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Ray: Hi, this is Ray Stendall, publisher of Customer Engagement Magazine. I’m so happy and pleased to have Shep Hyken as my guest. Shep Hyken is a customer service and customer experience expert who has talked to and consulted with many enterprise companies around the globe. He is the author of nine books and a real authority in the area of figuring out how to build customer loyalty for life.
Shep has a lot of great ideas that we’re going to be covering in this interview. We’re going to get into some specific methodologies, some how-to advice, and some strategies that are going to help you move forward as you build stronger relationships with your customers, build fans for life who are involved in all aspects of how you build and offer your solutions to the marketplace. Shep, thank you so much for being part of Customer Engagement Magazine.
Shep: Ray, thanks for having me. I’m excited and honored to be here.
Ray: Thank you so much. Let’s get started with talking a little bit about you and some of the work that you have done in the industry to help companies move closer to the dream of having loyal advocates who want to work with them day in and day out.
Shep: Sure. How far back do we want to go, because we can go all the way back to the very beginning? In 1983, I started my business. Actually, if you want to go back even further than that, you can go back to the first business I ever had at age 12. I was a birthday party magician. I decided I was doing magic when I was 10 or 11. I somehow got hired for $16 to go out and do this birthday party. When I came back, my mom said, “What are you going to do next?” and I said, “What do you mean?”
I think I knew what she was getting at, so I said, “I’m going to go write a thank you note,” and she said, “Exactly right.” Little did I know that from the time I could actually start to write and my mom started having me write thank you notes for any time anyone did something nice for me, that was really the start of my customer service training.
At age 12, when I started my business, I’m writing thank you notes. My dad is telling me, “Make sure you show up early, stay a little bit late, give that customer (that mom and dad that hired me) more than they were expecting, and follow up with a phone call to make sure they were happy.” All of this goes toward customer service. This is when I was 12, 13, or 14 years old.
Think about what most companies do today, whether it is a B2C or B2B. They’re involved in some of those same activities; trying to give more value to the customer, trying to make them feel as if they’re appreciated, and making sure they’re confident that who they hired is the right person. That is another one of the things my dad told me to do. “About a week before the magic show, call and make sure they know you’re coming.” All of that is about creating confidence.
By the way, confidence is a huge part of that customer loyalty that we’re going to talk about today, because if you just provide great service, it’s one thing. If you provide great service and you can add confidence to it to create customer confidence, that’s truly the formula for customer loyalty.
Ray: I so agree with that. Hearing you talk about the lessons you learned from your parents at that early age, it’s amazing how the simple ideas that your parents shared with you at that time are really some of the key pillars and best practices in industry today that so few companies do in a consistent manner. That’s the keyword, in my mind: the consistency of being able to follow up, stay in touch, and confidently deliver service in a way that leads to customers being really happy.
Shep: Right. Consistency is a big part of that confidence. As we talk a little further, we’ll probably get into the whole concept of what consistency really is. At the end of the day, your customers, clients, guests, patients, members, or whatever you want to call them, want a consistent, owned experience. If they own it, they’ve internalized it, and an owned experience can ultimately be a loyal experience.
Top Customer Loyalty Brands: Lexus, Nordstrom
Ray: As I think about what you just said, I think of some of the brands that I like to shop at and the affinity that I have toward those brands. As we’re going to talk more about some of the methodologies in your books and how we get to that stage, I think of Nordstrom. I think of Lexus. I think of companies where I would simply not want to go anywhere else. For example, I am a Lexus customer for life. I have that relationship with people at the dealership. They would really have to mess up in a large way for me to want to go away.
Shep: Lexus is one of the great examples of that. I had the great opportunity back in around 1984 to connect with people at Lexus. This is when they were just rolling out. I remember they had two models. We were in Los Angeles at the auto show. I was actually working with one of my clients, General Motors, and I was working with their dealers, as well as the salespeople on the floor, to be able to help them better sell at the auto show and their dealerships.
I got connected to these Lexus people and I said, “Wow, I’ve never heard of this car.” They were taking this marble, and they would set it at the top of the hood where you open it, and it would roll down perfectly. They said, “Look at this. There is no tolerance for any inconsistency in the manufacturing process. This is Japanese manufacturing at its highest level.”
Ray: They need to have great service and they have to be able to relate with their customers at each touch point to keep the brand promise alive and well. One of the compliments that I often give to different people at Lexus that I’m enthusiastic about is that they’re really living up to their brand promise. Because they have such a high brand promise, that’s probably the ultimate compliment I can give them. They’re living up to their brand promise.
Shep: When you marry the quality product to the quality service, it’s an unbeatable combination. One of the strategies I talk about in the Moments of Magic concept is that you must have quality at every turn. That means quality product and quality service. No matter how great your quality is in your product, if it’s a wonderful product, and if it does what it’s supposed to do, but you treat the customer like dirt along the way, don’t make them feel special and don’t appreciate them, the customer will ultimately one day say: “I’ve had enough of this. I’m going to go find someone else, even if I have to compromise just a little bit, because I want to feel better about the people I do business with.”
Ray: Another example that comes to mind is Nordstrom. I think about them in terms of the relationship that they build with their clientele. I shared this in another issue, but for those of you who haven’t heard this story, I remember one day I was going out to buy some clothes. I tend to buy clothes in batches and I tend to stock up. I don’t go very frequently, but when I go, I buy a lot.
I bring this story up because it’s important for people to realize when watching this video, listening to the audio or reading the interview, that it’s not just about having great products or having great service. It’s about being able to be a trusted advisor in between when your product rolls off the line and when you ultimately sell it, so that you’re helping the customer make an informed buying decision through the process. That’s where you really earn your trust and your rapport with a client.
Shep: That personal shopper did everything right. They engaged you, built rapport with you, got to know you, and understood what you wanted. Call it Sales 101. They sold you with service. They probably had a great personality. The idea of flexibility and being able to move from one department to the next department is unheard of in most stores. You have to go visit Bob or Sally over in the shoe department if you want shoes instead of, “Hey, I’ll take you over there, no problem.” I’m going to guess since that time that you’ve heard from this personal shopper, they know what you want, right?
Ray: They stay in touch. Now, for example, when I go to Nordstrom, I go and I speak to that particular person. Here’s another example. I want to get to one of your stories, which I really like, in just a second. When I go to Whole Foods, which is a large organic retailer here in California (they’re pretty much around the country and need to be more places), I have a relationship with the person who provides my meat. Can you believe that? When I go to the store, I go to a specific person in the seafood section, and he is the one who knows what I like.
Shep: Right. There was an article that came out just today, as a matter of fact, in Retail Wire about the concept of the concierge or the local chef, that’s fairly well known in a grocery store. How does that work? Is that really going to make a difference? I believe what it does is it gives the store a personality. Any business, regardless of the type of business or industry that you’re in, should have some type of personality, something that you’re connected to. That’s why I say that everybody in any organization, whether it be retail, front line, or selling missiles to the government, there is a person in that organization that your customer will relate to. I call this the awesome responsibility, because at any given time, that one person, in your case Tony or John represented Whole Foods, represents the entire company, and it is an awesome responsibility.
Ray: That’s actually a really great point. When I go shopping, I have a certain level of an expectation about how I’m going to be treated. To your point, if John or Tony are not there, and someone on Tony’s team doesn’t provide that same level of service, and they don’t know what level of service I had from Tony, then Tony and his team need to say, “This is the level of service we need to provide,” because if they provide a lower level of service, I walk away disappointed. I say: “What happened? I didn’t like that interaction.”
To your point, that consistency and being able to make sure the whole team is operating at that consistency is so important. At this time, Shep, I want you to share your story with the cab driver. Some folks have heard it before, but some haven’t. I think it’s a great example of Moments of Magic, and I think everyone will really enjoy it. Can you share it?
The Cab Driver Story – A video on Customer Loyalty:
Shep: Yeah. Without doing it in front of a live audience, it’s kind of awkward, but if they want to watch it, they can just Google my name. It’s on YouTube, it’s on my website. The video of the cab driver story in front of a bunch of people is there. Here’s the gist of it. One afternoon, I was in Dallas, Texas a number of years ago, and I walked out of the convention center on a very hot day. This cab driver was there to pick me up. He had just dropped somebody off. It wasn’t prearranged. When he got out of the cab to take my bags, and I’m dressed in a business suit that day and had a couple of suitcases, I looked at him and it was very hot. It was over 100 degrees.
He was wearing shorts and he had a cut-off or sleeveless T-shirt. I looked at this guy; he hadn’t shaven in maybe a day or two, maybe a week. Maybe he hadn’t showered in a week, but he looked like a bum. I thought to myself: Look at this guy. What does the inside of the taxi cab look like? Now, I thought it would be dirty, grimy, and the air conditioning wouldn’t work. That’s when he said, in the deep Texan accent: “Get in the car. It’s nice and cool in the car. I’ll take care of your bags.” It didn’t sound right, but I did what he said.
I handed him my suitcases, I opened up the door, and it was cold inside the cab. The air conditioners were working just fine. It was spotlessly clean. There were a couple of newspapers on the seat that I could read. Where the hump is, there was this bucket with ice with a couple of sodas. It was pretty amazing to me. Here was the exact opposite of what I thought it was going to be, based on what this guy looked like. I even looked back to make sure the guy was still putting the bags in the back of the cab. Of course, he was. He got into the front seat, picked up a dish of candy off the front seat, offered me a piece of candy, and he tells me, “Sit back, relax and enjoy the ride,” I can have the candy, the sodas, the newspapers at no extra charge; it’s a flat rate of $22.
We’re on the highway, and he starts to talk to me about where I’m from and what I do. We start to build a little rapport. Then he asked me if I wanted to see the famous fountain at Las Colinas. Now, I had no idea what he was talking about, but when he started to describe it to me, I realized I had seen a picture of that fountain. He said, “You’ve got to see it in person,” so we pulled off the highway. I agreed to this, and he wasn’t going to charge me any extra money.
There it was. There are these larger-than-life-size statues of horses galloping across the water. Where their hooves hit the water, it splashes up. I can go on and on about it. He could go on and on about it, because he was giving me the history of the artist, how long it took to make and how much it cost.
Anyway, we get back into the car and he asks for my business card. He said he collects the business cards of the people that he drives. Then he gave me his card after I gave him mine. He said that if I come back to Dallas, I should call him. He said not to wait until I get there, but to call him two or three days ahead of time. He said he will pick me up at the airport, treat me like a limousine driver would, park the car outside and walk inside, but it would be the same flat rate. He said to just look for him when I came off of the plane and go to get the bags. He said he’d be standing there with open arms, ready to help me out. He said, “You’ll recognize me.”
I’m not going to forget him. This is good. Twenty-two dollars is what the fare was, I believe, at the time. I gave him a huge tip and said good bye. This was a really nice experience. I had his business card and I thought nothing of it. Four days later, when I was at home in St. Louis, MO where I live, I opened up my mail, and there was a thank you note from the cab driver. Now, I don’t know about you, but have you ever received a thank you note from a cab driver?
Ray: I can’t say I have. Nope.
Shep: It’s amazing; not many people have. I would get Christmas cards from this guy around the holidays. Every time I would go back to Dallas, this guy, Frank is his name, would pick me up and take me around. I love to tell you this story, and the thank you note is really cool, but there are a lot of messages to read into this. We can break it down.
Number one, that first impression wasn’t good. I may slightly exaggerate about that, but I would imagine if you put this guy in a business suit, he would still look that way. There is nothing you can do. He’s just disheveled looking. He shaves at 7 a.m. and at 8 a.m. he has his 5 o’clock shadow. That’s just the way he is. He looked a little disheveled, but from that point on, the Moments of Truth that he managed – taking my bags, opening the door where it’s cool and clean, the amenities, the little extras that you don’t get from most other cab drivers, such as a newspaper which, by the way, he got for free from hotels that had extra newspapers, the sodas, which aren’t very expensive and back then cost him less than a quarter. He said, “I give them a soda that costs less than a quarter, and they usually give me a couple of extra bucks on the tip.”
Ray: There are so many learning points from what you shared. I appreciate you breaking it down to make it very clear. Some of the things that jumped out at me are, first of all, the right attitude; second of all, differentiation, where he looked for small things that he could do, which would have a huge impact and differentiate him from different people, in terms of the beverages, in terms of creating an experience for you where you saw the statue. He basically turned a boring trip to the airport into a mini-sightseeing trip to see something that was nice.
Shep: Right, it was an experience.
Ray: Exactly. As I think about this with other types of companies, coming back to Lexus as an example, one of their basic policies in the dealerships that I’ve gone to is that when you take your car in, it doesn’t matter whether you’re going in for an oil change or going in for something more serious, they give you a Lexus to drive around while your car is being taken care of. This is, in a sense, brilliant. Now they’ve taken the pressure off of themselves to get work done, and they can work with their mechanics to get maximum efficiency and productivity out of their team, while at the same time exceeding the customer’s experience.
Shep: And it’s a great sales tool, because guess what? If your car is two or three years old, and they put you into a fairly new, late-model Lexus, or perhaps even an SUV when you’re used to driving a sedan, you’re going to start thinking, “Wow, this is nice; maybe I need to think about this for my next car.” That’s what they want to do, and it just ties in.
Ray: That’s awesome. That’s a brilliant strategy, especially for busy people who don’t have a lot of time and don’t want to go back and forth to a dealership. They’re targeting an audience that is probably their ideal customer who is interested in buying the types of cars that they sell. They’re creating a customer for life.
Shep: By the way, they were more expensive; not a lot more expensive, but they were more expensive. You know what the guy said to me? He said: “We’re in the business of giving a very fair deal, not necessarily the lowest priced deal. If all you want is price, we may not be the right dealership; however, you’re getting the whole package.”
I looked at how much extra it was costing me, and I started to think about the next five years if I kept the car: It’s not much more to have this incredible service. My time is valuable, as yours is. As busy people, and for many of the people watching, listening to or reading this interview, that may be one of our most precious commodities. This is a great tip for any organization: Any company that can save their customer any amount of time in the process of doing business with them may have a leg up on the competitor who is not doing that.
Ray: That’s a very important point. I think it’s actually a great segue. So far in our talks, we have gone through a few different customer examples, talked about Moments of Magic. And now, let’s go deep and deconstruct how we go from level one, where there isn’t much of a relationship with a client, all the way through to really being an advocate for the brand. Let’s work through your methodologies on that.
Shep: Sure. In many of my speeches, I create these lists, sometimes a Top 7 list or a Top 10 list. Why don’t we, if you want to call it methodology, just go through some of these simple, common sense strategies that I think are very personal; whether you’re on a front line dealing with a customer, whether it’s a leader in an organization dealing with their internal customers.
Ray: I have one thing to add to what you’re saying here, in terms of the Moment of Truth and looking at customer touch points, or these interactions, as you call them. I think it’s also important to realize that they can be direct interactions or indirect interactions. As an example, if someone who is doing a Google search to find your company or to find what you sell and can’t find you, that’s a Moment of Truth where they can go one of two ways, right? They can go in one direction toward you, or go away from me.
As another example, they’re trying to find your office. They can’t find your office because it’s hard to find. Again, that’s another Moment of Truth. They’re trying to find parking in your parking structure. It’s hard to get in and hard to get out. It’s not well-lit. Your office is hidden in the complex. There are too many people in the waiting room. It’s too congested. There is no place to sit down. All of these are Moments of Truth, these interactions which need to be considered as well. It goes beyond simply starting at when you have a conversation with your prospect or your customer.
Shep: Most people think that customer service is focused on the people-to-people interactions, but there is a system behind the service many times. It starts with your first engagement, which could be an advertisement, an article somebody reads, or a billboard they see. That immediately lends to that impression. You’re right. As they drive up, what’s the parking like? Is it easy to find? Is it easy to get to? Location, location, location means a little bit of something.
Ray: Wonderful. We’ve talked about a few of the key strategies. What’s next in the process, from your perspective?
Shep: Let’s talk about Moments of Misery. We haven’t really talked about that. What do you do when there’s a mistake or a problem? This is tough, because I don’t care how good you are, one day with your friends at Nordstrom, Lexus and the Apple store, there is going to be a problem. This is where the rubber hits the road, so to speak. It’s how you handle that problem that’s going to restore confidence. You go to a restaurant. You have a bad meal. They take it back. They fix it, and they bring it out quickly. Maybe the manager comes over and says, “Hey, I’m going to buy you a drink.” That’s really nice. By the way, I don’t agree with buying people extra things or giving away things for free. I believe that if you handle that problem the right way, there is a pretty good chance that you’ll restore confidence. We’re going to make an assumption that problems don’t happen all of the time. When they do, that’s when you have the chance.
Three things have to take place whenever there is a Moment of Misery or a problem:
- Fix what needs to get fixed. That’s a given. That’s why somebody is complaining. That’s why there’s a problem.
- You do it with the right attitude, which is an attitude of ownership. If it comes your way, you own it, even if it’s “not your department.” You own the problem. You may have to hand it off to someone else, but it’s the way in which you do it that makes the difference. You fix the problem; you do it with the right attitude.
- You do it with urgency and speed.
If you put all three of those together, it will usually restore the confidence, if you fixed the problem with the right attitude and urgency. Here’s the cool thing: Done well, you restore the confidence that’s even higher than if the problem had never taken place at all.
Ray: That’s wonderful. Let me add to that, in terms of some ideas I have here. Another key factor, I think, also depends on the nature of the product and solution you sell, such that it drives the lifetime value of a client. Let’s come back to our example where we’re selling a car. The lifetime value of a client for someone who is selling a car is a lot higher than another type of solution. Over the lifetime of the customer, he’s going back into the dealership, buying cars, referring family, friends that you refer, etc., versus another kind of business. When the Moment of Misery occurs and the steps are taken as you’ve outlined, in many cases that can certainly solve the problem.
Shep: And that, by the way, is the system that sometimes is behind the scenes. That’s more than just one person interacting with another person, or a company interacting with a customer. There’s a system that puts that in place. That walkie-talkie system is a great little system that they have. People are observing and they are being proactive, which is another great part of the methodology, creating proactive service. It’s the server at the restaurant that never ever lets the glass of water get empty for any of his guests. He’s always there to fill it up. That’s a metaphor for virtually any type of business.
Ray: Shep, let’s shift gears now. We’ve talked about some examples. We’ve gone over some strategies. Now let’s paint a picture for our audience: if they start to really take the total customer experience seriously and start to analyze their touch points, start to think about the systems that they need and the strategies to really create fans for life; of what they can expect as they move forward, and talk about the transition to go from where they are to where they need to be, to be a leader in their industry.
Shep: First and foremost, it’s not a department, as we mentioned. It’s a philosophy. It’s everybody’s job. It really starts with the leader of the company, who is going to push that culture. He or she has to push it toward the front line. I mean, everybody is involved, starting on the inside and at the top. I mentioned this earlier. You treat your employees the way you want your customers treated. This is key, because this is where one bad apple spoils the whole bunch.
Ray: Just to add one point here, you’re absolutely on target here. When we think about hiring people, I believe we’re hiring people based on their attitudes, their beliefs, their character traits, and the habits that they have. Of course, we want them to have a certain level of competence in the job that needs to be done, obviously. However, I think one of the key things that we can learn from organizations like Nordstrom, like Zappos, and many others is to build a culture based on a set of values of who you are as a company.
Shep: Right, so you come up with the core values that are key to whatever business you’re in. They’re so good that if you just hired someone that had those core values, they would know how to respond. At the same time, you have to be willing to fire anybody who lacks any one of those core values. Otherwise, once again, you erode the whole culture with just one person.
Ray: Very true. In terms of what we need to talk about next, our users and subscribers are starting to think about how they can put in play what we’ve been talking about. What are some of the roadblocks, for lack of a better word, that are going to come up from your perspective in working with clients that are going to need to be dealt with?
Shep: That’s a great question. The first thing I thought about when you asked that is that, when you have the wrong person in the wrong job, you need to move them out or you need to get them trained. Some people say, “I’m afraid to train my people for fear that they’ll leave after it costs you money to train them.” Here’s my comment. Do you want somebody who’s dealing with the customer that will potentially lose business for you because they haven’t been trained properly, or do you want to train them, spend the money and make the effort upfront to make sure that they don’t lose those customers? Because when the customer walks out the door unhappy, they aren’t going to just walk away and not doing anything, they’re going to tell somebody about the problem that they have. And you can’t afford that kind of thing.
Ray: I think that’s a great point. The roadblock, just to say it again, is making sure we have the right people on the team with the right mindset and attitude that is customer centric. I think a lot of organizations have employees that really pay lip-service to that idea and don’t live up to it. The process of driving this through the organization through using the right metrics and measures, so we can manage what we measure and be able to affect change, really has to start at the top. I think that’s really a key point. Otherwise, it’s not going to happen.
Shep: We did a training. Part of my business is we have trainers that go out and share some of the content that I deliver in a typical keynote speech. We were talking to one of the clients. There were three owners, and two of them didn’t show up to the training session that our guy did. I called the client back and I said, “Are you really serious about this?” He said, “Yeah.” I said, “Then we need to come back, and you need to pay for us to come back in and do another day, and you need for your employees to see all three of you in that room totally engaged.”
Ray: Absolutely. Otherwise, change will not happen. Shep, we’ve talked about a lot of great things. What is the question that I haven’t asked you that we really need to dive into? What are some of your parting thoughts, before we share with our audience some goodies that you have and how they can learn more about you?
Shep: Wow. We could have gone in so many different directions. We were starting to touch on it. I would say there is a cost to creating a great service experience. So many people don’t spend the money to create that great service experience and train people. I think that’s a huge mistake. At the end of the day, and I guess this is more of a comment than a question, the thing that most people miss is that customer service shouldn’t cost anything. It should pay dividends.
Ray: Referral marketing has been proven, I think, in many cases to be one of the best forms of marketing. Are you going to believe somebody on a video or in an article that you read by somebody you don’t know, or are you going to take the word of somebody you know very well who refers the business? Nine times out of ten, someone is going to prefer to listen to somebody that they know well, who is accountable for the recommendation that they make.
Shep: The studies are saying that consumers believe so little about what companies tell them they’re capable of doing, but they will believe their friends, their family members and their associates. So, that’s the way to do it. Be so good at what you do that your customers become your best form of marketing.
Ray: Shep, an idea that comes to mind for future interviews is that we could even do some talks just on case studies. We just deep dive on things that we’ve learned from different companies. At this stage, how can users, subscribers, clients or members, as we’re talking about the different language and how we relate to people who are benefiting from what we’re sharing, how can they find you? How can they learn from you? Do you have anything on your website that they can opt in for to learn more about you?
Shep: Funny you should ask. Of course, we all do. Here’s my thing. I would love for you to come to my website, which is www.hyken.com. But here’s the bottom line. Of course, I want you to invite me to your meeting to be your speaker. I want you to hire some of my trainers to come out and do training programs. We’ve got online training. I want you to learn, if learning means you just go to my website. And I have a blog with articles that I write weekly, which you can click on. It’s called Customer Service Blog. You can subscribe to my newsletter. It’s totally free. I write, and maybe it’s a form of marketing or advertising, but it’s me wanting to share content.
If you go to my YouTube channel, just go to YouTube and type in my name. I’ve put on almost 100 videos at this point all about how you can create better service. We have clients that use these videos once a week in their departmental meeting or their big company meetings just to showcase what they want to teach and the culture they want to create. I would suggest going there. There are free resources.
If you’re interested in my books, of course, you could buy them right there on the website. We’ve created a special, and I know that’s one of the things you wanted me to do. One of my books, and I happen to have it right here, is The Amazement Revolution: 7 Strategies to Create an Amazing Customer and Employee Experience. It’s a New York Times bestseller, by the way. Mom’s very proud of me on that. If you go to AmazementRevolution.com/special, we’ve created a great special that includes some other books and some other extra that I think you’ll find very worthwhile. If you’re interested in that, that’s kind of a nice little piece that we did for you.
Ray: Thank you so much.
Shep: I’m happy to talk to anybody who wants to. Just go on my website and connect with me via email there. We can have a short conversation. I don’t charge for that. I’d love to do it.
Ray: That’s an excellent point, Shep. What that made me think of is the Law of Cause and Effect. Many times we are thinking all about the effect, not realizing that it’s the cause that leads to the desired effect that we are in control of, that we can shape, and that will ultimately lead to what we want, which is happy customers for life that are basically advocates for our brand, because we took care of them to begin with.
With that being said, Shep, it’s been a real pleasure to talk with you through this interview. You’ve shared so many wonderful ideas with our audience. And I really encourage everyone to reach out and connect with Shep. There is a lot that you can learn from him. Continue to take a look at what we have in Customer Engagement Magazine. We’re going to have Shep be part of this magazine with articles, videos, and future videos. Once again, Shep, thank you so much for your time.
Shep: Thank you very much for having me. It’s been an honor.
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