Mar 6, 2021
In this episode, I interview one of the best investors that any entrepreneur could ever hope to have. His name is Karl Huish, and he was one of the primary investors in Adoption.com before we sold it.
Karl is the managing director of Bela Flor Communities, a real estate development company. As an investor and board member, he participates in venture capital investments in a variety of fields. He was the founder and CEO of a risk management firm, which was sold to a public company. He was the founder and CEO of a turn-key asset management platform for 401(k) and retirement plans, which was also sold to a large private company.
Karl started his career practicing corporate and transaction law. He has a J.D. from the University of Chicago Law School, and a B.A. (Economics) from Brigham Young University. In addition to a law license (now inactive), Karl has previously held licenses as a CFP (certified financial planner), Series 7, 6, and 63 securities licenses, AIF (accredited investment fiduciary), and general insurance licenses.
Did you know that 97% of consumers read online reviews (Source: Bright Local) and 86% of consumers would pay more for a service provider that has high ratings and good reviews (Source: Software Advice)? In today’s episode, Karl and I are going to discuss secrets to succeed with online reviews in an untrusting world.
Karl Huish and his family used to put together gift baskets and give them away around the holiday season to contribute to the holiday spirit. In previous years, people had been very accepting, receiving the baskets with a lot of gratitude. It was a joyous event for both the Huish family and the recipients. In recent years, Karl and his family have stopped giving them out. They were finding that people were less and less receptive to the generous gift. Since these recipients didn’t know Karl and his family, the recipients did not trust Karl’s family.
In recent years, our society has become far less trusting of people we do not know are credible. We’re wary of unknown people who want to give us a gift. Before buying many products we look through online reviews. Many businesses have found that our potential customers don’t trust what we say about ourselves, and these businesses are striving to find more credible and effective ways to build trusting relationships with potential clients. In this episode, Karl and I talked about online reviews and how they can help us create that trusting relationship.
Here are some of Karl’s thoughts on credibility and reviews:
95% of people trust recommendations from others over branded content, even if they don’t know them personally. (Source: Josh Hager, Top Influencer).
In order to use reviews to build trust, our companies need online reviews. Unfortunately, most customers only give reviews if they are extremely happy with a company or extremely unhappy, but 97% of consumers read online reviews (Source: Bright Local).
One of the best ways to motivate customers to write reviews is to simply ask them, but what is the best way to do that? Here are a few ideas on how to ask for reviews:
The most common way to ask is in person, right after the customer has received the product or service. If a customer gives a compliment about the company, employees can easily ask them to write what they’ve said on a review platform of their choice. We can also ask questions like “Did you find everything you were looking for?” or “How was your experience in our store today?” to facilitate conversation and provide an opening to ask for a review.
If there isn’t an in-person interaction, we can send an email or make a phone call after customers receive the product or service and are feeling the happiest about the product or service. The company ThriftBooks does a great job of keeping this simple. A few days after the product is delivered, customers will receive an email asking them to rate the produce and service. The email has options for one through five stars and by clicking a rating the customer is taken to a review site where their rating is already in place and there is a space to share more details about their experience.
Another simple way is through SMS. Most people have their phones with them constantly and 56% of all online reviews are posted from mobile devices. Sending a quick text with a link to a review site is an effective method for gaining more reviews because it’s easy for customers to leave them.
Keeping our review requests simple will encourage more customers to leave reviews. If customers have to click through several pages or read a lot of information, many will likely give up before they finish the process.
2. Monitor Online Reviews
“Feedback is a gift. Ideas are the currency of our next success. Let people see you value both feedback and ideas.” -Jim Trinka and Les Wallace, Authors of A Legacy of 21st Century Leadership
When Karl and his wife went on a trip to Italy, they stayed in a hotel where the air conditioning wasn’t working. To help cool the rooms, the staff had opened the windows, letting in a lot of mosquitoes. Within ten minutes of being at the hotel, Karl’s wife was ready to write a negative review. She did, giving the hotel one star, and five minutes later they got a call from the hotel’s management telling them that they saw the review and asking what the hotel could do to help. They brought fans and did the best they could, explaining the situation with the air conditioner. Because the hotel was monitoring their reviews, they were able to see that a customer needed help and respond, resulting in Karl's wife changing her rating to a four-star rating.
"Most people in the world are fair-minded. If you do the best you can, are honest with people and upfront with people, and explain the situation, even if the result is not optimal, people will accept it. People will generally say, ‘I get it, you're doing the best you can.’ They will not be highly critical.” -Karl Huish
“Be quick with service in a way that's authentic, real, direct, and timely. All those things make a huge difference." -Karl Huish
We can learn another lesson about immediate responses from the experience of Karl and his wife. The hotel had a system in place to quickly identify negative reviews and then immediately take action to resolve the situation. This hotel responded to the review in person within five minutes. That’s really impressive. If they had waited until the next day it would have been too late, and there would have probably been very little chance that the review would have been changed. Immediate responses are much more impressive and have a “wow” factor because most businesses don’t do that.
If you can deal with it quickly and show exceptional customer service in response, you can often completely, or at least to a great extent, remedy that negative review or that negative situation.
The employees who responded to that negative review also seemed personally invested in the situation. Karl speculated that there was money at stake for the individual employees along with the hotel in general. We can incentivize our employees by giving things like spot bonuses for those who were working when the company received five-star reviews. We can also take this in the opposite direction for the employees on staff when the company receives one or two-star reviews. Either way, this type of system will help align our team priorities with our company priority of increasing 5-star reviews. It will ensure our employees have a personal stake in the outcome, and it will drive them to give the very best customer service they can.
Customers know the power of reviews; especially the power of a bad review. So what do we, or our employees, do when a customer threatens to leave a bad review and demands something unreasonable in return?
Firstly, we want to do everything we can to not create situations where customers could become unreasonable. Be upfront with our customers when there is a problem and don’t make promises that the company can’t keep. Set good expectations.
There are situations that aren’t preventable, however. In these instances, we want to listen to the customer and make sure we understand the problem. This will help the customers to feel heard. Steven Covey taught us to “Seek first to understand before seeking to be understood.” Once we think we understand, it is often good to explain to the customer what you’re understanding is of their problem to check if we are understanding correctly. Feeling understood can help diffuse a lot of the negativity.
Once the customer feels we understand their perspective, we can calmly explain our situation and try to solve the problem. Forbes advises to “ask [the customer] what [he or she] feels should be done or put forward your own fair and realistic answer to the problem. In most cases, that’s all the customer is looking for—and may result in providing some degree of satisfaction.”
As part of the real estate business, Karl has seen a shift as developers have started transitioning from buying land, building on it, and selling it to buying land, building on it, and holding onto that property and the revenue stream connected to it. Sometimes the answer is to hold onto what we’ve built. This goes for physical assets as well as digital ventures.
More and more businesses are turning to recurring revenue streams. For example, IDC predicts that by 2022, 53% of all software revenue will be purchased with a subscription model. One business Karl has experience with didn’t create a recurring revenue model. Twenty years later they looked back and regretted it. Another business put all their energy into recurring revenue streams and they were very successful for it. Every business should evaluate whether there are recurring revenue streams that can be built into the business. Recurring revenue streams make it easier to plan, create higher margins and more predictability, and provide a better lifestyle with less stress from an owner’s perspective. Recurring revenue streams often also help companies to sell for a lot more money.
If you enjoyed this interview and want to learn more about Karl or connect with him, you can find him on LinkedIn at https://www.linkedin.com/in/karl-huish-72276a114/
Thank you Karl for sharing your stories and wisdom. Here are some of my key takeaways from today's episode:
If we desire monetization we have never before achieved, we must leverage strategies we have never before implemented. I challenge each of us to pick one thing that resonated with us from today’s episode and schedule a time to implement it to help achieve our monetization goals.
Do you have any tips and tricks about increasing 5-star reviews? Please join our private Monetization Nation Facebook group and share your insights with other digital monetizers.