Originally Published: June 17, 2010
The principles of Gary Vaynerchuk’s ‘Thank You Economy’
At this moment, Gary Vaynerchuk might be working on his next book, tentatively titled The Thank You Economy. He’s excited (but when’s he not?) and thinks this will be more important than his last book, Crush It!.
Vaynerchuk lays out his Thank You Economy ideas when he speaks, but hasn’t done a thorough job of connecting or elaborating on them. Presumably, this will take place in his book (which we’ll have to buy).
In the past, I’ve been critical of Vaynerchuk’s topic authority, but let’s ignore that for a few minutes. The message is still neat and someone would be speaking about it regardless.
Here’s the big idea: Give away stuff for free, build a community, engage with your community, and they will return the love by being steady customers.
Vaynerchuk gives away his video blog. He gives away his time by hosting ustream chats, and tries his damnedest to respond to every tweet and every e-mail he receives. His incredible time investment has been met with resounding success: the wine business exploded, and he became a rockstar in the business development arena.
The formula is hardly new, but Vaynerchuk has done the best job of executing it with emerging media.
While Vaynerchuk’s personal narrative is exciting, it’s also biased. All he had to do was apply a new marketing scheme to an already-successful retail front. Prospective entrepreneurs who want to crush it will quickly discover that they have to build their businesses from the ground up. And even before that, they have to find niches that aren’t already dominated by someone else, lest they spend years working tirelessly to overcome network effects.
To his credit, Vaynerchuk has never said that the road is easy. He stresses that time and perseverance are essential to success in the Thank You economy. And the main idea is still valid: if you offer great service and truly care about your audience, you’ll be successful. The time, energy, and effort you put in to serving your customers will be eventually return in spades.
Giving something and getting something back is the core of reciprocal altruism. Therefore, reciprocal altruism is the cornerstone of Vaynerchuk’s Thank You economy.
There is something else behind Vaynerchuk’s wild success. He has a great personality: people are addicted to it. He’s passionate and enthusiastic in everything he does. Would people pay attention to him if he was dry, slow, and looked like he hated what he was doing? Of course not!
Passion is the X factor for Vaynerchuk, and it’s the thing that people miss when they try to apply Crush It! principles to their business. You can’t just give things away and expect money to come rolling in, you need to be passionate about giving them away. You can’t just serve, you need to be passionate about providing service.
Update on February 3, 2011
Jeremiah Owyang tweeted this morning, “If the thank you economy materialized, our hardworking waiters and waitresses would be rich.” Owyang’s comment reminded me of this post, so I decided to do some follow-up.
Turns out that Gary finished up his book and it is now available for pre-order on Amazon.com. Here’s the description:
The Thank You Economy is about something big, something greater than any single revolutionary platform. It isn’t some abstract concept or wacky business strategy—it’s real, and every one of us is doing business in it every day, whether we choose to recognize it or not. It’s the way we communicate, the way we buy and sell, the way businesses and consumers interact online and offline. The Internet, where the Thank You Economy was born, has given consumers back their voice, and the tremendous power of their opinions via social media means that companies and brands have to compete on a whole different level than they used to.
Gone are the days when a blizzard of marketing dollars could be used to overwhelm the airwaves, shut out the competition, and grab customer awareness. Now customers’ demands for authenticity, originality, creativity, honesty, and good intent have made it necessary for companies and brands to revert to a level of customer service rarely seen since our great-grandparents’ day, when business owners often knew their customers personally, and gave them individual attention.
Here renowned entrepreneur Gary Vaynerchuk reveals how companies big and small can scale that kind of personal, one-on-one attention to their entire customer base, no matter how large, using the same social media platforms that carry consumer word of mouth. The Thank You Economy offers compelling, data-driven evidence that we have entered into an entirely new business era, one in which the companies that see the biggest returns won’t be the ones that can throw the most money at an advertising campaign, but will be those that can prove they care about their customers more than anyone else. The businesses and brands that harness the word-of-mouth power from social media, those that can shift their culture to be more customer-aware and fan-friendly, will pull away from the pack and profit in today’s markets.
While the book sounds groundbreaking, we won’t learn anything we don’t already know. Technology lubricates word of mouth, and customer service is key to creating an experience that will be talked about. That’s all the Thank You Economy principle boils down to.
One part that bugs me is ‘data-driven evidence’. To my knowledge, research into electronic word of mouth is pretty far behind what Vaynerchuk will be talking about, so the only data we are likely to see will be a case study about Zappos accompanied by visionary quote from the CEO and a revenue graph.
Getting back to Owyang’s tweet, a very interesting point is raised. You can create an experience worth thanking, but your income potential is determined by the kind of product you provide. Great waiters may inspire their customers to thrown down 30% tips, but it won’t be enough to move to Park Avenue. Most businesses have hard ceilings, limited by the time in a day or the number of people who can fit in the building. This introduces a caveat for the Thank You Economy: It works best when your revenue stream can scale. That’s not to say it’s a bad idea, though. Creating great experiences and providing outstanding service will still offer friendly returns, and can probably lead to better things down the road.