- Mario Kart. - [Jared] Oh man.
- Oh, years. I used to play Mario Kart, listen to it,
wasn't Nine Inch Nails it was another one.
(upbeat music)
How do you increase the number of repeat customers?
That's what we're covering today.
You know for me, I see these entrepreneurs and they're
frustrated because they've got a lot of turnover
in their business, right?
And when I asked them
what's the lifetime value of their business?
They're like oh, I don't want to talk about it.
It's like why are you always doing new projects?
Why aren't you actually sitting down and saying,
okay, what do we do as a company,
product or service, to make sure that we have new opportunities
with our existing customers?
Because, at the end of the day, here's what I've learned.
The purpose of a business is to create,
and here's the magic word, keep a customer. Right?
And if you do it right, you have these long-term customers.
It allows you to plan better.
You have less challenges always trying to find new customers.
I really had to learn this lesson the hard way.
We were building my company Flowtown.
It was a social marketing application
for small businesses.
And I remember we sat down we looked at a thing called the
churn, right, and those of you guys out there know it's like
churn is the most important number in building software.
And I'm looking at it I remember calculating
it with my cofounder.
I'm like, "We have a 20% churn."
And he's like, "Is that good or bad?"
I said, "Well here's a way to think about it.
"With a 20% monthly churn every five months,
"we lose our customers."
He's like, "That does not sound like a good business."
And I was like, "I know."
I was like, "On average a company should be at like
"8 to10% churn per year."
So we had to figure out how to change that and fast and pronto.
So that's what I want to share with you guys is a process of
how to think about it.
And this applies to software, service businesses,
other types of companies to really think of how can you
approach your customers in a way that'll create repeat business.
Now, number one is you gotta offer an ongoing service.
You know and I've seen this true for you know agencies that do
kind of one and done projects.
They don't think about
what's the ongoing service after the fact?
Maybe it's website maintenance.
Maybe it's whatever.
I mean just this morning I had the guy that manages my air
filter, he has a computer system that monitors all his customers.
He's like, "Hey, do you want us to change your filter?"
I was like, "Does it need to be changed?"
He's like, "Yeah, it does."
And I'm like, "Cool."
"Well we actually have a service plan."
And I'm like, "You have a service plan.
"Do tell me about your plan."
It's like three or something whatever buck a year and we'll
come every three months and we'll change it.
I'm just like, you know what?
Sign me up.
He got me with the ongoing service.
For somebody that installed my furnace.
That, I mean, everybody watching this has an opportunity to think
about what's something that I could offer my customers?
Could it be something you're not offering that you have to do
yourself but you can offer it to get a residual to
build that ongoing revenue.
Number two, I want you to start strong.
Okay, what I mean by that is on-boarding a new customers.
When you start with somebody, you want to make sure that
experience of them getting started with
your business is awesome.
That it's clear expectations and here's what you can expect and
making sure that they get
the value as fast as possible, right?
You have a core value in your business.
You have a customer who just signed up.
How fast can you get them to experience that core value
because that'll allow them to think about like man these
people really know how to operate their business.
That was one of the first things we did in our company to improve
the churn numbers to make sure that our activation rate,
which is that, core value to customer, was high.
Number three that you need to do is you need
to continue adding value.
You know some people they think well I got a customer and
they're good and they're on the service and
I don't need to talk to them.
That's crazy.
You need to ask yourself this question,
if you want to grow your business and this is not even
just about continuously adding value,
you need to ask yourself is how can I create more value for my
customer than anybody else in the world?
Any competitor, how do I do that?
Answering that question, especially implementing it for
your customers is how you're gonna win this game. Right?
Number four is end strong. 'Kay?
So even if there is an ending to the project,
and I'm gonna teach you what to do next,
you want to make sure you end on the best note possible.
It means you want to give them a report,
you want to show them the value they've received.
You want to make sure that they understand what went on because
there's this thing called
the primacy and recency bias, right?
It's why we always remember the first,
second and third out of a list of three.
Primacy is the first thing.
And that's why I say start strong,
build your on-boarding experience
for your new customer.
Then end strong which is a primacy because they're gonna
only remember the beginning and the end.
Sure there might be some challenges in the middle but
typically that is their experience when they think to
themselves, "How was it working with that company?"
They're gonna look at those two points.
Ending strong, making sure that they're happy.
Most customers or companies don't even think about this for
their customers.
And I think it is everything because that bias exists at a
human psychological level.
The recency, primacy bias, go check it out so
you want to end strong.
And then finally, number five, you want to make sure that you
ask for more business.
You know the funniest thing I see all the time with companies
is they've never actually gone back to previous customers and
asked them for more business.
They never said okay, once a quarter we're gonna reach out.
We're gonna do it via video, if you want to watch my video on
video re-engagement on my YouTube channel,
go check that out.
If they they don't think about how do I connect and create
value for them even after they're a customer so that you
can ask for the business, because that's it's called TOMA,
top of mind awareness.
In your market, when they think of the problem they're having
and you as a company could solve it,
they either think of you or they don't and that's what you want
for every past customer is to say oh,
I need a new design I got to reach out to this agency.
I need to amplify my analytics or reporting,
I need to use this software.
Whatever it is, that's your opportunities,
you got to ask for the business.
Now, finally, this is ninja.
You want to know that number one tip to make all of this magical
is ask for a testimonial and/or, this is what I do is a case
study or essentially an interview that can act as a
testimonial and a case study and there's a really easy way to do
it using Skype or in person, grab a camera and just be like,
"Hey, what was your life before?
"How did it work out?
"What were the results?
"What would you tell somebody that's sitting on the fence?"
That's a quick level format for doing a very easy case study.
Companies like Airbnb pretty much built their business on
their host case studies.
If you go on check that out.
I think that's an opportunity for everybody.
If you do everything else right and the customer doesn't decide
to do more work with you, who cares.
Well who cares?
That's bad but get the case study,
get the testimonial so that you can make sure that other
companies like that company see that you've done work for them.
That's your opportunity so what I want to ask you below is what
you gonna do to change all this?
What are you gonna do to make sure you get repeat customers.
Answer that question below in the comments.
I'll be sure to answer every one of them.
As per usual, I want to challenge you to live a bigger
life and a bigger business.
I'll see you next Monday. Cheers.
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