Here's Where We Should Be Spending The Money We Waste on Advertising

The days of Mad Men are truly over. With TV viewership dwindling, the ‘unsubscribe’ button reigning, and social media noise increasing, getting in front of consumers is becoming harder and harder. And yet, while the U.S. spend on advertising as a percentage of GDP has stalled over the past fifteen years, it still accounts for a whopping 1.29 percent. By comparison, farming accounts for 1 percent, and educational services account for 1.1 percent. So where is all of this money going?

In large part, it’s actually just being filtered out as spam — in other words, it’s completely wasted. There are over 80 million photos posted to Instagram daily; users upload over 400 hours worth of video to YouTube every single minute; and over 1.4 billion people log into Facebook on a daily basis. And this isn’t necessarily content that we all want to see: teens on Facebook consume ads 2.5 times faster than older adults do, and over 55 percent of all email traffic is spam — and that’s actually a good number compared to three years ago, when over 70 percent was spam. Consumers are overwhelmed with content, and most advertisements get lost in the hubbub.

With all that noise, companies either need to up their already inordinate advertising spend to stand out, or they need to take a different tactic.

Customer Service Is The New Marketing

Instead of pandering to Facebook’s algorithm for ten likes or promoting a tweet that anyone under 20 will scroll past in under two seconds, focus on word of mouth. While consumers may not spend very much time interacting with your ads, they will spend time either bad mouthing or praising your company on those same platforms.

For that reason, customer service has gone through its own renaissance over the past five years. Businesses started to realize both the high cost of poor customer service and also the fact that it’s much easier to sell to an existing customer than a prospect (5 percent likelihood of success vs. 60 percent).

As Forrester pointed out, “Today’s customers reward or punish companies based on a single experience — a single moment in time. This behavior was once a Millennial trademark, but it’s now in play for older generations. It has become normal.”

Over half of your marketing emails may be viewed as spam, but 100 percent of your customer interactions will impact future sales. Because of this, 72 percent of businesses say improving customer experience is their top priority.

Where To Allocate Those Spam Dollars

At this point, many, if not most companies recognize the importance of customer experience. But many of these same companies are putting the dollars they used to spend on spam into the customer service equivalent of spam: the call center. Companies spend $300-350 billion on contact centers annually, of which third-party outsourcing accounts for 20-25 percent. And yet, the most common reason that customers dread contacting customer service is because of “difficult to understand accents from offshore call centers”. It’s no wonder that while 80 percent of companies say they deliver “superior” customer service, only eight percent of people think these same companies actually deliver superior customer service.

While the intent behind allocating resources to customer service is correct, if these resources are thrown into the wrong types of customer service, they’ll end up alienating customers even more than an old-school support email would have. Today’s customers want just two things:

The opportunity to self- serve: Microsoft’s Global State of Multichannel Customer Service Report found that more than 90 percent of all consumers expect a brand or organization to offer a self-service support portal or frequently asked questions (FAQ) page.
Native chat: 29 percent of consumers are more likely to make a purchase with the option of live chat — even if they don’t use it!

By offering these two avenues for customer service, you increase loyalty, decrease negative social media press, and get free advertising through word-of-mouth. Take Glossier, for instance: the D2C beauty company (that raised an additional $52 million last week) says 80 percent of its growth and sales come from peer-to-peer recommendations. That’s a lot more payout than a few likes on a Facebook post.

Don’t Just Invest, Invest Smart

Customers say that the most important thing a company can do to offer good customer experience is valuing their time, according to Forrester. As companies shift away from investing in advertising into investing in optimizing the customer experience, they will need to remember that being placed on hold is just as much of a waste of time as opening a spam email is.