Fully 80% of companies say they deliver outstanding customer service, but only 8% of their customers agree. Clearly, there's a disconnect somewhere, and it's costing companies millions.

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Jay Baer aims to help organizations get customer service right. He is the founder of strategy consulting firm Convince & Convert and a well-known business strategist and keynote speaker. He's advised 700+ companies since 1994, including Caterpillar, Nike, and Allstate.

He's also the New York Times best-selling author of five books, including Youtility: Why Smart Marketing is About Help Not Hype and The NOW Revolution (co-written with Amber Naslund).

I invited Jay to Marketing Smarts to discuss his latest book, Hug Your Haters: How to Embrace Complaints and Keep Your Customers, a guide to creating customer service success. It's based on extensive proprietary research that Jay conducted with the help of Edison Research.

What Jay discovered about where, how, and why customers complain will have major implications for your business.

Here are just a few highlights from our conversation:

Start addressing customer complaints on social media, in forums, and on review sites, because the phone is going the way of the dinosaur (05:35): "Tomorrow's customers will look at the telephone the way we look at a butter churn.... I have two teenagers at home. They both have smartphones, but for them that's the worst name for a product ever, because of all the functions on that device, the one function they literally have no interest in whatsoever is the telephone. You can't force my son to use the phone. Now they'll text and they'll SnapChat and they'll Instagram and they'll Twitter. All of that, hundreds of times a day...but the telephone is not of interest.

"I refuse to believe that at some point they're going to be in business—out of school, in their first cubicle—and they'll be sitting there...thinking, 'You know, I have really missed out on the joys of telephonic communication. I've sort of missed the boat on this. Now I want to embrace this technology that my great-grandparents loved.' The game is over. If you have a 'call center,' you need to get with the program right now, because the folks answering the phone are going to have to find something else to do."

Haters come in different varieties ("on-stage" and "offstage") and each requires a different approach (07:56): "People who complain 'offstage' (legacy channels, phone, and email), they want, they expect, they anticipate an answer: 90% of the time, they expect a business to get back to them.

"Conversely, if people complain 'on stage' (social media, review sites, discussion boards), they don't necessarily expect an answer. What they want is an audience. What they want is group empathy. What they want is all their friends to say, 'Oh, that totally sucks, I can't believe that happened to you.' That's the dynamic that they're looking for. Our research found that only 47% of people who complain in public...expect a reply at all. This is a massive opportunity for businesses and why I wrote this book. If you hug those onstage haters—the people who you are frankly ignoring right now—if you actually answer them, it has a massive impact on customer loyalty and customer advocacy."

You need to answer every complaint on every channel every time (and you can) (12:50): "When companies say...they don't have enough resources to answer everybody online, that's categorically untrue. They just choose to not spend those resources.... Each year, globally, we spend about 500 billion [dollars] a year on marketing and about nine billion dollars a year on customer service. Now, this is despite the fact that you learn on the first day in business that it makes more sense to keep the customers you already have than to continue to get new customers and fill that metaphorical leaky bucket, But yet, nobody actually runs their business that way, even though we know that's the right way to run your business.

"When people say 'we don't have the resources,' I say 'you do have them, you just choose to not spend them that way.; And that is a choice, that is not a static phenomenon. You are choosing to ignore your customers because  you do not think it is worth the money to address them on line and that is wrong. It is worth it."

If your company's not monitoring and replying to posts in industry forums, you're missing out (big time) (26:50): "[Forums were] the original social media. Forums were social media 1.0, and the overwhelming majority of businesses completely and utterly ignore forums. But it's a mistake, because forums are where your best, most passionate, core customers hang out. If you sell cameras, your best customers are all over photography forums. If you sell furniture, your best customers are all over furniture forums. If you sell cars, your best customers are all over car forums, etc.

"It's where the true advocates for the brand actually interact with people who have a similar mentality. So businesses that take the time to actually participate in forums like that have a huge leg up on the competition."

To learn more about Jay, visit his website at JayBaer.com. You can also follow him on Twitter @JayBaer (but I'll bet you're following him already.) And be sure to order your copy of Hug Your Haters at HugYourHaters.com.

Jay and I talked about much more (including the monetary value of brand advocates, why prioritizing "influencers" isn't the right approach to customer service, and how puppy pictures contribute to social media success), so be sure to listen to the entire show, which you can do above, or download the mp3 and listen at your convenience. Of course, you can also subscribe to the Marketing Smarts podcast in iTunes or via RSS and never miss an episode!

Jay Baer's puppy, Marigold

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Music credit: Noam Weinstein.

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