The Mentality Behind the Magic Touch, by Derek Sivers

business customer service derek sivers entrepreneurship marketing mentality

Derek Sivers is holding a one-time class to teach you the "magic touch" in businesswith examples, war stories, and lessons you can apply right now to do better by your customers and profit as a result of it -- and all the proceeds will go to charity.

The class will be on February 19th at 5PM California time (8PM East Coast). You can find out more at GiveGetWin by clicking here.

The Mentality Behind the Magic Touch; Derek Sivers interviewed by Chiara Cokieng

Derek Sivers sold CDBaby for $22 million dollars in 2008. In this interview, he explains what he's been doing now, how he's engaged with his new projects, and -- most excitingly for business owners and entrepreneurs -- the mentality behind the "magic touch" he had that made CDBaby so loved by its customers, and a huge part of how it grew so quickly. Here's Derek --

In 2008, when I sold CDBaby, I was about to start a new company immediately. Literally the day after I sold CDBaby, I was ready to start my next company. I incorporated it, I started programming, got a few months into building it, and then realized that if I were to do that, I wouldn’t be making any real change in my life.

I would have just carried on doing things the same way without any real change.

I felt I had to unlearn some of what I assumed were facts for the previous 10 years.

I spent the next 4 years from 2008 to 2012 scattering all my habits. I’d say yes to whatever I used to say no to, and no to whatever I used to say yes to. I changed everything I could on principle, to try to scatter my habits, and that brings us all the way up until last year, 2013.

I finally felt like I’m done unlearning and scattering, I’m done filling my life with random distractions, and ready to put my head down and get back to work now with my new perspective.

“Changing and unlearning…”

I knew it at the time, and I can see it even more clearly now, but even at the time I knew I was intentionally doing anything I could to shake up my old patterns. What I didn’t realize until later, in hindsight, is even all of this scattering or shaking up or whatever you want to call it, a lot of it was just fear of focusing on the work I really wanted to be doing all along.

So now, here I am in 2014, doing exactly what I started doing six years ago. But I finally reached the point where I can’t not do it any more. For six years, I distracted myself with everything I could — traveling, “let’s go to India!,” “let’s go here!”, learning Chinese, meeting with everyone who said they wanted to meet with me — these were all very good distractions. It was good in that I see the world in a real way now, but a lot of it is fear and the Resistance that keeps me from what I wanted to be doing.

About a month ago, one of my best friends died suddenly, totally unexpectedly. He was riding his bike in the bike lane on Sunday morning, and a car swerved into the bike lane and killed him instantly. He was one of the smartest people I knew, but he never wrote down his thoughts, philosophies, and observations. You could glean little bits of wisdom from him if you were hanging out with him in person, but I think it’s a big loss that he died without writing it down.

Different people react to death or loss in different ways. For some people, if a good friend dies, they want to go spend their time traveling for a while or something. For me, it had the opposite reaction. I realized I could die at any moment, so I need to write down what I learned and I need to make these ideas happen that I want to make happen.

It got me more focused than ever before.

“The magical touches…”

Derek became famous for having “magical touches” at CDBaby, like their famous confirmation email when you bought a CD from them. This is what it said —

“Your CDs have been gently taken from our CD Baby shelves with sterilized contamination-free gloves and placed onto a satin pillow.

A team of 50 employees inspected your CDs and polished them to make sure they were in the best possible condition before mailing.

Our packing specialist from Japan lit a candle and a hush fell over the crowd as he put your CDs into the finest gold-lined box that money can buy. We all had a wonderful celebration afterwards and the whole party marched down the street to the post office where the entire town of Portland waved ‘Bon Voyage!’ to your package, on its way to you, in our private CD Baby jet on this day, Sunday, December 11th.

I hope you had a wonderful time shopping at CD Baby. We sure did. Your picture is on our wall as “Customer of the Year”. We’re all exhausted but can’t wait for you to come back to CDBABY.COM!!

Thank you once again,

Derek Sivers, president, CD Baby”

Here’s what Derek had to say about the mindset behind keeping it fun and enjoyable —

At the time, it all just feels like regular human common sense. It’s not trying to be cute so much; it’s just the way that two friends talk with each other in real life. We’re not so formal. We make jokes, we say sarcastic things to be a smartass, and I think it’s a shame that people can be very charming and full of life and personality, but as soon as they call something “business” they clam up, get all formal, and taking all the fun out of it.

As if fun has no place in business! You can meet someone with a very dry business, but they’re very fun if you’re having drinks afterwards in person.

I never wanted to keep that separation. For me, it’s just pulling your regular human personality into your business dealings, too.

You see this in small businesses that don’t take themselves too seriously. I always have this role model of the little shacks on the beach, where there’s a little hut that’ll rent you fins and a snorkel and a mask for $6.

You pay them six bucks, they give you the snorkel and fins and mask, and you go swimming.

I look at those huts as my business role model. There’s no Terms and Conditions, Privacy Policy, Human Resources Department, or all of these formalities that people think they need once something is called “Business.” They think they need to be so fucking formal.

You look at Jim and Bobby’s Snorkel Shop. They don’t need it. Why do I? Why do I have to be so serious and formal because it’s business?

“How do customers react to that?”

I’d say that 80% of customers read their email, chuckle a little bit, and hit delete anyway. 19% looove it, and think we’re awesome and hilarious, post it on the blog, and tell all their friends that it’s the coolest email confirmation they’ve ever seen, say “this is so cool, I’m buying everything from you forever”… and then 1% maybe gets offended and doesn’t get that it’s a joke.

Our confirmation email said in there, “Your picture is on our wall as Customer of the Year” — this went out to 50 to 100 people per day. And then once a week, someone would say, “How did you get my picture?! This is creepy and weird. I’m calling the police!”

We’d explain it was a joke. I was running a little record store in America, but I guess it’s different if you’re a law firm in Hong Kong. Maybe they don’t want you to send goofy and funny “just kidding” type emails. But even as a law firm in Hong Kong, I don’t think you need to make people go through inhuman formalities you wouldn’t do to a friend; why would you do them to a customer?

“If you were at a law firm in HK, how would you do it?”

It would start from the times that I needed to hire a lawyer, and thinking how it went. Think about your frustrations when you walked into a business, and weren’t treated the way you wanted to be treated. Whether it’s the waiting room, or how people are kept waiting… even something small like picking up the phone when it rings.

Every business has this voicemail thing where you get 25 different voicemail options. We’d always pick up by the second ring, no matter what. At one point, I had 85 employees, and 25 of them were customer service. Even when the first guy came into the warehouse came in at 7AM, pick up the phone. Even if you’re closing up at 10PM, pick up the phone. Even if you have to tell them, “Hey I’m sorry, this is Mark but I’m closing up, can I get your number and we’ll call you back?”

That was the single biggest reason people told us they loved CDBaby. Because we picked up the phone. It wasn’t the price, fancy promotions, our website, or anything else. The #1 reason people chose us over the competition is because we picked up the phone.

“Where did that come from?”

Common sense. Pick up the phone! Do you care about these people? Pick up the phone.

When the recording comes on, “Your call is important to us; please continue to hold…”

They’re lying. Your call is not that important, so they only hire 8 people instead of 28 people that they should hire, and make you sit around and wait for them for 45 minutes. It’s common sense; it’s not trying to be cute, charming, or rebellious, or anything else. It’s common human decency.

“How would someone start?”

You know what’s funny, I’ve been so immersed in cross-cultural the last year working on these Woodegg books, that my friend Wally in Singapore and many other people have told me of this. Wally is a native Singaporean, and he says: “We’re not taught to speak to anybody. You speak to your close friends and family, people in your inner circle, and then you just have transactions. When you go into the world to purchase something, you say the minimum words you need to purchase it. You call the dentist to make an appointment, you say the minimum words to get an appointment; you don’t chat with the dentist on the phone. Then I went to Australia to go to school and a guy said to me, ‘G’day mate, how are ya?’ and I panicked! It really took me a long time to understand this different American/European/Austrailian mentality of just chatting with people. It’s really weird, it’s really hard to get used to. It really took me a long time to get used to.”

I get it. I get someone coming from a different mindset and background. Someone starting a CDBaby type business in Singapore wouldn’t do something chatty. And if their customers are Singaporean, they might not get it either and wonder why you’re acting like an idiot.

If you’re stiff, you don’t want to say “Don’t be stiff” — but if there’s a gap between who the person is and how they’re acting in business, start closing the gap. People will appreciate a reminder they’re dealing with a regular human being.

Imagine how charming it would be if you called up a Big Business and they picked up the phone at ABC Industries said, “Hey, how are you?” and they said, “Honestly, not too good — I stayed up too late last night… but I made it here and got up, so I’m here for you.”

Imagine how endearing that would be. It would humanize the whole business. For just a second, they’d be human to you.

“How’d you learn this?”

I was in the music business, and it felt like being considerate to the person on the receiving end. It’s like, c’mon, it’s music. We’re not a bank. It’s music. It’s fun.

So I’d think about the musicians that would send out press releases or copies of their album to receiving stations. If you’re stiff and too hung up on yourself, you’ll put up a normal press kit, normal photo, and a cover letter like, “Dear Rolling Stone, here is our album. Please review it at your earliest convenience…”

But if you really put yourself in the position of Jeff who works at Rolling Stone and receives 400 packages per week, it’s actually inconsiderate to send another boring package. Jeff would really appreciate getting something out of the ordinary for his sake. Then you’ll send out and not be lumped in with the rest if you’re doing something shockingly different.

It makes strategic sense, because it benefits you to not do whatever else everyone else is doing. And it made sense for the person on the other end of the line. It helped that it was music and I was in America. And that helped with this approach.

“Does this apply to all industries?”

We’ve been talking about retail type businesses so far.

Here’s another example — someone sends you a survey where you get 11 questions that you have to rate their service multiple choice, click 1 to 5 how happy you were on the following 11 aspects. And then after you fill it out, they say “Thank you for your time.”

This is actually really inconsiderate. They’re telling you they really don’t care what you think; you have to bend your communications to them by answering 11 multiple choice questions. If they really cared what you think and are doing what’s considerate for you, they’d say, “How was it? Tell us? A real person will check out each of your answers to you and respond to you. You can email or call this toll-free number to tell us how your order went, and anything you wished to better.”

If the company really cares, they’ll be considerate enough to let the customer communicate in whatever way they want to, not filling out a stupid survey. That’s the company thinking from their point of view, not the customer’s point of view.

“We’re all self absorbed naturally — is it a big effort to put yourself in their shoes?”

It comes naturally now… I worked so hard at it. There’s a classic book from the 1930’s called “How to Win Friends and Influence People.” The title sounds evil, but I think the book really should be called “How to Be Considerate.” It’s a beautiful book teaching you how to be considerate. How to look at things from the other person’s point of view.

When I read this book, when I was 19 years old, it really blew my mind. I couldn’t believe that this was optional — not required in education! It matters so much more than Algebra or World History!

Once I really internalized the lessons in that book, everything in life became easier. The world started going my way more. You learn how to see everything from the other person’s point of view, and suddenly all the locked doors seem open to you.

It’s amazing what a difference it makes; that book changed everything. It’s been a personal focus of mine ever since. Even all my studies of the Woodegg books, wanting to understand the countries of Asia, now I was in a part of the world I didn’t understand, now I wanted to understand the Indonesian mindset, understand the mindset of someone who grew up in Vietnam, understand the value systems in Sri Lanka…

I wanted to see things from these people’s point of view.

“How do you start implementing this?”

It still should be whatever is best for the customer, from their point of view. Often, “being yourself” or “being the most likable and entertaining version of yourself” is the best thing to do. But sometimes, you have to suppress what you’re actually feeling to be what the customer needs. In this case, I think of the stereotype of the person at the front desk of a hotel.

In most places of the world, people at the front desk at the hotel are sweet, kind, and considerate. And they might be in a bad mood that day, but they don’t let you know it. They might not naturally be a nice person; they might just fake it.

I thought about that a lot when doing customer service. Somebody would email me with something extra they wanted done and my first instinct would start to get mad. “What do you mean you want us to do more work?! We did our job already!!”

Then I clicked delete-delete-delete, and started writing again: “Thanks for letting us know about this, we’d be happy to double down on the work. What else can we do?”

Sometimes I’d fake it, it wasn’t the real me, because it’s what the customer needed. That’s also important. The most important thing is whatever the customer needs, whether that’s the real you or not. Try to close the gap between the real you in business, if you think it would improve things and make you a more remarkable and fun-to-deal-with business.

“Examples?”

The one that comes to mind is, this was a difficult one. When I first started CDBaby, they didn’t understand that we were just an open service that sold any album you sent to us. Most of the music business works in a way that there’s gatekeepers, and you have to send your music to someone who listens and decides if you’re good enough to pass through his golden gates.

Very often in the early days of CDBaby, people would send in just one album and ask us to let us know what we think and if we’re good enough to carry it.

At first, I was just honest. “I got your CD, but didn’t listen because it’s not necessary — you’re in, just send us more copies and we’ll sell it. Send four more and we’ll put it up for sale.”

I did this for a year before I realized people were disappointed. People were like, “Oh, you didn’t listen? You don’t think it’s good? You sell anyone’s…?”

The next time I got someone’s opinion, I kind of lied. I’d put it on, listen a bit, and say, “I listened a bit, it’s pretty good, I’d be happy to sell it. Send us some more copies, I bet this could really sell.”

This would make people happier… and that, in the end, mattered to me more in the end than my person opinion. People face so much rejection, put music out into the world, get rejected… I thought, if I can make someone feel happy and put their music out into the world, that would help.

I’ve never told that story before, of doing the considerate thing instead of the bluntly honest thing.

“Do you see any other businesses getting this right?”

You asked me about times I was inspired by someone else’s business that I encountered. I so often remember these tiny little things. There’s a juice smoothie company in England, but the packaging on their little containers is so funny, even in places you wouldn’t expect. Like if you turn it upside down and look at the bottom of the container, it says something like, “What are you doing looking under here, you nutter?”

And I thought, “Oh, these people cared!” Of course, they could just pour juice into a container. But instead, they add the extra small cost to printing on the bottom to make people smile. It’s counterintuitive.

Think of the stereotype of the shortsighted very cheap “money money money money, now now now now” businessman. But it’s actually wrong, because that extra tiny bit of cost and care might make someone always choose your juice.

It might not make sense in the short term, but it wins loyalty.

Another example —refund policies. I don’t know if you heard the story of the U.S. chain, Nordstrom’s. They have an international reputation for having the most liberal return policy anywhere. The joke is that you could buy a shirt at a competing company, wear it for 10 years, and then bring it back to Nordstrom’s and ask for a refund, and they’ll do it.

When you first hear of this, people — especially people who spend too much time in Business School — say, “It won’t work, customers will take advantage of you, you’re going to get ripped off…”

And it might be true. But that’s shortsighted. Having a reputation for going to extremes to make customers happy, Nordstrom’s becomes a place that people like to shop and go out of their way to shop there. They feel safe knowing they won’t be ripped off or treated rudely at Nordstrom’s. Long-term, it’s a very smart policy. If you’re just looking short-term, it might not sound so smart.

It’s a common theme — at CDBaby, out of 85 employees, 28 were customer service. That was a massive expense, and people would have thought I was crazy spending that much on customer service, but I thought it paid off.

Shortly before I sold CDBaby, I had time on my hands for the first time in years. I had delegated out everything to be done, and I felt plateaued. I didn’t know what to do next. I could’ve taken the business a few different angles.

I emailed every single musician in my database — around 160,000 people — emailing them a three sentence email. “Hi [their name], I had some time on my hands for the first time in years. I have time to move CDBaby in any direction for the first time in years, what do you think? Yes really, let me know how I can help in any way and let me see if I can do that.”

Out of 160,000 sent out, I got something like 110,000 replies. Everything from three sentences to three pages long. It was amazing; I saved all of them and hired extra people to go through all of them. We systematized a bit to look for what words people said they wanted, but after a few hundred emails you realized people were asking for one of ten different things.

And it was not at all what I would have expected.

I had no reason to know that musicians wanted help booking gigs a lot. And I got to see the same words come up again and again, words I wasn’t using that I could start using.

The insights I got from that are what guided all the projects I’m working on even now. Reading thousands of emails — literally — from my clients, them opening their hearts.

Derek built CDBaby on excellent customer service, and the results really showed. If you're interested in learning from him, he's having a class on teaching this through GiveGetWin, with all of the proceeds going to charity.

Derek Sivers is holding a one-time class to teach you the "magic touch" in businesswith examples, war stories, and lessons you can apply right now to do better by your customers and profit as a result of it -- and all the proceeds will go to charity.

The class will be on February 19th at 5PM California time (8PM East Coast), so move quickly to get your spot -- you can find out more by clicking here.



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