Nice Companies Finish First

an interview with
Peter Shankman Entrepreneur, Author

PeterShankman TVThe proper German pronunciation of my last name is actually “nicer” as is in “nicer than the other guy.”  It is little wonder then that I have a natural predisposition towards nicer people, especially people like Peter Shankman who is championing the cause of being nicer on a global scale.  I was lucky enough to have a video interview with Peter at the IBM Smarter Commerce Summit from which I pulled the Q&A below.

I think Peter makes a really compelling case for why niceness is not a ‘nice to have’ component of your go-to-market strategy but instead could become a ‘must have’ element to gain competitive advantage.  Importantly, Peter says niceness needs to start with the CEO and then permeate the organization.  Let me know if you think there’s a seat in the boardroom of your company for a Mr. Nicer.

Drew Neisser:  Tell me about your new book, Nice Companies Finish First: Why Cutthroat Management Is Over.
Peter Shankman: I realized when I sold my last company that the reason the company did so well and was purchased was not because I had an e-mail newsletter, an e-mail mailing list but it was because I was nice and I had a personal relationship with all 250,000 people on this list.  It sounds crazy but I realize that nice was actually the reason the company did so well.

Drew Neisser: Wait, you had a personal relationship with 250,000 thousand people?
Peter Shankman: It sounds crazy but you know when was the last time you were on a newsletter mailing list that came from a person?  You know every corporate mailing newsletter comes from “do not reply”, mine came from from the day I started to the day I sold it.

Drew Neisser: I got some of those [HARO] e-mails. So then what?
And so people would reply to me, “I know this won’t go to the owner but…” and I’d reply, “Oh, actually it did, how can I help you?”  [Seeing the power of being nice] I spent the next two years really studying and interviewing companies from Fortune100s all the way down to mom-and-pop’s. We found out that the companies that focused on nice, focused on treating their employees nice, the customers nice and their clients nice, treating the environment nice, actually wind up doing anywhere from 10 percent to 30 percent higher revenue than companies that had that sort of 1980s Gordon Gecko mentality.

Drew Neisser:  When it comes to being nice is this something that companies can systematize or is this more about random acts of kindness?
Peter Shankman: It’s a little bit of both; it has to start from the CEO.  CEO has to understand that being nice for the sake of being nice is the greatest thing in the world, that’s what people want to do, but let’s face it, that doesn’t necessarily generate revenue.  The concept of being nice for a company really comes in two parts.  You want to be thought of as nice, no question about it, you want to do nice things, because this is a good thing to do, good karma and all that.  But what we found in the book is that the more you do nice things the more consumers actually look at it, and say “okay you know what, as a customer I was treated really well by this company, I want to tell my friends to use this company as well.”  And so what we found out is that when you combine being nice for the sake of being nice with being nice because it is profitable, you wind up making your stockholders happy as well as the customers, the [vendors] and the employees.

Drew Neisser:  Who are some of the companies that you found doing nice things?
Peter Shankman: We found a food truck out there where one day a week for an hour, they give away the food to the homeless people, just because it is the right thing to do.  There is a dry cleaner that if you are homeless and you have a job interview, you can bring [your clothes] and they will dry clean it for this job interview for free. My favorite example is when Morton’s steakhouse jokingly met me at the airport because I jokingly tweeted, “I want a steak” and they showed up at the airport and that generated double-digit revenue for them.

Drew Neisser: Amazing. Tell me more about the Morton’s example.
[After seeing my tweet Morton’s social team realized] he comes here a lot, he eats a lot of steak and so let’s do something nice for him.  And I was so blown away [that they showed up at the airport with a free steak dinner that] I told my friends and two days later I’m on the ‘Today’ Show, and they had double-digit revenue, six months after that.  It is incredible –double digit revenue growth, from showing up at the airport because some guy jokingly tweeted about it.

Drew Neisser: So let me play CMO for a moment and ask how do you scale that?
Peter Shankman: You don’t have to scale that, not everyone needs a steak at the airport.  You can do something that when you show up, when you make a reservation, at Morton’s they say hey, it is a special occasion?  And if it yes, it is my mother’s birthday, oh what’s her name?  Nancy.  They walk in, “Happy Birthday Nancy”, on the menu.  It’s this little, tiny things that really make you come back.

Drew Neisser: So we have this logo behind us from the IBM logo, Smarter Commerce Conference, so how does nice and data, and big data come together?
Peter Shankman: That’s my favorite part, we have so many tools now and you can know everything about your customer before they walk in the door.  But it is not enough just to know everything about the customer; you have to learn how to take advantage of that. We’ve worked with hotels to do this.  You can determine when a person’s walking in to check in, are they frazzled?  You know, are they tired?  If they’ve had a long flight, you can see things in their body language. You can look at what they are saying online, look at what they are talking about, what are they posting–Are they angry? Are they happy? Are they sad?  And if they are happy make them happier; if they are upset, make them happy.  The greatest thing in the world is when you go to a hotel that you don’t expect to be treated [royally] and they do something out of the ordinary like they have a hot towel, anything like that, it really is amazing.

Drew Neisser:Now this phenomenon of niceness certainly probably parallels the rise of the service economy, what are you — how does an auto manufacturer — they make hard goods, how do they do nice?
Peter Shankman: When I worked at America Online, that was my first job out of college and it was also my first job in a big company.  At that point I think they had 1800 employees and everyone had to work, in the tech-support or sales & marketing, because you know sales customer service group once for a full week before they start at their job, that’s how they learnt about the customer and things like that.  And my first thought was, “Oh God, I have to work at customer service, this is going to suck.”  You know what they did every Friday night, they backed up a beer truck, to the front door of the building, and they give out beer, and they give out soda and you can have whatever you wanted and the concept of treating the customer nice translated.  You know if you are a big company, if you are an auto-manufacturer, well, are you treating your employees better than GM or Ford? You make [employees] want to take pride in their work because they love what they do.

Drew Neisser: So niceness starts at home.
Peter Shankman: It really doesn’t — it has to start with the CEO, if it doesn’t start with the CEO, there’s no point.

Drew Neisser: Got it.  So I’ve got a group of CMOs here; do I get them to put a new line item on their marketing plan called Being Nice?
Peter Shankman: You’d be amazed; you can drop 30 percent of your marketing budget, simply being nicer. Here’s a perfect example — I was staying at a hotel in Dubai, three months ago.  I get to the hotel at 6:00 pm, I’ve been out at meetings all day, I get back to my room, it’s been cleaned and there’s note, “Mr. Shankman we noticed that your toothpaste is running low, we went to the store and replaced it with the same kind you use, we thought it would make your day easier because we know how busy your schedule is.”

I was floored by that; took a picture of it and then posted on Facebook. I’m leaving two days later, the head of PR for the hotel, comes out to me, ‘Mr. Shankman just want to introduce myself, we were able to trace back in the last three days, three reservations that came in from your photo.’  And I’m thinking to myself, okay, and how much I paid for my room?  Three reservations, freaking average of three days, that 39 cent tube of toothpaste netted them probably $12,000 to $15,000 in reservations.  That is your line item.

Drew Neisser:  Is every hotel in the world now asking you to come visit them?
Peter Shankman: You know what it is, it’s not even about — it’s about treating every employee — every customer not like they are me, but like they are anyone.  The people in the back of the bus on an airline, don’t expect to board first or have their luggage come out first, what if once in a while you do?

Drew Neisser:  So how does a CMO look a CEO in the eye and say, you know what, we are going to stop talking about “Price”, we need to start talking about “Nice.”
Peter Shankman: Well, you don’t have to stop talking about price, but you can start being nice.  At the end of the day, what the CMO has to look at the CEO and say, ‘You know what; we’re going to do this, because it is going to generate more money and is it the right thing to do.’ Maybe you want to hear that as a CEO, maybe you don’t, but I’m telling you it’s is going to generate more money, and I’ve never met a CEO in my life who believes that cool trumps revenue.  So if you come back with the concept of this is going to make more revenue, they’ll listen.

Drew Neisser: And are there tools to measure nice?
Peter Shankman: No question about it, I mean the simplest thing to measure nice — and IBM does this phenomenally is just measuring sentiment. As a customer service society, we expected to be treated like crap.  Treat your customers one level above crap, doesn’t even have to be good, just one level above crap and they’ll talk about it.  Go out of your way to do something amazing, they’ll share it with the world.

Final Note: this isn’t the first time I’ve discussed the power of being nice.  In this blog post from 2008, I reference being nice on a list of 5 characteristics that make for great client / agency relationships.  That post also mentions Linda Kaplan Thaler and Robin Koval’s book called The Power of Nice that discusses this topic way back in the pre-social media epoch! 

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