something within an organization. To understand why, look no further than Apple’s example. For any project or initiative, there is a DRI (Directly Responsible Individual). Whenever there is an issue, a bottleneck, or a general question, the DRI is the person to seek out. The DRI ensures everything stays efficient and that communication stays as clear as possible.
Teamwork – Collaboration is often the key to a happier and more successful time in the workplace. You would be hard pressed to find a culture that doesn’t involve teamwork and collaboration somehow in their values. How well does your team mesh together? What is their chemistry like? How can you encourage them to work together even more?
Trust – Teamwork, communication, and respect… none of these values would even be possible without first having a shred of trust for your coworker or leader. How much does your team believe in the strengths of one another? Trust forms the foundation for any social interaction, especially in the workplace.
Adaptability – Cultures that are set in stone do not age well. The world today is very different than it was ten years ago, twenty years ago, and it’s vital that a company culture is continually revisited to be relevant to the times. Your company culture should have an open mindset, open to change and new developments, if it truly wants to stay competitive.
20 words to describe company culture
Below are a few words used by companies to describe their culture in a positive light:
A Higher Standard
Company culture and values act as the north star for a business, guiding the team during tough times. It’s easy to shrug off company values as a low priority item, but doing so only leads to further ignorance and conflicts in the workplace.
Take the time to make the company culture a priority. The lasting effects of a well planned, fairly enforced value system can cause ripples beyond the business and beyond the workplace.
Over the past few weeks, we’ve covered how growth hacking can help startups scale rapidly. We’ve also covered several strategies in use by various entrepreneurs, from Instagram Influencers to gamified platforms.
Today, we want to showcase some of the success stories. And we’ll present the real cases where growth hacking has impacted a company’s bottom line.
Growth Hacking Examples to Inspire Your Own Business
“Google tracks you. We don’t.” DuckDuckGo used this single quote when they launched their campaign against the king of search engines. They were throwing down the gauntlet as a means to differentiate themselves. While Google collects data on online searches, DuckDuckGo would be built on the promise of privacy. Theirs ensured that searches were completely anonymous, which was a unique value proposition.
The campaign resonated. In 2019 alone, DuckDuckGo broke 10 billion searches for the year – a major milestone. On average, the search engine sees 46,303,892 searches each day. DuckDuckGo was able to carve out a niche for itself, though it has only ten years of experience (compared to Google’s 21). And it continues to grow even bigger.
What can explain this massive growth? You guessed it, growth hacking. Founder Gabriel Weinberg attributes DuckDuckGo’s rise in popularity to certain channels of growth and something he calls the “Bullseye Framework”.
Each of these channels can help companies acquire more customers. But this is not a checklist. Nor should each of them be implemented concurrently as the pathway to growth. Such an effort would be a waste of time and money.
Instead, Weinberg advocates using the Bullseye Framework to narrow it down to just one channel. The “bullseye” in the model is the channel that will give your business traction to grow to the next phase.
The Bullseye Framework is comprised of three parts:
The Outer Ring: What’s Possible – Step one, brainstorm every single channel that is a viable opportunity for your company. Do not dismiss any channel. This step will help you overcome channel biases and generate fresh marketing ideas.
The Middle Ring: What’s Probable – Next, put your theories to a test. Experiment with the channel ideas that are most likely to bring value to your company. Results should yield measurable improvements. For example, specific channels might motivate higher sales of your product.
Make the best use of your time by experimenting with multiple channels during this phase. By the end of the experiment, you should know how much your channel will cost, how many customers you can attract, and whether they’re the ideal customer for your brand.
The Bullseye: What’s Working – Testing should run around one month to determine the best performing channel. Focus only on viral marketing If you found that viral marketing was the most effective channel. Do not even consider implementing the second and third best channels. They will only distract your efforts. Ideally, the bullseye channel should be the only one employed until it is no longer effective or sustainable.
When DuckDuckGo started, it was focused only on SEO. But this focus led to efforts that helped them rank for keywords like “search engine”. Soon enough, the platform generated 10,000 visitors.
Recently, the company has shifted its’ focus back to existing platforms. Their efforts include initiatives to get DuckDuckGo installed first on Apple Safari, then on Mozilla Firefox. DuckDuckGo also formed a strategic partnership with Apple Maps for local searches earlier this year.
DuckDuckGo continues to grow because of its willingness to experiment while keeping sight of its unique value proposition: valuing customer privacy. To this day, DuckDuckGo does not store, sell, or share your personal information.
Airbnb was the market disruptor that overtook the hospitality industry. They gained bookings that would normally be gobbled up by the world’s top hotels. So It’s hard to believe that this international phenomenon was started by three roommates, an air mattress and a website.
Early on, the founders came up with a unique plan to raise money. They bought hundreds of boxes of Cheerios and Captain Crunch leading up to the 2008 presidential election. The boxes of cereal were turned into “Obama O’s” and “Captain McCain’s.” with a little photoshop magic and a hot glue gun.
Each box of cereal cost $40. CEO Brian Chesky estimated that 1000 boxes were sold, which earned enough money to keep the company in operations. The stunt was also highlighted on national television and created buzz around their brand. Soon after, the company was accepted into Y Combinator, a Silicon Valley startup accelerator program.
But Airbnb came to be known for yet another initiative in 2010, dubbed the “Craigslist platform hack”. With just a small user base, Airbnb knew it had to find a way to reach more people quickly. So Airbnb began to post listings on Craigslist as well.
The company used bots to automate listings on Craigslist. By featuring higher-quality photos and more detailed descriptions, Airbnb converted more users than the Craigslist listings. Over time, Craigslist users migrated to Airbnb entirely, preferring their platform and listings.
Could it be considered spam? Likely. But was it effective? Absolutely. Due to their unconventional methods, Airbnb has grown to a valuation worth over $31 billion over the past 11 years. The company has now come a long way from using the Craigslist hack to build a user base or crafting political cereal boxes.
Dropbox was one of the first companies to set the standard for cloud storage. Other companies restricted storage behind expensive tiers of subscription memberships. But Dropbox offered every user 2GB free under a freemium plan. Once users joined, Dropbox rewarded users with additional storage for promoting the service or engaging more deeply with the company.
Refer your friends, family, and coworkers (sharing folders doesn’t count)
Contribute to the Dropbox Community forum
The Dropbox Getting Started Checklist
New users are encouraged to immerse themselves in Dropbox’s service, teased with the possibility of earning extra space for each completed task. Tasks range from taking a tour to installing Dropbox on other devices.
These tasks are simple to accomplish. But if users need any support, they can simply hover over the item for immediate instructions. Even though the additional storage is only 250 MB, the checkmarks and list smartly encourage users to take part in these simple challenges.
Referring friends and family
Want to earn more space? Better start inviting other people! For every referral, you can earn an additional 500 MB, capped at 16 GB. Users with the Dropbox Plus or Professional accounts can receive 1GB per referral, and earn up to 32GB total.
There is a verification process in place to ensure that referred users do not abuse the system. They must open up a referral email, accept the invitation, install the Dropbox app, sign in, and verify their email address. However, the process is intentionally user-friendly to ensure that more users make it through to the end.
With an easy sign up/onboarding process, Dropbox referrals have become an effective way for the company to grow its user base while still providing value to its users.
Contribute to Dropbox community
Storage can be earned by supporting other users in the community. Users can post their questions or issue to a community board, allowing others to respond. Solutions that are utilized will be marked by users. In turn, you are rewarded with a “Mighty Answer” badge, netting you 1GB of additional space.
This technique not only encourages users to build a more social and cooperative community, it incorporates gamification to turn the process into a fun activity.
By giving users a reason to further engage, connect, and advocate the brand, they are effectively doing the marketing for Dropbox. Gamification can also make mundane tasks, such as inviting others to join, a far more enjoyable experience.
Dropbox isn’t the only one to have used a referral system to grow its audience. Back in the early 2000s, PayPal became one of the earliest online startups to incentivize customer referrals. But instead of additional space, PayPal was giving out free money.
Users would receive $20 for signing up. They would receive yet another $20 if they successfully converted one of their friends or family. Within a month of their website launch, PayPal had amassed 100,000 customers.
As the number of referrals increased, PayPal decreased the incentive to $10, then to $5. It was then limited to payment merchants, before being removed altogether. But PayPal grew despite the initial cost. The referral campaign turned out to be far more successful than traditional advertising.
In addition to referrals, PayPal benefitted from partnering with some big companies. Back in 2003, eBay had acquired PayPal for $1.5 billion. This had obvious financial benefits. But it also meant that all of eBay’s users were now using PayPal as their primary transaction platform.
In 2015, the two companies split. But PayPal continued to have a sustained partnership with eBay through mid-2020. eBay still accounted for more than 30% of PayPal’s revenue, and more than 50% of its profits. Today, PayPal is worth $102 billion while eBay is valued at $42 billion.
Founder Wade Foster had a daring idea: what if two products or software applications could “talk” to each other? Enter Zapier, the platform that allows different apps to integrate with one another. Want Google Drive updates on your Slack channel? Done. Or maybe you want Salesforce to update your Trello boards. No problem.
Wade Foster and his friends built the first Zapier prototype in just two days. But it wasn’t as intuitive. Foster had to Skype clients to understand their needs, and then manually hook up the integration himself.
Marketing efforts were also iterated and focused on outreach through company forums. But the traffic that was generated through this methodology was still minimal. What was encouraging however was that conversion rates were high – at 50%.
Zapier caught the attention of the companies hosting the forums as they built their reputation. This was important as it allowed Zapier to leverage partnerships to create link building opportunities. Their SEO began to improve as more brands mentioned their name. “Through this, we got to know the staff at some of these companies early on,” Foster says, “because they were like, ‘hey, that looks like a cool product, can we do anything together?’ And that was the beginning of partnerships for Zapier.”
Zapier gained more authority in the marketplace through SEO. Specifically, they created a new landing page for every possible integration. Hence, Zapier would be the first listed in search results if somebody googled “Groove and Jira integration”. As brand awareness grew, the company sought to expand efforts by outsourcing SEO to remote workers. Their first support hire, Micah, was based in Chicago. (At the time, Zapier had moved to San Francisco after being accepted to Y Combinator.)
Eventually, they would turn to content marketing for their strategy. They began to develop a blog based on apps, tools, and productivity. It took roughly 18 months to find authoritative content and to develop a strong voice for their blog. Today, Zapier’s blog attracts nearly 250,000 monthly readers.
Zapier continues to grow rapidly, without having spent a dime on a television ad or billboard. Sometimes the partnerships you form can be more valuable than the amount of money you have in the bank.
Growth hacking isn’t reserved for large or wealthy companies. Nor is it limited to technology brands. Growth hacking is about thinking outside the box, about finding creative solutions to attracting members. There is no predefined way, not a template for companies to follow, only examples and success stories to take inspiration from. How will your company find novel ways to grow?
Want to learn more about the various growth hacking strategies used by startups? Be sure to read last week’s post.
Good employees are everywhere, but great talent is hard to find. Today’s companies understand that to recruit and retain the best people, their culture must be designed to engage and empower its workforce.
Though executives often state the importance of company culture, it isn’t always carried out. Far too often, core values are not communicated clearly throughout the organization, or they are never put into practice. One Deloitte survey found that only 12% of executives believe their company is driving the right culture. And only 28% of executives understood their organization’s culture.
We hear executives harp on about the importance of culture in the workplace, and it typically has a couple paragraphs in every employee handbook. But why exactly should a company have culture in the first place, and what makes it so important?
Organizational culture, corporate culture, company culture— no matter how you decide to call it, they all define and impact the personality and character of a business.
Usually, company culture is made up of three parts: mission statement, vision statement, and core values.
Mission Statement – This is a short statement that answers the question: “why does your company exist?”
Vision Statement – This statement outlines the organization’s goals for their medium to long-term future.
Core Values – These are the principles that help guide a company’s decision-making and internal interactions.
Keep in mind that some companies may label these elements differently, but they are the building blocks of every company culture. Even if you already have yours defined, it’s important to continually revisit your own mission, vision, and core values. Do they still seem relevant today as when they were first instituted? Are you successfully conveying them to your team?
If not, then this next section is for you.
How to improve company culture
Company culture is so ambiguous, and each company so different, that there is no one way to improve upon it. However, here are a few actionable steps that any company can take to work on its culture.
Hire the right people
This should go without saying, but your company culture is only as effective as the people it hires. Historically, companies have aimed to hire candidates who are “culturally fit.” But today, that phrase has become outdated. Today, “culture fit” is perceived as an example of unconscious bias, an unintentional form of prejudice and groupthink. Put simply, emphasizing “culture fit” only encourages people to think and act the same.
Instead, companies are turning to focus on “culture add”. These individuals still mesh well with the company, but also bring in their own unique perspectives to help make the company more diverse. For example, a remote worker from Poland could help provide an outsider’s perspective on the company’s processes, or a graphic designer could offer useful insights on the company’s marketing material. In choosing between culture add versus culture fit employees, remember how a more diverse company often lead to more creative and original ideas.
Master the art of communication
Never underestimate the importance of strong communication. You may have a company culture that emphasizes hard work, empathy, and other equally important values. But if you fail to convey them to your team, then those values won’t be practiced in actuality. They’ll simply remain as words on a wall.
For example, employees of a recently acquired company often face increased challenges in communication as they attempt to navigate a new company culture. In fact, one 2018 study from Quantum Workplace found that companies that recently underwent a merger or an acquisition saw their employee engagement rate drop by 3%.
Build respect among team members
Trust and respect form the basis of any relationship. Workplace relationships are no different. But trust remains a common issue in the workplace even today. In a Harvard Business Review study of 9,800 full-time workers from 8 different countries, only 46% placed a “great deal of trust” in their employers. The top five reasons for the lack of trust were listed as:
Lack of equal opportunity for pay and promotion
Lack of strong senior leadership
Too much employee turnover
Lack of a collaborative work environment
Encourage team building and social interaction
Your employees spend most of their waking hours at work, so fostering a workplace environment that promotes health and motivation is crucial. One of the most effective ways to do this is by promoting teamwork. Beware, team building can sometimes carry a stigma, especially if it forced or disingenuous. But when it’s delivered right, intentional socialization can really be a game-changer for your employees. Everything from a company-wide retreat to a team lunch for someone’s birthday can instill a greater sense of solidarity among workers.
Growth Culture vs. Performance Culture
Culture comes in various forms, but it can typically be organized into two buckets: growth culture and performance culture. Almost every organization you come across will feature some mixture of each, but how exactly do they differ?
Performance Culture: Success at all costs
Let’s start with performance culture. This type of culture tends to focus on efficiency and results above all else. Employees are generally perceived as cogs in a machine rather than individual humans; as a result, they are often incentivized by fear, money, and the threat of replacement.
The result: workers frequently experience burnout. Popular examples include brands like Amazon and Walmart, where employees are paid on a minimum wage despite being consistently ranked based on output.
Growth Culture: Building Long-Term Success
Alternatively, there’s growth culture. Companies with a growth culture tend to be less black-and-white about work and place a greater emphasis on the commitment to learning. Targets and profits, but they never get in the way of the workforce morale.
Instead, failures and setbacks are taken as lessons. Continuous feedback loops reward hard work. This all leads to a happier workforce, as well as a more innovative company. Brands that adopt growth cultures include Apple. These companies are excellent at creating environments that encourage experimentation, diversity, and camaraderie. “At Apple, we’re not all the same,” their website reads, “And that’s our greatest strength. We draw on the differences in who we are, what we’ve experienced, and how we think.”
Harvard Business Review recently published an excellent article that goes into further depth about building a growth culture over a performance culture.
Examples of Great Company Cultures
Southwest Airlines Co. has a reputation for becoming the world’s largest low-cost carrier, which differentiates them from competitors focused on luxury or international destinations. But not many people are aware that Southwest Airlines is also known for having a world-class culture with a focus on employees and customer service. In fact, they have a whole webpage on their site dedicated to outlining their culture. They have even dubbed their values “the Southwest Way,” which include striving for excellence, being respectful, and delivering memorable experiences.
When asked to describe the Southwest Airlines culture, Tammy Romo, Executive Vice President & Chief Financial Officer of Southwest said this: “Our people and our culture are by far two of our key strengths at Southwest Airlines. We have a very caring culture. It’s the culture this company was founded on with 195 employees in our first year, and one that we work extremely hard today to protect even at 58,000-plus strong.”
The Vision: “To become the World’s Most Loved, Most Flown, and Most Profitable Airline.” The Mission: “…dedication to the highest quality of Customer Service delivered with a sense of warmth, friendliness, individual pride, and Company Spirit.” Values: “Warrior Spirit, Servant’s Heart, Fun-LUVing Attitude, Work Safely, Wow Our Customers, Keep Costs Low”
It’s almost impossible to have a conversation about culture without bringing up Zappos. This popular shoe and clothing retailer was early to the online shoe market back in 1999, but the fun and collaborative culture is what propelled Zappos to grow. Their mantra is simple— if customers are happy, they will come back. All new employees go through the same training, learning the same values that reflect their focus on curiosity and fun.
“At Zappos, we really view culture as our No. 1 priority.” said Tony Hsieh in an interview with the New York Times. “We decided that if we get the culture right, most of the stuff, like building a brand around delivering the very best customer service, will just take care of itself.”
The Vision: “to live and deliver WOW.” The Mission: “We aim to inspire the world by showing it’s possible to simultaneously deliver happiness to customers, employees, vendors, shareholders, and the community in a long-term, sustainable way.” Values: “(1) Deliver WOW Through Service, (2) Embrace and Drive Change, (3) Create Fun and A Little Weirdness, (4) Be Adventurous, Creative, and Open-Minded, (5) Pursue Growth and Learning, (6) Build Open and Honest Relationships with Communication, (7) Build a Positive Team and Family Spirit, (8) Do More With Less, (9) Be Passionate and Determined, (10) Be Humble.”
GitHub has become a household name for Software developers. If you are unfamiliar, GitHub is a Git repository hosting service— a service for hosting and managing software files and code. Just last year, Microsoft purchased the company for $7.5 billion.
However, Github didn’t always have a stellar reputation for its culture. In 2014, after a major sexual harassment scandal, GitHub tapped Nicole Sanchez as GitHub’s VP of social impact to improve diversity and inclusion practices. Since then, the brand has made major strides in creating a safer space for all of its employees.
“Any company that has not explicitly articulated the connection between the thing they’re trying to produce and the need for a diverse group of people, will just miss every single time,” said Sanchez.
The Vision: “GitHub is the best place to share code with friends, co-workers, classmates, and complete strangers.”
The Mission: “…code is about the people writing it. We focus on lowering the barriers of collaboration by building powerful features into our products that make it easier to contribute. The tools we create help individuals and companies, public and private, to write better code, faster.”
Values: “Collaboration, Empathy, Quality, Positive Impact, and Shipping.”
The industry-leading brands mentioned in this article are proof that supporting a strong company is doable. As you’ve seen with the biggest brands, it is a worthy investment to focus on your team. Provide generous benefits, create an inclusive environment, and develop character through training and mentorship. These are the essential building blocks to ensuring that your people love to come into work each day.