Those lucky enough to attend last year’s Performance Marketing Insights: London may have seen Virgin Group’s former global head of online marketing Alex Hunter talk at length about how good businesses resonate with their customers.
Many cited Hunter’s keynote as the highlight of an event packed with business lessons, as the marketing head turned investor lit-up the PMI stage with a highly thought-provoking session.
Keen to elaborate on some of the points raised in the presentation and his past experiences, Alex touched base with PerformanceIN after October’s event.
Your talk at PMI: London stressed the need for companies to build loyalty through ‘the little things’. But whose remit should this fall under – customer service or marketing?
Alex Hunter: Neither. Or both. It has to be something that the entire organisation embraces and it should be driven aggressively from the top. Customer experience can’t be farmed out to a single organisation when it is, by definition, the raison d’etre for a company. The mission and values of an organisation have to be crystal clear to every single member of the team, embraced universally and manifested in everything they do. I won’t pretend that’s easy but that’s why it’s so important to set a simple, realistic company mission and be able to refer back to that mission frequently.
It’s also important that there’s a clear way to capture “the little things” and spread them through the companies. Great ideas don’t just come from the CEO; they’re more likely to come from someone on the front line, so make sure you’re listening.
You also talked about brands that build loyalty by harnessing the power of their communities. Do you find that smaller companies tend to do this better? If so, why?
AH: Generally, yes, smaller companies tend to emphasise community more than larger companies but not for the reasons you might think. In a lot of start-ups, resources – both financial and human – are limited, so it’s important that every dollar is spent wisely.
Community is an extremely efficient investment for any organisation because it creates loyalty, opens up feedback channels, makes a company feel more human and approachable, but it’s particularly efficient for smaller companies because it costs very little to do and almost always pays off. So it’s not that smaller companies have figured out the power of community ahead of larger companies, it’s more that their hand has been forced into channels that are lower cost, and community is the first port of call in those situations.
This forms part of something you cited at PMI – the ‘loyalty loop’. During this process, what do you think encourages consumers to come back to a brand again and again?
AH: First and foremost, the product has to work. It has to live up to the promotional promises you made when pitching the consumer. If your product is bad, stop marketing and go fix the issues – you can’t build loyalty on a mediocre product. But beyond that, people go back to brands that make them feel wanted; that they trust; that they can rely on. So even if the product is great, if the customer service is lousy when the product breaks then I’m unlikely to return to that brand in the future.
So looking at the entire consumer lifetime, and investing in that instead of milking each transaction for every last penny, often pays off in the long run in the form of repeat custom.
You were involved heavily in the promotion of Virgin America as it tried to gain approval from Congress. What did the experience teach you?
AH: That people will rally around something they believe in – even an airline. We ran into a lot of bureaucratic delays in the start-up process but we knew we had a great product so when we finally unveiled it to the public we said: “This is what we’ve spent the last decade building. Pretty great, right? Well, we need your help, otherwise it will never see the light of day.” And people reacted in a way that I’ve never seen before.
75,000 people signed a petition, just as many contacted their local and national politicians to tell them how excited they were about Virgin America. And here we are; eight years later and Virgin America has just completed its IPO.
You made the move from marketing Virgin to helping new companies evolve. Although the scale differs widely, do you adopt the same strategy principles regardless of scale?
AH: Sadly there’s no “one size fits all” solution these days – each company has a different set of problems and challenges and opportunities. That said, I think the basic principles of being approachable, being human, democratising content creation, and being transparent transcend all organisations regardless of size or industry.
Finally, as a man who splits his time between the UK and Northern California, how close is London to producing a tech start-up community like Silicon Valley? What could London be doing more of?
AH: I don’t think “being like the Silicon Valley” is a healthy measurement of success for a tech community, burgeoning or mature. The Silicon Valley has just as many problems as it has successes, not least of which is the ludicrously inflated values that so many of these companies are assigning themselves.
The London tech scene is strong, independent, and in many areas, world-leading. With the combination of home-grown tech talent, government backing, and good ol’ British pragmatism, the London tech community is consistently producing robust businesses that are second to none anywhere in the world, including the Silicon Valley.
Keep an eye on PerformanceIN for video footage from Alex’s keynote and much more from PMI: London 2014.