CMT In Depth

Are You Prepared for the Zero Moment of Truth?

This article originally appeared in the April/May 2018 issue of Canadian Music Trade

By Michael Raine

The moment a customer sends an email, makes a call, fills out an online form, or walks into your store for the first time, that is the “zero moment of truth.” It’s the moment you, as a company, learn that potential customer exists.

“Can anybody tell me the relationship with 70 per cent and the zero moment of truth?” asked web marketing expert Marcus Sheridan as he looked around a ballroom of MI retailers during his NAMM U Breakfast Session at The 2018 NAMM Show. “This is what we know: that today, on average, 70 per cent of a customer’s buying decision is made before the zero moment of truth. Seventy per cent of the decision is made before they call you, before they contact you, and certainly before they walk into your store.”

“I personally did not come up with ‘zero moment of truth.’ It’s a phrase that people have been using for about five or more years, but I just tend to talk about it more. To me, really, this foundational shift – the amount of the decision that the buyer has made before they physically talk to the company or to a sales person – is unquestionably the greatest shift that’s happened in business over the last 50 years. There’s no question at all,” Sheridan tells Canadian Music Trade.

Marcus-Sheridan
Pictured: Marcus Sheridan.

He had this revelation while rethinking his own approach to business when his Virginia pool company, River Pools, nearly went under during the economic crash of 2008. Now, Sheridan’s practical approach to customer service, which emphasizes honesty and valuable information for customers, is featured in books, publications, university case studies – even a New York Times profile – and is the core of his latest book, They Ask, You Answer.

As he sees it, for about a century, in terms of influencing buying decisions, the salespeople did 90 per cent of the job with marketing and customer service splitting the other 10 per cent. “Today, often times, the sales team or sales person has zero impact on the decision or on the purchase. That is profound,” he emphasizes. “Marketing is the new sales, and customer service is the new marketing. Why is customer service the new marketing? Because we’re so stupidly prolific in how we use reviews and ‘shop with me’ videos or ‘test drive with me’ videos or all these things that we can do right now. You know, “play with me” videos in the music space. All these things, so much of that is contingent on the customer service that the person got after the fact, and so this drastic shift is quite interesting and needs to be recognized by all retailers; otherwise, they’re in significant trouble.”

What can a retailer do if their customers have mostly made up their minds before they’ve had any contact with them? Sheridan specializes is helping companies rethink their web personas, and that goes far beyond just the aesthetics and functionality of their websites or social media. There are five pillars of customers’ buying decisions today, Sheridan says: Cost; Drawbacks; Comparisons; Reviews; and What’s Best.

Satisfying these five interconnected elements is really about two things: honesty and usefulness. Even simpler, it’s about answering the questions customers have with unbiased information and comparisons.

“The reason why people are so attracted to customer reviews on those third-party sites is because they’re willing to look at both sides of the coin. So let’s look at music for a second, and let’s look at a guitar. So if you’re selling a guitar and you’re smart about it – and you’re producing a video or an article or review of the guitar – well it’s dumb to just say why it’s awesome, but most companies will say why it’s great and they only want to talk about the good elements of it,” explains Sheridan. “The smart businesses that are thinking like a Yelp [reviewer] are very open to saying, ‘Look, you’re trying to figure out if this Gibson XYZ model is a good fit for you, so let’s look at who it is and who it’s not a good fit for and by the end of this video, hopefully you’ll be able to decide if this is a great choice for you.’ That’s what the buyer wants. They want to hear the good, the bad, and the ugly. Most retailers don’t yet understand that and so therefore they’ve caused buyers to shift to third-party websites instead of the main hubs of the brands and retailers because they’re just not being unbiased enough.”

Sheridan points out that in the last two years, “for me” searches have exploded on Google. An example would be, “What is the best beginner acoustic guitar for me?” This is exactly the type of information customers want, and retailers are very well placed to provide it. They have the diversity of brands/products, experience, and expertise to answer these questions honestly. But that doesn’t mean they have to be negative; they just have to be honest using the facts they have.

Here’s a great example from one of Sheridan’s clients, Yale Appliance in Massachusetts. They sell home appliances like washing machines and dryers from all the major brands. Try googling “least serviced refrigerator brands,” and you’ll likely see a blog post from Yale Appliance. Their brilliant idea was to take the data from their repairs department and give customers the information they want. “What they do every year – and this is a huge annual article they do on their website – is they take the data from the year and they say, ‘We sold this many units from this particular brand – Miele, Bosch, GE, whatever – we sold this many units, we went on this many service calls, and therefore here is the percentage of units serviced.’ You can see the most-serviced and the least-serviced appliances that they sell,” Sheridan explains. “Now, does this piss off the vendor? Well maybe it does. Now, if the vendor is doing well, maybe it doesn’t, but you see, Yale has released their fear of the vendor because they know they have all the leverage. That one article gets read 50,000 times a month. A month! I’m not exaggerating. They were willing to do things that nobody else in that retail appliance space was willing to do.”

And that customer-focused article doesn’t just generate online traffic; it generates sales. By being totally transparent, Yale Appliance transformed their business.

During the NAMM U session, Sheridan revealed that Yale Appliance had $37 million in revenue in 2011 and hit $85 million in 2016 while spending $700,000 less per year in advertising. They grew from one store to two and their margins are up five per cent. They can account for at least $10 million a year in revenue coming from people who first visit the website – and they don’t do any e-commerce.

So customers want transparency and honesty in comparisons, reviews, and drawbacks. But what about the other two pillars, cost and what’s best?

Cost is about more than slapping a price on something, though not showing a price creates uncertainty and customers hate that. (Just think of how you feel when you look at a restaurant’s menu online and there are no prices.)

“Nobody has talked about the need to discuss costs openly as much as I have over the last seven years. It’s been one of my major points of conversation, but it’s always coming back to this: buyers don’t like to be embarrassed and they don’t like to feel stupid. They don’t want to make a mistake and so they need to understand parameters. They want to know what drives the cost up, what keeps it down, why are some companies or brands expensive, and why are others cheap? This is what they want to know,” says Sheridan. “So it’s no different than I might start off playing guitar and the guitar that I get is $500 and then after I get into it, the guitar I get might be $1,500, and then once I get really serious about it, it could be $5,000. But each time I do that, I go through another process of saying, ‘OK, help me understand the parameters. What should I be looking for? Why is this one $5,000 and this one $4,000? I just want to understand.’ This is what’s most important about price – not so much the specific number. Ranges matter a lot, but ranges in context of why is what we need to be willing to talk about, and not be so stinking embarrassed about it!”

The last pillar, “what’s best,” is, like much of Sheridan’s advice, about understanding the psychology of customers’ web search behaviour. “When we search for things, we always like to know what is at the top of the food chain and work our way down. We don’t start at the bottom. So in other words, you’ll never search for ‘worst guitars for beginners.’ Nobody has ever searched that phrase, ever. They’ll search for ‘best acoustic guitars for beginners,’” he explains. “Once you’re able to see what the best is, you’re able to work off that point and say either, ‘I can afford it; it’s a good fit,’ or ‘It’s not.’ But at least we want to know what that top looks like so we can work our way down.”

To boil down Sheridan’s approach to shaping a retailer’s web presence, it’s about being in the mindset of a customer searching Google. If they’re looking for a product, what questions will they have? Now answer those questions honestly. It’s that simple.

END

Michael Raine is the Senior Editor of Canadian Music Trade