Why Customer Service Buzz Is the New Marketing

Last Updated Aug 31, 2010 1:39 PM EDT

It used to be that angry customers simply called your company and complained loudly to whoever happened to answer the phone. They still do, of course, but now the Internet gives them a much more expansive forum on which to broadcast their views about your company. They're buzzing, and you had better be listening. Scary, isn't it? Not for Paul May, the CEO and founder of BuzzStream in Austin, TX, whose fervent belief in customer listening has allowed him to increase revenues by 30% a month and to operate with a minimal marketing budget (just $4,000 in two years).
BuzzStream makes software that helps marketing and public relations professionals manage word-of-mouth campaigns on the web. Subscriptions to the service range from $49 up to $2,000 per month. When May launched the company two years ago, he had some pretty firm ideas about the start-up process. "There are many ways to start a software company," he notes. "You can raise $6 million, hire 30 people, go into a cave and build software and hope you build the right thing. But the market moves too fast and you might spend a lot of money on something that doesn't meet people's needs." Instead, May and his partners built their software quickly and imperfectly with the intention of using customer feedback to tweak the product according to market needs. Here's how they did it:

Welcome every new customer. "Every person who signs up for a trial gets a personal email from me," says May. And he often calls new customers to say hello and to tell them that he's available if they have questions. May estimates that after the two-week free trial, between 30-50% of customers sign up for the paid service, depending on their specific needs. That's a pretty impressive conversion rate and May attributes it to the "high touch" treatment that trial customers receive from day one.

Listen to customers; iterate fast. "Virtually everything we've done in the past two years has in some way been driven by a customer," says May. Case in point: customer Jonathan Kay, who does public relations for Grasshopper, a provider of virtual phone systems, signed up for BuzzStream last summer but wanted the software to include a task management function. He emailed the company and said so. Within 24 hours, May called him. "Not only did he care about my feedback, but he listened to me and implemented features based on our discussion," says Kay. "When they exited beta and started charging money there wasn't a question that I was willing to pay them because they listened."

Turn grumps into evangelists. "When we first launched the company, we got a mention in Bruce Clay's SEO blog, and that was really influential," recalls May. But the mention led to a conversation on Twitter, initiated by a woman who "was beating us up a little" because she was unhappy that BuzzStream was not on GetSatisfaction, a public customer service forum. "We responded to her right away," says May. "The conversation migrated to email and then we met her at a conference." The BuzzStream team's persistence led to a highly positive post by the woman, Rhea Drysdale, on her blog, Outspoken Media. "From that one post, we got 150 leads," says May. "We turned a negative tweet into a nice chunk of leads."

Engage with customers publicly. By dealing with customer questions and complaints in open forums like GetSatisfaction and Twitter, BuzzStream sends the message that the company isn't afraid of addressing criticism head on. The public interaction also puts a little pressure on BuzzStream to solve problems quickly efficiently, which tells customers that the staff is confident in its ability to troubleshoot. And May is convinced that great customer engagement is a huge buzz builder. Zappos employs the same strategy with great success. "Instead of spending big money on marketing and focus groups, it's all about engaging with the customers and having them promote us," he says.

Do BuzzStream's strategies make sense to you? Do you think that customer service is the new marketing?

Bee image courtesy of Flickr user PaulS, CC 2.0