Episode 22: The Number 1 Secret to Success

Why do some people succeed, why do some fail? Why do some companies succeed and others don’t? 

Lots of research has been done and books written about this, but for host Niel Malan, it comes down to one thing: Client Success. 

In this episode of Elite Entrepreneur, Niel looks at why client success rather than client service is the true measure of a company’s success.

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Transcript

Hey guys. Welcome back to Elite Entrepreneur episode number 22 where I’m going to talk to you about your number one success metric and your number one success factor in your business. If you watched episode number 21 you will know that I was on my way to get a massage. This is episode number 2 on the way back, in case you are wondering why I’m wearing the same clothes. Okay, so lots of books have been written about success. Why do some people succeed? Why do some fail? Why do some companies succeed? Why do some companies fail? There are thousands of books written about the subject. There has been a lot of research that has been done on it and I’m not going to tell you about any of that, because you can pick up a book for that. I’m going to tell you a theory of mine, a personal theory. I’m going to kick off by saying to you, by posing a few questions that kind of lead into this whole thing.

If you think about it, if you take a long-term view on business, the kind of business that you want to build is one that has repeat clients. You want people to return once they have done business with you the first time. And if it’s the kind of business that lends itself to repeat purchase, you want them to buy from you over and over again. If it’s a kind of business where people buy your type of product or service once, you want them to at least refer other people. I believe that in the long run businesses that successfully achieve that goal, those two goals of getting repeat business and getting referrals, I think have a very distinct advantage over any other businesses purely because the cost of acquiring clients is so high. So it reduces your client acquisition cost, but there is another much, much, much deeper motive behind those two metrics.

I want to talk to you about a concept called client success. I have spoken about this in a couple of previous episodes, but this episode really is about client success. Why do people buy your product or your service? Why do people buy a drill? Because they want a hole? Exactly. Because they want to be able to put up painting. People don’t buy your product or your service for the product or service. They buy your product or service to achieve an outcome, to achieve a particular result that they wish to achieve most. We live in a world that’s fiercely competitive. There is an insane amount of competition for any product or service. It’s actually so funny because we do a lot of software comparisons all the time. We use something like 70 different paid apps in our company. So we are always evaluating software to find the best features compared to the best price, compared to the best adoption curve and that kind of thing.

So we get to look at huge amount of products and the one thing that we found is that the products we adopt and the products that we keep are the ones that help us to achieve success the fastest. Success is defined based on the solution I’m looking for. If I’m looking for a project management software tool, I’m looking for an effective way of organizing my team and their work, assigning tasks and deadlines, just getting worked done, whereas if I’m implementing a recruitment automation software product, I want to make it more efficient to wade through your thousand CVs and to get you a high quality candidate. You get my point.

With software products, what they’ve started doing is they’ve started looking at everything from a perspective of client success because they realized that software as a service product, that the company can only become profitable if they retain clients. If there is high churn, if there is a lot of people who sign up for a free trial version of a product and then they leave or they don’t convert to paid then the company can’t be profitable. I don’t know if you know this, but there is something like only 5% of people who go for the free version of a software product that will become a paid user. It’s a very small percentage. So it would take 20 trials to make one sale. It’s quite inefficient. The software companies really started saying, well, how do they increase the conversion rate from free to paid, number one. Number two, how do they increase retention? Because that’s the kind of business that lends themselves that question.

They came up with this concept of client success. What it’s really about is it’s really a philosophy. It’s a philosophy first and foremost that puts the success of your client first. Now, there is a really big distinction between client service and client success. So I want to create a very firm dividing line. Client service does not mean loyalty. I want to repeat that. Good client service doesn’t mean loyalty. If I sign up for a software product where the service is phenomenal, but I’m not achieving the results I’m looking for, I’m not going to keep it. If I’m getting a software product that’s getting me the result achieved, even if their service is awful, I’m highly likely to keep it. Ideally, we have great success and we have great service. I’m not saying the one or the other, just trying to draw differentiation. Success leads to loyalty more than service does. Let’s put it that way.

How they now look at it is they say, well, what makes a client successful? How do we know a client is successful? There are a couple of different metrics how you can measure client success in software. The one way is, what percentage of people that land on the website sign up for a trial? But the big one is, what percentage from trial goes to paid? So that’s a big one. But there is $40 billion a year that goes wasted of people that has bought software that never used them. So the fact that people are keeping it doesn’t mean that they are successful. They may just have forgotten to cancel.

So how else do you measure success? Well, you measure success there by adoption. If there are seven users in a company, how many users regularly login and use the product? So that could be another one. Another measure could be what they called NPS, Net Promoter Score. So Net Promoter Score is a metric where you ask your client between 0 and 10, between 1 and 10, how likely are you to refer? Only if people rate 9 or 10 they are considered a promoter. If they rate 7 or 8, which is still good, they are considered passive and 1 to 6 is considered a detractor.

It’s a ruthless measure. You’ve got to be really good. When the total score goes minus 100 to plus 100, you should look it up. It’s really interesting. So Net Promoter Score is another the really interesting one. They look at things like referral rates, renewal rates, if it’s a type of product that people renew and so forth, and you have the amount of features that they use. So it becomes quite an interesting science if you start asking yourself the question, when is a client successful? It’s very unique to every company and it’s very unique to every industry. I want you to start thinking about this question. The company that you are currently in, whether you own your own firm or you are currently employed, how do you measure success? What is your definition of client success? How do you know your clients are successful? Not happy, successful.

I’ll tell you guys how we approached this. When I first started out in 2000 in this industry, I thought about empowering people through training programs. So I developed training programs and I measured success by how many are sold. So being a salesman, that made a lot of sense. I really loved selling. It has always been a measure of success. But then I found some people would buy the thing and not even show up and some people would show up and very few would implement anything. It drove me nuts. Then I developed a coaching program that coaches people over a 14-months period and more people implemented. But I still wasn’t happy with how many people finished the program.

That’s when I decided listen, I’m no longer going to sell courses. I’m going to give people solutions. I’m going to give people a system that gives them the outcome that they achieve. I don’t care what needs to go into it so that they achieve the outcome, but I’m going to design it so that they achieve success. So when I designed our flagship program, Agency Fast Track, the question I had was, how do I get a hundred percent graduation rate? Graduation is one way of measuring success, because it’s a mad intense program. It’s takes 500 hours to [inaudible 10:17]. It’s hectic. So I spoke to all my colleagues and they said, “Listen, there is absolutely no way that you are going to get to 100% success”. People with weight loss programs have a 2% success, retiring financial independence, 4% success. First year of college, only 15% of people who started finished. I’ve got all these stats. I said, that’s fair enough, but that’s not good enough for me. I want to have 100% success rate.

Everybody thought I was completely [inaudible 10:45]. They thought I was completely crazy and I am, just FYI. But I just didn’t entertain that because for me, if I say, well, everybody else is only getting a 5% or a 10% success rate, therefore I’m successful if I get it 5% or 10% success. I guess you could argue that, but I was never happy with it because it means 95% of people that trusted me with their money never achieved success. That’s awful, right? I just couldn’t accept it. So I said, look, I’m going to start with 100% success. I’m going to work backwards. It was actually a wonderful process because I didn’t think in terms of traditional terms, like the training program for example. I thought, okay they will have to be trained obviously, but the real trick is, how do you get people to implement it? How do you get them to become a skilled? How do you get them to follow through? That’s where the rubber meets the road.

It’s one thing going through a course, even if you finish the damn thing, you know, having the knowledge and turning it into skill are two totally different things. I really went to town. I did a massive research project on this and I looked at all the different things that move the needle on getting people to succeed. So I looked at weight loss, for example. If people have an accountability partner their success rate goes up threefold. Anything that threefold success peaks my interest. So I said, right, accountability it’s going to be, and coaching and strategies and a whole lot. Anyway, I’m not going to go into the program. But as a result of that absolute insistence on making sure our clients succeed the first version of this product, the very first group, the very first student group like got, I think I had a graduation rate of 67% or something like that. By industry standards, this was bloody good. It was really good. But I was nowhere happy with it. I was embarrassed, to be honest with you.

So I rewrote this. I took some of the learnings that I got from the first round and I rewrote it. The second group, I had a completion rate of 88%. I said, okay, that’s a lot better. That’s still not a hundred. I’m going to keep going. We dug deep. We went and found ways to improve. We rewrote it. We redeveloped the product the third time and we got to 91% completion rate. I said, okay, this is good enough for incremental improvements to get us to 100%. We don’t have to make a massive fundamental change.

Then we started looking at, how we can make it better. So we started making small incremental improvements. We started looking at why people did not finish. The bulk of people in our world, like over 90%, the vast majority of people that don’t finish mainly because of either tragedy. So there is usually in one student group, there is a death. It’s actually sounds terrible to say this, but we just are seeing it statistically now. There is at least one death. Some people have had medical emergencies. We’ve seen that. We have had people whose kids got sick and ended up in the hospital. Then we’ve had other people who are still employed and they just got deployed on a contract where they have to go to Ghana where there is no internet access for a month or whatever the case. So it’s usually stuff like that.

It’s usually things that will be very hard for us to prevent. But I didn’t settle on that as a cop out. I said, no, I’m still not happy with it because if they don’t finish on time, then they need to finish afterwards. Our whole fulfillment team and I got together and said, listen, we don’t what it takes, but someone will finish what they started if it kills us to do it, because we care about their success. We got it up to 93%. That’s currently where we are. Our current average, our graduation average overtime, ever since we started Agency Fast Track is on average 93%. Some of the new groups are at 95% so that’s why the average is a little bit lower because it’s [inaudible 14:58].

Anyway, so that’s what we’ve done. So we built a whole team. We built an army of people where there is complete focus, just like we’ve got a whole discipline going on just on coaching. And then we’ve got a massive team just on helping people with their campaigns. We’ve got a whole focus on analyzing the technology to see where people get stuck, how they progress, et cetera, et cetera. And the list continues. I will not rest until I get to 100%. I’m telling you right now. Everybody says, “Listen Niel, it’s not doable”. And there is a part of my brain that knows it’s not doable, but I’m still going to go for 100%. I don’t care. There has got be a way to do it. So that 7% bugs the crap out of me.

Now, why am I telling you this? I’m telling you this because I believe that’s what it takes to succeed. It is a fanatical insistence on ensuring that your clients achieve the result that they are looking for. I believe that’s what it takes. Because think about it, how will you compete in the markets when your compe…? Let’s say for example, you started off with a unique product. So we started off with a pretty unique product. Now there are so few original people in our space, especially in South Africa where I reside. So most people are just go and copy me. They’ve been doing it for years. Whenever I come up with a new course then two or three gurus come up with the same course. I don’t even pay attention to it anymore. Even if you are a market leader and you come up with a new thing, they just going to copy it. They are going to knock it off.

How do you sustain competitive advantage? Because when five people start copying you, the market starts buying on price. You see, that’s the problem. If the market perceives they can get the same product from five different vendors, if they perceive it’s the same quality, then price becomes a dominant buying factor. And if you sell on price, you can’t make any money. Not even Amazon makes money. How are you going to sustain your competitive advantage? Well, you’ve got to get as close as humanly possible to the result, the outcome that people are looking for, because people are prepared to pay premium for a result.

Let me prove it to you. I don’t know if you’ve ever gone through a weight loss mission. You may know someone else that has. People can pay the price of gym memberships, maybe a personal trainer, whatever the case may be. And you know [inaudible 17:13] for X amount of money or go join the gym. But why do you join the gym? You want to achieve this particular look, right? You want to achieve a particular outcome. If you join a particular diet program, why do you do that? Because you want to achieve an outcome.

What if someone offered you a solution that has a 95% success rate? 95% of all their clients over a big study like ours is 500 now. So statistically, it’s very relevant. What if there is a 95% success rate? Wouldn’t you be willing to pay a lot more for whatever it took to achieve the success? What if the people who provide the advice to you said, look, it takes a membership? It also takes personal training. It also takes a group class. It also takes regular body [inaudible 18:01]. It also takes certain assessment or supplements. I’m just making this up. I’m going to saying that’s what it takes.

But I’m saying what if someone work backwards and said, we are going to measure what people want to achieve and we are going to measure if they achieve it and we are going to throw everything out until we get to 100% success rate. Wouldn’t you be prepared to pay a lot more for that service? I would argue that you would because you are trying to achieve the outcome. I mean, if a normal weight loss attempt has a 2% success rate, less than 5% of people who start a new exercise regime, stick with it. The stats are really low. So what if there was someone that comes out and solve that problem? Can you imagine how much of a competitive advantage it will give that service provider, whether it be a gym or a personal training studio, whatever the case may be? Can you just imagine how much better it will make them?
People don’t buy products or services, they buy results. And that’s what we need to focus on. We need to be absolutely fanatical about achieving client success. We need to not think in a traditional way. We need to not think the way our competitors think. We need to not define ourselves as a training company, as a software company, as a consulting company. You need to define yourself as a success company. What result are people buying from you, and how can I give them a superior result than anybody else?

You’ve got to change your business model to do that and you’ve got to change it again and again and again and be willing to throw it out. This is why [inaudible 19:31] develop some few products, because we decided, listen, we are only going to develop products if we are going to be the best in the world of it. And I take it very seriously. So you won’t find even on our website that we represent a whole bunch of products. We’ve got very, very few. We only develop the best products in the world that we believe we can succeed with and that we believe we can make our clients successful with.

So what’s the moral of the story? The moral of the story is that my belief is, my hypothesis is that the number one success factor in business today, drum roll, is successful clients. Successful clients buy from you again. Successful clients refer their friends, but there are another couple of things that also happens when your clients are successful. But even more important than both of those, there is a difference between a business that’s mission driven, that’s driven by missionary versus driven by a mercenary. A business that’s driven by mercenary wants to make money. That’s their main thing. They are going to go for the bottom line. They are going to focus on efficiency, cost cutting, mergers and acquisitions, chopping out layers of overhead, that kind of stuff. Those businesses never last.

A missionary, and I’m not talking about the missionary position there for those of you dirty minds. A missionary is a person that’s on a mission. They are trying to change the world. Look at Elon Musk. Why is he regarded now as the world’s most respected, the most successful CEO? Because he is on a mission to change the world. These are the guys that are creating game changing products. Elon Musk came out and he created Tesla. He also wanted to take people to the moon and SolarCity. How about solving three problems? But you know what? He believes that there are big problems that the world is facing. He believes that someone has to do something. That’s the only thing that has driven him. Those are the guys that are making it. Those are the guys that are making waves. Those are the guys that are successful.

A mission driven business has a couple of advantages. The first is they’ve got much happier clients. The second is that they get significantly greater value out of their employees. Their employees work much harder. They become much more creative because they are also bought into a mission driven business. There is just an X factor in the mission driven business. People can feel it from the outside. People want to participate in it. Investors want to invest in that. People want to participate in a mission driven business. It’s important for people to feel like they are making a difference in this world, whether they are an investor, an employee, a supplier, whatever the case may be. So I believe that if you become fanatical about client success, you study your client success then you will find ways to improve.

Hey guys, I’m back. So the phone overheated in the car. I’m now back at my home. We are about to take our dogs for a walk, so I’m about to wrap up here. What I was saying in the car is don’t be scared of client success. Don’t be scared you don’t get it right. Don’t be scared that you are not going to find ways to innovate it. When you start measuring what matters most, you will find ways to improve it. Talk to your clients. Ask them how they define success. Talk to your team members and introduce one metric. You know, for us in our company, the number one metric is still graduation rate, because we find when people graduate, that is when everything else happens. Start with one. Start ways to improve and put yourself on a trajectory of constant and never ending improvement.

Your number one success factor in life and in business is going to be your client success. It will differentiate you more than anything else. It will give you the greatest level of joy and satisfaction and give you the impetus and the passion to make sure that you succeed because your clients are successful. Now it’s over to you. What I want you to do is I want you to go to eliteinc.com/22 and tell me what you think. Tell me in your particular industry, your particular game, how is client success defined. How do your clients define success? Do they define it by satisfaction? Do they define it by what particular outcome they want to accomplish? Make sure that you are giving yourself that edge, that advantage by talking to your clients. And tell me about it. Tell me what your questions are regarding client success. What are some of your challenges, some of your fears?

Go to eliteinc.com/22, scroll down to the bottom of the page, track down the comments box. Please let me know what you guys think. Those of you guys that like watching on YouTube, please remember to hit subscribe so that you can get notifications whenever there is a new show out. Those of you guys who like listening on podcasts, please remember to subscribe. Please remember to give us a five star rating if you are happy with what we say on the show and tell your friends about it. Those of you guys who are looking for some help to get going on digital, please remember you can book a complimentary call with one of my team members. Go to eliteinc.com/22, scroll down to the bottom of the page and book a 15 minute call.

Guys, as always, thank you so much for your time. I don’t take it for granted. I know this was a really long episode. It’s partially because I was in the car for long, but it also partially because I’m very, very passionate about the subject and I wanted to make sure that I get the point across. But I value you. I thank you so much for your time. I really appreciate it. God bless and I’ll see you on episode number 23.

2019-11-11T06:44:04+00:00