The Thank You Economy

by Gary Vaynerchuk

  By the way, tech companies often err in the other direction by forgetting to talk to customers in the “real world.” Companies such as Groupon or Microsoft seem like disembodied, untouchable entities, but they have real-life customers and should try to meet them occasionally. They need to look for ways to bring their customers together, for example, by throwing a party to mark an important anniversary, or hosting a video-streamed town hall meeting where customers can come together to discuss issues they’d like to see resolved. They could even pick up the phone every now and then and speak directly to a customer, just to say hello and make sure there’s nothing more they could be doing to improve the customer experience.

  The companies that understand how to genuinely connect with their customers, online and offline, are the ones that will emerge over the next twenty-four to thirty-six months, putting significant distance between themselves and their competition.

  * * *

  From the beginning, Sorge used social media to reach out and build connections with burger lovers throughout Milwaukee, finding out what they like and what they don’t, and asking them how he can better serve their needs. He pays close attention to Yelp reviews,* expressing thanks for the raves, and for every negative one, apologizing and inviting the disgruntled customer to come back to the restaurant, on the house, to try something else.† More than once that offer has been extended multiple times until the customer is truly satisfied with his or her meal. In some cases, the unhappy customers who have taken advantage of Sorge’s offer to keep coming back until the restaurant “gets it right” have been converted to regular guests who often let Sorge know ahead of time when they’re planning to come in.

  Sorge’s approach to negative reviews reflects his departure from typical business thinking. In his view, mistakes and snafus aren’t something to hide; they’re a great opportunity to get more information on how to do better next time, and to connect with people. When one Friday the restaurant’s main grill was on the fritz and couldn’t be fixed in time for the lunch rush, he set up a live Ustream.com at the front door so that everyone could see what the problem was and what was being done to fix it. He handed out free peanuts and beer. To this day, he meets people who tell him that it was seeing the Ustream video that compelled them to remember AJ Bombers the next time they had a craving for a burger.

  That kind of open communication worked well for the Sorges. For the first six months AJ Bombers was in business, the restaurant was at breakeven. In the restaurant world, where 60 percent of all new establishments close within the first year, that’s not bad. But how to get beyond breakeven?

  Eyes on the Tech Horizon

  Sorge had always communicated with fans via Twitter, sending out hundreds of tweets per day. He ramped up his efforts to bring all of those fans together to share in the AJ Bombers experience. He started hosting events such as a hugely successful Holiday Tweetup, a day of free beer and food at the restaurant in partnership with other local businesses who offered stuff for free. Then, while looking for additional ways to engage his customers, he noticed something about his Twitter followers. A lot of them were starting to use Foursquare, the geo-social networking platform that lets people earn points and “badges” by checking in at favorite locations and sharing their movements with others.

  So:

  He started offering incentives for Foursquare users to visit the restaurant: free peanuts if you checked in, and a free burger to anyone who checked in enough times to become the “mayor” of the joint. That got people in the door on a returning basis.

  He launched a “tips and to-dos” page, where any customer could post messages about what to order, how to get the best deals, and whatever general thoughts they wanted to share. The incentive? A free cookie.

  For what would become the first of many special events, he also created an opportunity for Foursquare users to earn a highly prized Swarm Badge—granted when more than fifty people check in to the same location—by inviting them to a fund-raiser on a Sunday afternoon. A flash mob of 161 Foursquare users descended upon AJ Bombers, kicked up a great time, posted videos, and tweeted furiously about the event, and more than doubled the restaurant’s Sunday sales.

  Sorge talked to his customers and built a community, and in May 2010, he saw firsthand how that effort gets repaid in a Thank You Economy. Sobelman’s, another standout local burger place, reached out to Sorge and asked if they could partner up to convince the Travel Channel’s Food Wars to come to Milwaukee and let them duke it out in a Battle of the Burgers. No problem. Sorge rallied the troops and they bombed Food Wars’ email, Twitter, and Facebook accounts until the Travel Channel agreed to send a crew over to film the episode. Can there be any question of the enormous value of your restaurant being featured on a national television program whose entire audience is foodies?

  Only seven months after figuring out that caring enough to invite dialogue, input, and feedback from patrons would encourage them to feel a sense of ownership over the business, AJ Bombers had doubled—doubled!—their revenue.

  What AJ Bombers Did Right

  They speak their customers’ language. If Joe and Angie Sorge had opened their restaurant ten years ago, they still would have succeeded. They’ve got the instincts and the hustle and the heart, no doubt. But it would have taken years to build the kind of supportive community they have now, and it would have cost untold marketing dollars. They could have had a party, spent a ton of money on invitations and stamps, and they would have gotten twenty people in the door and reached a hundred people, maybe two hundred, from residual word of mouth. Today, they can get over a hundred people in the door and reach thousands who aren’t anywhere near the joint, but wish they were. What the story of AJ Bombers’ success tells us is that in our word-of-mouth society, if you know your customers well enough, and can speak their language, you can create tremendous opportunities for growth.

  They’re not afraid to try something new. AJ Bombers ignored traditional marketing like direct mail and newspaper ads—all those staples most local businesses rely upon—in favor of a platform that became available in Milwaukee only in October 2009. At the time of the swarm event, there were only three hundred to four hundred Foursquare users living in the area; AJ Bombers managed to bring a quarter of them through its doors in one day and increased revenue for that day by 110 percent. Any CMO at a consumer branding company would have sworn up and down that there wasn’t enough market penetration for Foursquare to mean anything to anyone. Yet in a small environment, which Milwaukee is in comparison to New York or Los Angeles, micro has power. It’s time to start looking at early tech adopters as a micro group, maybe even your most valuable consumer, because if you can get them on your side, they’ll do a lot of work for you. You put in the heart and the sweat, and they will reward you with untold amounts of earned media in the form of press, talk, and visibility.

  AJ Bombers rewards the right people. What’s most exciting to me about what they do is how they reward their customers for caring. They could have bought a billboard ad or created a radio campaign or bought TV time and tried to blindly broaden their base. Who would have gotten the money? The ad platform, of course—the billboard company, the radio station, the networks. The way AJ Bombers does business, who gets their money? The customer who takes a chance on them. That’s a textbook move in the Thank You Economy. When AJ Bombers throws a party and hands out free burgers and beer, they’re spending the money on their guests that they would have forked over to a traditional ad platform. It’s a whole new way of thinking about where to spend your marketing budget. It should be pretty easy, actually. I mean, really, whom would you rather spend money on, a go-between or the people your business is supposed to serve? It will make those people far happier than any radio ad, and it will cost you far less. For now, these platforms are not mature enough to command as much of a markup as traditional platforms to get to the consumer. Therein lies the opportunity. Instead of Clear Channel or Lamar or Viacom getting 40 percent of the
action, the new emerging platform—Gowalla, Foursquare, or whatever is around the corner—will get 5 percent of the action, maybe 10 percent. These numbers are based on where we are now, but I am sure the margins could become even more attractive when you take into account the ROI of the dedicated team of people you hire to get in the trenches to care for your customers. The day is coming when companies are going to fill warehouses with armies of people who are passionate about their brands, who care about the people interacting with the brands, and who are eager to spend hours telling their story.

  Given that, every company can invite their customers to the party. However you do it, whether it’s with a real get-together with music and food or a live video on Ustream, you need to show them a memorably great experience so that they say, hey, no one else has ever cared enough to reach out to me this way. You have the choice to spend $3,000 or $5,000 or $10,000 on a weeklong ad campaign that may or may not register with your audience, or to spend the money on an event (one that combines the two goals of interacting with your consumers and showing them a great time) or campaign that not only brings a lot of joy to people, but whose effects spill over as people talk and share and post pictures. When put in those terms, which sounds like the riskier investment?

  The Cost of Free

  You might wonder how AJ Bombers makes any money when Joe Sorge gives away so much for free. Sorge answers that question in an interview with Forrester Research, “This restaurant in particular has become ‘their’ restaurant, they ARE the business.” AJ Bombers creates constant opportunities for customers to care about it, and people spend money at places they care about. For example, the flood of guest-generated information on the “tips and to-dos” page caused the sales of one of the restaurant’s most popular items, “The Barrie Burger,” to rise 30 percent. The Barrie Burger was created by a customer named Kate Barrie, and is topped with a bizarre-sounding blend of bacon, cheese, and peanut butter. A peanut butter burger. It’s no wonder some people might hesitate to order it. But once they could see for themselves the raves coming straight from the mouths of people who had just stuffed one down their gullet, the comments gave more customers the courage to try it. And like it. And come back for more.

  Offering things for free is a well-known tactic used in lots of industries to bring in customers, but Foursquare has allowed AJ Bombers to extend the life of that tactic indefinitely. If you’re not a Foursquare kind of person, you might not get why people would covet the title of mayor at establishments they visit often, or check in to earn badges. It doesn’t really matter if you get it, though, does it? The fact is, they do. And since anyone can usurp a mayor’s spot, it takes commitment to hold on to the position. What could be a simple one-shot move turns into a fun, profitable, sustainable game of one-upmanship, a test of loyalty, and a sign of being in the know.

  It might sound crazy, but online gaming, too, is increasingly becoming a part of a lot of online users’ identity. When moms are spending real money to buy virtual cows on Farmville, you know games have reached a tipping point. More than 200 million people play free online games on Facebook. Target now sells Facebook credit gift cards, and 7–Eleven did a promotional team-up with Zynga, maker of such games as Farmville and Mafia Wars. Again, you might not see the point of playing these games, but a lot of consumers do. Go where they go.

  Do I think that every restaurant should give away free food every time they see a complaint or negative review on Yelp? No. There will be people who will try to eat all year for free by gaming this social phenomenon. You have to put a cap on that, of course. It can be hard to figure out a complaining person’s intent—are the complaints legitimate, or is the complainer playing games?

  What you can do, however, is keep good metrics on the client who says something negative about you. If a customer posts on Yelp that he had a terrible experience at a restaurant, the restaurant manager can respond appropriately, tag him with a system like Open Table, which tracks online reservations, and run a report six months later to see whether that customer has returned and how much money he has spent.

  Scaling One-to-One

  AJ Bombers is a one-store location, but this kind of customer reward strategy is not limited to small, local businesses. Starbucks has scaled this kind of consumer reward to a national level, and McDonald’s, Einstein Bagels, and KFC have all gotten into it. The Thank You Economy works when you build a sense of community around your brand, not when you simply sell to it.

  CHAPTER ELEVEN

  Joie de Vivre Hotels: Caring About the Big and the Little Stuff

  The name of Joie de Vivre, California’s largest boutique hotel company, says it all. Executive chairman and founder Chip Conley could have named it after himself (Conley Hotels does sound stately), or he could have named it after Eddy Street, the address of his first hotel, near San Francisco’s seedy Tenderloin district. He could have given it a name that nodded to the company’s California roots. Instead, the name he gave his company is foreign, and kind of hard to pronounce. Yet it’s perfect. Bringing “the joy of life” to customers is exactly what Conley’s company tries to do every day. You’d think that was par for the course for anyone in the hospitality business. But it’s easy to imagine that when customers experience a Joie de Vivre hotel, they realize something has been missing every time they’ve stayed anyplace else. It is a company that is doing its damndest to perfect the art of customization, something people can experience from the moment they start looking for a place to lay their head for the night.

  One-on-One Shock and Awe

  When travelers arrive, they’re met at the front desk by a host whose profile is posted on a card. It describes a little bit about whoever is working that day, and offers his or her take on what visitors should avoid during their visit so they don’t waste any time. It’s a great way to start a conversation and set the tone for the visitor’s stay, implying, “We love where we live and want you to love it, too.”

  From then on, it’s anyone’s guess what pleasant surprises a guest might enjoy. The hotel collects as much information as possible about each visitor when he or she makes a reservation, and the company encourages, even challenges, employees to use that information to take every opportunity to give a guest a memorable experience through an initiative called the DreamMaker program. Many do it through small kindnesses, such as arranging for a cake when they learn someone is celebrating a birthday, or greeting honeymooners with a bouquet of flowers and a bottle of Champagne. Employees vote for best DreamMaker of the month, however, and the employees who earn that coveted title are the ones who find ways to deliver an over-the-top experience. For example, Jennifer Kemper, a reservations manager at the Hotel Durant in Berkeley, shared this story about how a mother’s love inspired her to create an extra-special welcome basket:

  I met Mrs. Z for the first time in mid-September. She had asked to speak to a manager because she was trying to arrange an extended stay and we had some sold-out dates. She told me that lately she had been staying at different area hotels but the Durant was the only place she felt at home. I noticed her eyes welling up and asked her if she was ok. She then told me why she had needed to stay here so long and so often. Her 20-year-old son was dying of cancer and was still trying to continue as a UC Berkeley student. She had been coming up to help take care of him during his chemotherapy sessions. Being a mother of a son I completely empathized and felt my eyes, too, welling up. I touched her hand and said that I would make sure she was comfortable here.

  A few days passed and I had been thinking of her and decided she was the perfect DreamMaker candidate. So I went down to Telegraph Ave. in Berkeley and found this quaint herbal and tea store. I found a ceramic dragonfly mug with a built-in strainer and steeper, and then I bought her a tin of fresh chamomile tea that had beautiful dried flowers in it. As a final touch, I bought her three sunflowers to brighten up her room. I wrote a card that said, “For a loving mother who deserves to relax. Your family is in our thoughts and prayers.” She came
down the next day and thanked me, and again we both had tears in our eyes. She said she told her whole family about this special gesture, one that touched both her and me. Mrs. Z continued to stay with us until her son graduated from UC Berkeley.

  Dream making can be pure fun, too. At the Shorebreak in Huntington Beach, TJ Ransom, a guest services clerk, spoke to a bride whose bachelorette party was going to take place at the hotel. A local, he knew all the restaurants and bar owners in the area. When the party checked in, they were surprised to be sent out on a scavenger hunt that took them to five of the most popular bars in town, where they were received with VIP seating, a round of drinks, and a bachelorette-party game. Upon returning to the hotel, they found their room decorated in the bride’s wedding colors, platters of chocolate-covered strawberries, and a cheese plate.

  Word of Mouth Works

  Can you imagine how many times Mrs. Z and her family talked about Jennifer’s thoughtfulness? How many tweets and photographs and videos via Twitter, Facebook, or Tumblr do you think that bachelorette and her friends sent throughout their incredible night, courtesy of TJ? What if one of the bridesmaids had a friend who worked for ABC News, and one of her friends was a journalist looking for a fun segment for 20/20? How many blog posts about random acts of kindness, or pre-wedding rituals mentioning the hotels likely got written? How many times were the posts shared and circulated throughout these people’s online communities? I’d bet my left big toe these stories got a lot of attention, and will be remembered the next time anyone who heard them has to travel to California. What these hotel employees did to bring some joy to their clientele would have been appreciated and meaningful at any time, but the impact of their actions had far, far greater reach and consequence because of the Thank You Economy.