S4e10 The Plaid Suits and Know Your Customer Better Than Your Competitors Edition with Jay Baer

James Nathan  00:07

Hello, and welcome to The Only One Business Show with me your host James Nathan and another fabulous guest for you this week. In fact, a really fabulous guest for you this week. And a man with many, many loves alongside was my heart. But this gentleman is a guy who helps businesses clone their customers a seventh generation entrepreneur. He’s written six best selling books and founded five multi billion, I wish, multi million dollar companies. He is one of the world’s top 30 global gurus in customer service and online marketing and is a Hall of Fame keynote speaker. He has helped many of the world’s iconic brands, people like United Nations, Oracle, Hilton, US Bank exceed their customers expectations. He’s a lover of plaid suits. He’s a licensed tequila consultant and a certified barbecue judge. Now I’ll leave it to you to guess which my loves are. Hang on to your seats, and please welcome Jay Baer. Jay, how are you?

 

Jay Baer  01:52

Oh, thanks so much. Great to be here with somebody else who loves plaid suits.

 

James Nathan  01:56

Well, you know what, I haven’t worn suits for a while and I’m quite looking forward to getting back onto them. You’ve started travelling a bit though again, haven’t you?

 

Jay Baer  02:04

Yeah, I have. It was it was a lot of presentations over zoom and such for a couple of years, which I don’t mind if you’re if you’re gonna pay me to give a speech and I don’t have to wear pants like I’m okay with that. But now we’re, we’re back out on the road. But here’s the deal. Now that we’ve gotten through this pandemic, I refuse to wear ties. So I own a lot of ties. And I’ve 14 Plaid suits in different colours. I’ve got even more ties, but the ties are lonely because I’m like, look, I’m just not doing it anymore.

 

James Nathan  02:31

Do you know what Jay, I haven’t worn ties for years. And I know how long ago it is because my daughter who’s now 13 was about five, I came home from a rugby club dinner. And she said she pointed at me and shouted, what’s that? And it was because I was wearing the club tie. And she loved it so much she worked for the rest of the night and to bed. It’s got to be at least 13 years. And my clients don’t wear them. I think you know, we try to mirror our clients a bit, don’t we? And I look at them think Well, I’m gonna look stupid if i’m different to you but also they’re a noose to hang yourself with aren’t they?

 

Jay Baer  03:04

That’s right. I don’t think I’d want to be in the tie business right now. I do see suits coming back. Because people want to, you know, kind of have some measure of formality and some of their dress and make him feel you know, not just wearing sweatpants or slippers. Funny thing in COVID 70%, seven zero percent increase in slipper sales.

 

James Nathan  03:28

Wow, that sounds… that’s really cool. I went to a client a little while ago actually. And one of the first ones I went back into to live after for a while and when I walked into their office I’d never been before they had a slipper rack. As you came in you took your slippers off and put your shoes back on. I thought that’s my that’s my work goal. That is. Yeah, I need that.

 

Jay Baer  03:47

I love that. Doughnut wall and a slipper rack, I got it all

 

James Nathan  03:52

Plaid suits? I’m not…. Well, look, I think they look great on you. But you’ve got to be the right guy to pull those off. Don’t you?

 

Jay Baer  03:58

You have to have a measure of confidence about it. And I’ll tell you the reason I do it. Well, the reason I did it initially is you give a presentation, and there are somewhere between 500 and 5,000 people there. And ideally, you want someone to be able to talk to you afterwards because maybe they’ve got a question, or maybe they want to hire you or what have you. The problem is with menswear, everybody looks more or less the same. They have a blue suit or a grey suit and maybe a black suit if you’re really daring. And so even though I’m a little bit taller than most folks, it’s kind of hard to pick somebody out out of a big crowd. I thought I can solve this. Let me here’s wear a colour of suit that most people are not going to wear. And so I bought one and I wore it because like oh that’s a great suit. I’m like is it and then I bought another one a little crazier. And then another one a little crazier. And every time I pushed the boundary of the colour and the pattern a little further, more and more people would comment on it. So this is definitely working. And then I turned it into an actual customer experience. So, and word of mouth generator. So now, when I am booked to give a presentation, either in person or through the internet, the meeting planner gets to pick out which suit I wear. So there’s a special website that we built, it’s dressjaybaer.com. And they get to go to Lincoln, all the suits are there, and they get to pick which one and then we wrote a little routine. So it automatically goes on my calendar. So I know which suit to pack or, or put on, and they can match it to their logo or match it to the sponsor logo or match it to the colour of the stage lights or whatever. And now they’re part of the bid. And they really liked that. And they did tell each other about that. So it’s it’s been a nice, a nice device.

 

James Nathan  05:40

I was wondering how I could integrate that? I wear gingham blue shirts, I don’t know why I started, I just liked them. In the business I used to work in these to call them James Nathan shirts, because I wore them every day, I’ve got 20 in slightly different shades of blue. It’s not gonna work for me that is it?

 

Jay Baer  05:57

Here’s how I would do it out. But what I would do is if you send if you send thank you gifts to meeting planners after they book you or after the event, and I would send them a James Nathan shirt.

 

James Nathan  06:08

Wow, that is a fantastic idea because I talk a lot about the thank yous. And I think you know, there’s nothing nicer than then a gift out of the blue or something very specific. That’s a great idea.

 

Jay Baer  06:19

There you go. Show’s over kids…

 

James Nathan  06:21

We’re all done. Fabulous. How did you get into customer service and service excellence and the CX world?

 

Jay Baer  06:30

So I, I went from politics, I started in politics, I was a political campaign consultant here in the States, and did that for a little bit, and then got into what we would consider to now be traditional marketing. And then I got into digital marketing very, very early. I started when domain names were free. I mean, in 1993, is when I started in online marketing before Yahoo, before browsers. Before Google… long before Google. I started long ago, that my partners and I in my first internet company, we registered a bunch of domain names because again, there is no cost. And we get a call one day from Anheuser Busch, which was the brewing company that founded Budweiser the most popular beer in the US. And they said, we’d like to build the first website ever for Budweiser beer. And it says that that you kids, I think I was 23. Own this domain name. We said yes. So we’d like to, we’d like it. And so we’re not just going to give it to you. So we negotiated back and forth, forward and back. And we sold the budweiser.com to Anheuser Busch in 1983. For 50….. cases of beer. That is a true story.

 

James Nathan  07:47

Fantastic.

 

Jay Baer  07:48

But in our defence actually written in the contract, it said bottles, not cans, because you got to keep it classy. Keep it a classy.

 

James Nathan  07:55

Well, fair enough!

 

Jay Baer  07:56

I mean, yeah, I mean… So that’s a long time ago. I was in marketing for a long time and still do a lot of marketing work. But my observation a decade or so ago was increasingly customer service and customer experience are marketing. It is a differentiator. And what really flipped that switch was when consumers started to use the internet, social media ratings and review sites, to express their satisfaction or dissatisfaction about businesses when I wrote my book, Hug Your Haters. One of the key theses in that book is that customer service is now a spectator sport. Yes, of course, you want to make the customer happy. But the economic impact is not really the customer at hand, it’s the hundreds or 1000s or 10s of 1000s of people who are watching how this plays out online. And so that’s when I started to kind of go down this avenue that marketing and customer experience are largely two sides of the same coin. And and I started talking about that years and years and years ago, and now the data bares it out. There’s a report by Salesforce last fall that said that globally some 80% or might have been 85% of brands, the marketing department is ultimately responsible for customer experience. So it ends up being essentially the same right that, that marketing kind of sets the expectation, but service and experience has to fulfil it.

 

James Nathan  09:30

But it stands to reason doesn’t it and if you think about the way that businesses used to work way, way before the internet, you know it was always about I’ve got a friend or that’s a great butcher or let me introduce you to or you know, we was all word of mouth. Everything was about reputation and word of mouth and that was the way that apart from the obviously the big advertising campaigns that some businesses did but but the heart of it is enjoying working or going and shopping with somebody and the service and the experience but so great. You want to do it again and tell other people about it? That’s the same.

 

Jay Baer  10:02

Absolutely. Yeah, it’s still true today. It’s just that the word of mouth moves faster and reaches more people. It wasn’t that long ago. And you’re exactly right that even if you were overwhelmingly satisfied with a business, how many people do you actually speak to? You know, at, you know, at the pub, or at the hair salon or at your kid’s football match, or, or at church, I mean, I don’t know, a couple 100, maybe, maybe, probably a lot less than that. So that the amplification of satisfaction or dissatisfaction was rate limited by the number of people that individuals collide with. What happened with the internet and social media that remove that rate limiter. So word of mouth is as important. In fact, I would argue, perhaps even more important than it’s ever been. It just that it moves faster and grows faster than ever.

 

James Nathan  11:00

Yeah, it was Gary Vaynerchuk. Who said social media is word of mouth on steroids. Yeah. How many years ago when when people will go, who’s this crazy guy selling wine? And I still love him. I really do. But it is important that we think about it more and more. Because as this becomes more of, I don’t know, it becomes more norm to us. Certainly my kids generation, you know, they’re teenagers, the internet is… it’s always been there as far as they’re concerned. We need to continually rethink it and rethink about how we’re using it. Because it’s all well and good to just bang stuff out, isn’t it but making good online marketing is a totally different thing.

 

Jay Baer  11:37

Well, this, this might surprise you and listeners, I’ve done a lot, a lot of research on word of mouth, my book, Talk Triggers, is all about word of mouth. And one of the fascinating discoveries that my co author Daniel Lemon, and I made in that project, is that if you think about generations, you’ve got the greatest generation, Baby Boomers, Gen X, millennials, Gen Z. Amongst those generations, the generation that is influenced most by word of mouth, is Gen Z, is the youngest. The younger you are, the more word of mouth drives your purchase decisions. And you think about what the implications of that are and why that’s true. The implications are that if you don’t have a story that people tell about your business, they’re not going to talk about your business at all. And, young people trust each other, even if they don’t know them that but they trust their peers, and they trust real people, manifestly more than they trust businesses and organisations. And I don’t see that turning around. So that’s why you get into this entire sort of related category of user generated content and influencer marketing, right influencer marketing is essentially word of mouth with a strategy and some budget. And, and all of that succeeds, because people believe people more than they believe even the best advertising or the best content from from brands.

 

James Nathan  13:07

Yeah, and we all do like to read the reviews don’t wait, we like to see what other people think before we purchase something,

 

Jay Baer  13:12

Only a fool wouldn’t. I mean, what, who’s got so much time money and trust it? You’re like, well, I have no idea whether this business was any good, but I’m just going to roll the dice. Like, a good idea. Yeah. I mean, it’s great.

 

James Nathan  13:26

Exactly. And, you know, it does get to a point though, with someone like Amazon where there are so many reviews, you start to wonder whether they’re actual or not, you know, and, and people like to review good and bad, but they don’t tend to review in between.

 

Jay Baer  13:37

Amazon is tricky, especially because you’ve got a lot of these, a lot of these, quote unquote, brands that aren’t brands, right, they… it’s a typically a Chinese but not always exporter, or product manufacturer, who who kind of creates a brand for the day, you know, launches a copycat and then uploads a bunch of fake reviews and then sells a bunch of stuff. And then they get kind of caught relatively soon, but they take it down. They just kind of do it again, it’s sort of a whack-a-mole. And that’s it’s a challenge for Amazon, I certainly have have made a couple purchases there where I was like, that isn’t exactly what I thought it was going to be. Which is, which is unfortunate. But I think for local business, generally speaking, things are more trustworthy and aboveboard. Now, can your competitor who also owns a tyre shop, put in a fake negative review? Of course. Does that happen? Absolutely. But on the whole, people are typically looking at between five and 10 reviews when they’re making a decision. So one negative review, or even two negative reviews aren’t going to have a huge impact. However, that’s why it’s so important for all businesses, regardless of the size or type to continue to get new reviews. You know, you’re never done with this. You always want to have more which which sort of balances out any negativity whether that negativity is authentic or inauthentic. And then one thing that people don’t talk about very much, Google actually uses what they call reviews velocity as a ranking factor for local businesses. So if you do a search for nail salon near me, you’ll get a map, and a bunch of businesses and star rating 4.6, 3.8, whatever. One of the factors they use to determine who’s first and who’s six, and that is not just the average score, one to five, but how often that particular business accumulates new reviews. So literally, it impacts your Google rankings. If you get a steadier or stream of new reviews from your customers, which is why I tell every business if you don’t have a system to solicit reviews from your customers, you need to get one now.

 

James Nathan  15:51

Look, it’s interesting is that because it’s a drum I bang all the time. You know, I work with service businesses, professional services, business, remaining recruitment businesses, that kind of thing. And, and I’m forever saying testimonial, testimonial testimonial. Get your client talking about what you do. Get them telling you, you know, and that’s… it’s a form of review, isn’t it? And it’s a social currency. People want to see someone like me liked that, you know, and it’s no different. But a lot of people don’t like to ask… they feel, I don’t know if it’s an English thing, because I’m, you know, I’m Australian, but I live in England, if it’s that kind of thing, or I don’t know what it is, is it same in the States? Or is it different?

 

Jay Baer  16:29

No, it’s the same thing. People just feel awkward about it. And we know that it’s like, hey, you already gave us money. Now we’re asking you for something else. And what if they say something that’s not complimentary. And then I think the mechanics of asking, especially for testimonials, for a review, it’s a little easier, because you can just say, hey, here’s the link, click here, it takes him to Google. But for an actual testimonial, my observation, and this is even getting testimonials for books and things like that, you know, somebody say, hey, give me a testimonial. And they’re just sort of looking at that blinking cursor. And now they’ve got a wordsmith it and turn it into, you know, whatever, somewhere between one in six coherent sentences. And that becomes, that becomes work for them. So my advice is to do it this way, to just get that person on the telephone and say, hey, what did you think of the service? What do you think of the book, what you think the whatever, you record it, transcribe it, because people can, people can have that exchange of ideas out of their mouth? Faster, easier, more comfortable than they can typing it. And so just do it as a series of voicemails, right? Leave us a voicemail about what you thought, and you’ll, you’ll usually get a higher response rate when you do it that way.

 

James Nathan  17:44

That’s a really great tip, because it’s just an extension of what I’ve always said to people is when they’re telling you, it’s great. At that point, you say, hey, look, can I be really cheeky? Would you mind writing that down? But actually, what you’re suggesting is….

 

Jay Baer  17:56

Record on your phone and say, can you say that again? Into my phone?

 

James Nathan  17:58

Say it again? And transcribe, there’s a lot of good transcripts of we absolutely need to do it yourself. But they look fantastic. And and then share the hell out of that stuff.

 

Jay Baer  18:08

Yeah, I mean, what smart businesses do is they then take that, put it on their website, etc, which of course, is expected. But but you can also, you know, take those kinds of testimonials and with permission, turn them into really effective advertising. There’s, it’s amazing to me how few ads actually include testimonials. And it’s a missed opportunity.

 

James Nathan  18:28

Yeah, it’s…. I guess that’s another thing that people just don’t think about. I think we’ve got to show the product, but we forget the proof part.

 

Jay Baer  18:35

Right? Yeah. Well, I don’t want to see the product unless somebody tells me it’s good.

 

James Nathan  18:39

And yeah, and then it’s about the targeting, isn’t it that makes it really interesting.

 

Jay Baer  18:43

If people think that the sequence is fall in love with the product, and then look at the testimonial to make sure you want to buy it, I would argue it’s the other way around. Show me a testimonial of somebody like me, who says I really liked this product. And then I want to see more about the product.

 

James Nathan  18:59

I’m trying to link this back to barbecues as quickly as I can Jay. It’s got to be a way I’ll get there. How’s influencer marketing changing? Because that’s a very rapidly developing part of marketing, isn’t it?

 

Jay Baer  19:10

Oh, it’s huge. It is it is going to be already is a billion dollar business. And it’s going to be huge. I mean, I believe that it will be ultimately half of all marketing will be influencer marketing in some form or fashion. Just because it it works better. And while it’s still a little bit of a make it up as you go form of marketing now. There’s so much more coherence around best practices and software and how you work with influencers and what do they want? What do you want, in contracts and performance and measurement? It’s all coming together. It reminds me the early days of online advertising, the early days of SEO, the early days of email, all these things that I had a front row seat for. It’s just a natural order where it just is kind of a mess and then people start to say, you know we’ve done this enough times, here’s a better way to do do it and that kind of becomes the standard. I’ve got a pretty good handle on it because my daughter, her first job, she just graduated uni last year. She’s a head of marketing for an influencer marketing software company in Paris. And so she is right in the middle of it all day every day. And it’s, it’s amazing. A lot of her clients are Givenchy and Louis Vuitton, and Chanel and these kinds of brands, and the amount of their marketing budget that’s devoted to influencer work is continuing to rise.

 

James Nathan  20:34

It’s fascinating, isn’t it? And I wonder where it leads advertising in the future?

 

Jay Baer  20:38

Well, I, you know, advertising can still be the conveyance mechanism, potentially. But maybe… I see it now. Like brands, brands work with me a lot as an influencer. And I’ll create content, mostly in b2b. Certainly, and for software companies and such. And so for example, what what happens with some degree of regularity is they’ll say, Jay, let’s work on a deal together. Can you create a video or an article or whatever? And I’m sure. So I create my piece of content, but then they put money underneath it to promote it, right. So they, they turn my content into advertising, as opposed to them making their own ad and to me, that’s kind of where they, where, those two disciplines will intersect.

 

James Nathan  21:20

Okay. And how did you get into tequila? Because becoming a tequila Somalia is quite a step on from I just like a shot of tequila now.

 

Jay Baer 21:29

Indeed. Well, I grew up. I’m from Arizona, I grew up in Arizona, which is right on the right near California. And in the US Mexican border, and I was there for 40 years, I went to school in Tucson, Arizona, University of Arizona. So we were only, oh I don’t know, 30 miles from the border pretty close. drinking age in the US remains 21, drinking age in Mexico, is allegedly 18. But I’ve never seen anybody carded. So when we were when we were in uni, we would we would go to Mexico every weekend basically, and have fun down there. And then as I got older, there became this sort of groundswell of appreciation for agave spirits, mezcal, and tequila, etc. And one of my good friends started getting into it. And he and I kind of went on a little bit of a educational journey together. And of course, being in Arizona, there’s lots of Mexican food restaurants and much more tequila than you would find in I don’t know, Nebraska, or Massachusetts or something because you’re closer to the border. So I just sort of steadily got into into it.  And then people started to send me… I put on my…. what, how this actually really happens, I put on my bio, that I was a tequila collector. And, and so when people would send me a thank you gift, after I give a presentation, etc, they started to send me tequila. And I was like, well, this is a great idea. This is really working. Hey, I’m onto something here. So I started to build a bit of a collection for sure. And then a few years ago, I’ve made lots of trips to Mexico on holiday. But a few years ago, I started to go to, instead of the beach, to Jalisco, which is where tequila is produced, and sort of to tour distilleries and meet a lot of the people who make tequila and and get introduced a lot of the brand heads and people like that. And so that gave me an even greater appreciation. And then spurred on by that I started to do a lot of intense study. So you know, hundreds of hours of actual research and study and passing courses and certification exams, and blind tastings and all those kinds of things. And now it’s great because I do a lot of tequila tastings for clients. And a lot of times I’ll do you know, 30 minutes of marketing or CX talk and 30 minute tequila tasting you know, inside a webinar and a live event with digital. And I’ve got an Instagram account and a tik tok account devoted to tequila advice. And yeah, and Brant tequila brand send me stuff to to, you know, rate and review all the time. So yeah, it’s it’s a it’s a really fun highlight, and kind of side hustle, and it’s growing like crazy. By next year they say that, the predictions are that agave spirits, so Mezcal and tequila combined, will be the single largest spirit consumed in the whole of the United States. Will pass vodka as the number one spirit which is remarkable. So the year over year growth rate in the tequila category is somewhere around 30 to 40% year over year, Its just absolutely exploding. So there’s a real market for this kind of information that I provide. And you know what? Well someday I started tequila brand, maybe. Maybe but you got to put a lot of money behind it. So yeah, yeah

 

James Nathan  24:50

Look, it’s some it’s a spirit I don’t know much about. I know, I remember going to the… I go the London wine show every year and when it’s exists, and they have a spirits part of that show. And a couple of years ago, tequila was the focus spirit. And I tell you, at four o’clock in the afternoon, I walked out of that hall into the bright daylight, and I nearly fell over. It was one hell of an afternoon. But amazed how many, how many brands, how many versions, how many different cocktails? It’s fascinating stuff.

 

Jay Baer  25:21

Yeah, it’s really, really flexible. If you look at other categories like gin, certainly vodka, rum, whiskey, bourbon, they’re all really interesting in their own way. But I would say that tequila has, to your point, the largest breadth of potential flavours, and, and so many small brands, you’ve got a few giant corporate brands that are owned by the large spirits conglomerates, but literally hundreds and hundreds and hundreds of small artisanal craft, very carefully produced brands that are all kind of fighting out for shelf space, which is interesting.

 

James Nathan  25:55

And that’s where it gets great doesn’t. I grew up in Western Australia, where I think it was probably one bottle of tequila, and every any every liquor store.

 

Jay Baer  26:04

And probably a not a good one

 

James Nathan  26:05

It would have been terrible. And people going oh, don’t touch that stuff you’ll end up on your arse. Whereas, you know, then you start to get into… it’s like any onion you peel that and you start to get into it and start to understand that there’s a lot more and then you get to the craft stuff, and you get to the really nice stuff. And we can talk about this all day long. And then we open the barbecue thing. So how did you become a barbecue judge?

 

Jay Baer  26:28

Well, my dad owned a steakhouse when I was a kid. That was one of his entrepreneurial ventures. And so I was I was kind of raised inside a restaurant for a few years. He got out of it after a while but so I was and his specialty was mesquite wood grilled beef ribs, which is a pretty unusual specialty.

 

James Nathan  26:48

Sounds good though

 

Jay Baer  26:49

Yeah, it was amazing. And he was always doing grilling, and my grandfather as well. And they sort of taught me how to do it. And then when I moved, I guess probably about what I was moved here to the Midwest. So probably 12, 15 years ago, I really said, hey, I need a new hobby. And so really got into barbecue and smoking and bought a bunch of smokers and some buddies and I really thought about creating a competitive barbecue team. Because there’s a huge competitive barbecue circuit in the US. We ended up not doing that, because we all travelled too much. We’re like, we could never keep it together. So we didn’t do that. But we all got really into it. And then I thought, well, what’s the best way to eventually start a barbecue team is to understand how the competitive side works. And so I went to barbecue judging school, which is an amazing kind of weekend, where they teach you all the ins and outs of competitive barbecue and how they score and rate and review and, taste what to look for is really fascinating. And so I became a certified barbecue judge and started to judge competitions around here and so, so I still spend a lot of time over over the smoker and as much as I would like, because I travel so much. But it is something that you can do, literally forever. And so I really enjoy it.

 

James Nathan  28:13

That just sounds like a fantastic retirement plan to me.

 

Jay Baer  28:17

Yeah,I like it. Yep, tequila and barbecue.

 

James Nathan  28:18

Yeah, well what else do you need? Maybe you can put some beer in there and I’d be a happier man. But yeah, sounds fantastic. Jay, I could chat to you about all this stuff, because it’s so much fun. I’d love to ask you one big question, though. What’s the one thing that people could do in their business today? And in the years to come? Or in the years to come to really change their business? What would be your tip for them?

 

Jay Baer  28:40

Everything has changed in the last couple of years. There’s so much compelling data on this that customers are making different decisions for different reasons, because they’ve been forced to reassess what’s important to them and their life. Customer experience, more important than pre pandemic. Price, less important than pre pandemic. That’s just one example. Alignment of values, way more important than ever. Fascinating research came out not long ago that said that some 40 plus percent of consumers would change banks if their bank didn’t align with their personal values. Right. Last time you changed Banks was but it is a hassle like it is is not easy to change banks. We were like, You know what, I will go through that level of effort. If I don’t believe this bank sees the world the way I see the world. The reason I give you that preamble is that most business owners and managers think that they really understand their customers after all, they’ve been selling to their customers for years. Yep, I will tell you especially because everything has been turned upside down. You don’t understand your customers as well as you think you do. And I firmly believe that the business successes over the next two to three yours in every category will be the businesses that understand customers the best. So if you haven’t taken time to do a new customer survey, if you don’t routinely have actual conversations with customers to get a pulse on what they’re thinking, feeling and fearing, then you are at a competitive disadvantage to everybody else in your category. So my advice is this know your customer better than your competitors.

 

James Nathan  30:26

I couldn’t think of a better bit of advice to give. Jay, thank you so much. It’s been great fun chatting with you.

 

Jay Baer  30:32

My pleasure it was great.