Scott’s back, with a Marketing 101 piece on how Great Customer Service is Great Marketing. I couldn’t agree more.

Back in 1998, when we decided to launch BlackStar, we had $10,000 from our MusicDatabase deal with NTK. I coded the site, Jeremy designed it, and Darryl cut all the deals. We had one salaried staff member – Anni, the best customer care person in the universe. We certainly had no money for advertising for at least 6 months, and even then we could only stretch as far as ads in Empire and Total Film – hardly the media saturation we embarked on when we suddenly found ourselves with millions in VC money a couple of years later. But we maintained a 35% month-on-month growth rate for each of those first 18 months, and I’d have no hesitation in saying that our Customer Care was the number one factor behind that.

What many people seem to miss is that there are two main types of customer service – particularly in a web environment. There’s both the “dealing with customers who contact you”, and the “making it so that customers don’t have to contact you”. Amazon, who have the chutzpah to declare themselves as the most customer focused organisation on the planet, are great at the second, but terrible at the first. If you slip through the cracks of their system, they’re lost. Several times I’ve been engaged in a cycle of emails with service staff who just don’t understand my problems and assume I mean something completely different because they know how to deal with that.

At BlackStar we bootstrapped our entire system, only expecting it to actually work 90% of the time, and so we gave our care staff wide flexibility in what they could do to solve problems. Whilst it might seem that this is a very expensive approach, it actually saved a lot of money. The last 10% of any system always accounts for 90% of the development cost, so we were able to implement things in a rough and ready way, put them live, deal with the cases where they didn’t work, and only bother solving them (well, eliminating 90% of those cases) when they were happening too often. This allowed us to make changes to our site and back-end systems practically in real time, enabling us to actually grow at that 35% per month rate.

In the process we not only built the best systems around (it only ever did what we and out customers actually needed it to do – not lots of ‘cool’ functions that someone had dreamed up and spent a year designing and implementing, only to find that no-one used them), but led to an approach to customer care that led to us winning several major awards, getting tons of press coverage, and having the happiest customers in the industry, who would gladly recommend us to everyone they knew.

The systems never worked “correctly” all the time, so there was never any attempt to hide behind them. Instead everyone was trained to just do whatever it took to sort out the problem. If that meant going down to Virgin or HMV and buying the video off the shelf to send to the customer, then that’s just what we did.

If it meant giving a customer a free video each month until our credit card processing abilities could include American Express, well, then that’s what we’d do. (It cost us about £30, forced us to sort out an obvious deficiency in our system, and turned an irate customer into a fan).

If it meant sorting out a problem that a US visitor had in getting the instruction manual for their home gym that they’d bought from Sears, well, we even did do that too. (The person never became a customer, but we got a nice write up in the Wall Street Journal out of it!)

We actively saw customer care as our major marketing tool. And it worked. I think many small companies know this instinctively. Word of mouth is the only marketing they can get. Big companies seem to forget it though. The current incarnation of BlackStar certainly has.