Strengthening Customer Retention w Joey Coleman #EEP Entrepreneurship Elevated Podcast #275

You know what you should do? You should have profitability in your business. You know, it's funny, like everyone says, why are you in business? To make money. I'm in business so I can live a financially free life. And yet most entrepreneurs don't. Well, we'll fix that together once and for all at Profit First Live. It's literally held in my offices here in New Jersey, and I want to personally invite you to come and work with me and my team, and we're gonna drive profit in your business. If you read my book, Profit First, and you're not sure you're getting it right, well, Profit First Live will ensure you're doing it right and have it fully implemented in your business. 2 days together, imagine that. Go to profitfirstlive.com and do it right now. All right, strap on that seatbelt of yours. Yes, I had to say seatbelt because my colleagues didn't prepare in advance. And strap it on because we're gonna talk about never losing a customer again with my friend Joey Coleman. That and so much more on today's episode of— wow, that's loud— Entrepreneurship Elevated. Go! Yes! My name is Mike Michalowicz. I am the author on a mission, a mission to eradicate entrepreneurial poverty. You know that perceived success you have? Oh my God, you're rolling in money. You have all the time in the world to do whatever you want. But the reality is You are grinding out every day. You are surviving check by check. We fix that. Fix it through my books like Clockwork, The Pumpkin Plan, Profit First, my new book, Fix This Next. And we fix it on this show, Kelsey. This show called Entrepreneurship Elevated. Kelsey, how you doing?

I'm great.

How are you doing?

Okay. I'm all right.

You guys can find us on iTunes, Spotify, iHeartRadio, any podcast catch her anywhere, and MikeMcCallister.com.

So, Kelsey, what you been up to?

Um, not a whole lot actually, just working on my house and enjoying these last few days.

Yeah, summer is— it's like summer is coming to an abrupt close, it feels like. The weather's gotten cold.

Brisk, it was 54 when I was walking into the office this morning.

Oh my gosh. Yeah, it's awesome. Also in the room, there's J-Bone. You hear that voice?

How's it going?

How you doing, J-Bone? Good.

Oh, I didn't— we didn't get to talk about my ticket.

Yeah. Can we talk about that?

Let's talk about this.

Did you hear about this, Mike?

No.

So we went out to lunch when I was up last week.

You and Kelsey?

No.

All 4 of us.

All 3 of us.

Oh, for your birthday? Yeah. Birthday lunch. Yeah. Okay. Can I ask a question? What's wrong with that?

No, no, nothing.

He just had a wheezy laugh.

Did you notice that? That was a Kelsey laugh. Weird. I'm turning into you, like, every second. So, and what were we talking about? We were talking about the guy who got a ticket and pulled over and everything, ironically. So I leave the office to go home. I have a ticket on my car here in Butten. Yeah. And it was because I was parked the opposite direction, but it's a two-way street. So I, I didn't think this was a real thing. Like, I didn't, I didn't know you get a ticket for that.

Hold on. Were you parked on the opposite side of traffic flow? Yeah.

And he didn't think there was a problem.

Yeah, there's probably a problem with that, dude.

Why? I don't, I don't understand why.

Because it could cause an accident.

You can't fall over. Thank you.

You know how slow that street is? There's not a lot of people on that street.

But there's a universal rule. Well, this street is an exception to the law.

Do you remember Brendan who used to work here? I mean, the Rewind Bars. His Rewind Bars were delicious. He, first day of work, he pulls in, does the same thing. He parks on the opposite side of the street. Facing the wrong way. So I go, hey, new guy. I didn't know his name yet. I said, I'm Mike, welcome to the company. I said, but I suggest you don't park that way. He's like, why? I'm parked. I said, because you're facing traffic. So he didn't know that either, and he adjusted his car around.

Yeah, I even looked, uh, the signs, and none of the signs say, hey, don't park the opposite direction. And I was in the space. It's a small car. I'm like, hey, I'm not doing anything wrong. $54 for that. It could give me a warning.

Oh my God, $54? Yeah. Oh gosh, I hope you enjoyed your birthday lunch.

I thought you were joking at first. You're like, is this the real thing? Yeah, it's a real thing.

Yeah, why would you buy it? So I sent her a text and she made it seem like, oh my gosh, that's crazy. And then I see her in person and she's like, duh.

Like, that's Kelsey. I know, she's two-faced. She loves you from afar.

She just couldn't understand my sarcasm through text.

Crushes you up close.

Yeah, so lesson learned.

So, uh, on a serious note, so I, uh, as I get older, I've noticed that I always have an ailment or something, something aching. Woke up this morning, I have a bump on my body. It's not supposed to be there. And I'm like, holy— and what goes through your mind immediately is like, I got cancer. I've got— there's something wrong here. And so I'm going to the doctor. I can't get an appointment today, but it's probably just a cyst or something.

Don't freak yourself out.

No, but it's actually scary. It's— there was zero there yesterday and now there's a bump that is of size.

Yeah.

So if it was right, if it was— but it was not an injury-related thing. I don't know. So now I'm like, is it a reaction to some diet thing?

I've had that happen before.

Yeah, it could be like a calcium deposit.

If it was, if it was cancer, It wouldn't pop up like that. It would be slow.

Slow growing?

Yeah, but you know, all night. So like the cancer dreams come. Like, this is so weird. So all night now I'm dreaming. Chris is at the doctor's appointment. My heart's racing. Like, I can't get one. I don't know. Should I try self-amputation? Just cut off my lower— just right at my waistline. Just everything below, just cut it off.

I used to get yelled at by one of my ex-girlfriends because I would do self-surgeries. But like nothing serious.

You're a chef, you're allowed to.

No, but it would be like, like I had an ingrown toenail and I'm like, oh, I'll take care of that. And she's like, what are you, crazy?

Mike Scalise has probably the most unattractive nails I've ever seen on anyone's feet is Mike Scalise. Actually, my father. My father's the worst. My father's worse. But Mike Scalise is in number 2 spot. My wife actually suggested we get pedicures. She's like, yeah, you ever get one?

That's how I got an ingrown toenail.

From a pedicure.

Yeah, they gave me an ingrown toenail. So I don't go get pedicures.

That's a lawsuit right there.

Is it?

I don't know. For an ingrown toenail. No, I don't want to encourage lawsuits, but that is— that's malpractice.

No, the trick is if you have toenails that curve a lot, you just have to cut them straight across. And then— but the pedicure was actually nice. They do like foot massage and—

Yeah, that's what I heard. So I'm looking forward to that once I get my lump removed. Talking about lumps removed. Do we have any shoutouts?

We have a lumpy shoutout.

What we got?

This comes from Adam Lysak, DDS. I'm a new dentist and new dental practice owner. I've been in business for just over 1 year. I was listening to your book Profit First while I was working out this morning. The points you made in the first 2 chapters of the book were so powerful that I stopped my workout and genuinely had a few tears come out.

Oh, that's cool.

You got right to the heart of what's been stressing me out about my business. I have already reached out to my respective banks to get all the accounts set up. Anyway, I'm not sure if you or someone on your team will read this, but I'm super grateful to have picked up your book. It's been seriously game-changing already.

Adam, thank you for emailing that and taking the risk of us not reading it. But no, we actually read every email. Jenna, now we're getting so many emails that we actually have a dedicated employee just to read all the kind words coming in. And respond to them because we want to make sure that you're being served. You know, sometimes I just can't stand myself. So like, all these shadows are beautiful and wonderful. They're all about Profit First. And this is how pathetic I am at times. I'm like, I have other books out there. What about—

what about—

no one talks about The Toilet Paper Entrepreneur. I wrote that, or Clockwork. Not nearly as much. And now I get it why bands like— I saw Def Leppard with Jason Spencer. I went out to Vegas to see them. They're in Sin City right now. And they played some songs off their albums that no one recognized, and everyone sits down, crosses their arms as they play that song. Like, we want the bands to play the hits we know. So I get it. I'm being hypocritical here. If you want profit first, I gotta bring it. But I'm also like, I want to play some other songs that I have that no one likes. Deep tracks. Yeah, please listen to Toy Paper Entrepreneur, a book that no one's ever going to read. I want to hear a deep track by Mike Ficala.

Did you, did you do with your other books? Did Uh, do your audio for your audiobooks?

I did the audio on all my books.

Yeah, yeah, yeah, that's cool. At least—

yeah, I'm gonna redo Profit First. I'm sorry, redo, uh, The Pumpkin Plan. On there I did some voice impersonations and that didn't go so well. What did you do? I do Bill Clinton because— and I don't say he's Bill Clinton, but I'm like, uh, there's one part where there's this character in the book I write about and he's got a voice like this, so I just talk, hey, did you know that the guest today worked for the Clinton administration? I did not know that. It's good, it's good, it's good.

I look on his website, it puts, um, I should whole interview like this.

Hey, Joey, it's good to see you again. How are you? All right. What do you want to say, Kelsey, before I cut you off?

You want to keep going?

It's actually not a. It's actually probably your best impression.

Pretty good.

Yeah.

All your other voices are so bad.

I thought my Julia Child's right. We're gonna have some coffee. That sounds like more forest comfort. All right. It's not entirely far. Sound like nothing. All right, uh, Kelsey, uh, thanks to Nextiva. It's our voice over IP phone system. They hired Bill Clinton to do all their, um, uh, voice reception services. So if you want that voice, hey, thanks for calling, uh, you know, Profit First Professionals, you can get that from Nextiva.

That's their new feature.

Yeah, they charge $50,000 to get the real voice. Um, we'll tell you more about them in a little bit, and I think we're good, right, Kelsey, before we kick into it?

Good.

Oh, and just as a cliffhanger, we're gonna play a game of the weird products today. That's your guys' favorite, right?

Yeah.

And we're gonna get Joey Coleman involved in that. His name's Joey. Uh, he's a mainstage keynoter. I had the privilege actually, uh, doing a follow-up to one of his presentations. Dude, this guy is like one of the best speakers I've ever seen. Seriously. Just entertaining. Um, fun. And, uh, he wrote a book called Never Lose a Customer Again, which right now, Joey doesn't know this, is our quarterly reading. So our company, the entire company, except for Jay Sloan, gets assigned a book to read. And we're reading this. So this morning at the gym, I was listening to the ring story, Joe. So I'm gonna ask about that in a few minutes, your wedding ring story. Joey Coleman helps companies keep their customers. An award-winning speaker, he shares his First 100 Days methodology for improving customer experience and retention with organizations around the world. He's worked with Whirlpool, NASA, Zappos. His Wall Street Journal number 2 bestselling book. It's called Never Lose a Customer Again. It shows you how to turn any sale into a lifelong customer. And we're gonna discover how to do that right now. Joey, welcome to our show.

Thank you so much, Mike. Love, love, love being here. And Jay, we should talk because I have a long history with tickets. Mine are not of the parking variety. I've been pulled over for evading a police barricade, for having too many people in the car, for failure to heed a direct police command to stop. But I've never gotten a ticket for parking in the wrong direction. We need to have a special little session with you.

It'll be great though, I promise. That's great.

We'll get you out of it.

Definitely will take some tips.

Evading a barrier.

Yeah, it was— there was confusion. Let's just say I've been pulled over 90 times. I've received 6 tickets and 3 of those have stuck. So there's some benefits to spending 3 years in law school and that's you learn how to get out of speeding tickets and other types of tickets. But you know, such is life.

Wow. So I want to explore the wedding ring story. I was just listening today, there was— and I love at the end you're like, The company name rhymes with— let me see this funny thing.

Yeah, it rhymes with Fidelity Mutual. Yeah, Fidelity Mutual.

Sorry.

Fidelity Mutual is the listing, and you work at Fidelity Mutual.

Sorry.

And I love that you read your own book. That's so powerful because the voice intonations and so forth, it drives home the points you're trying to make. But I thought this was a fascinating story in how to lose customers and to fumble the retention. Can you share that story with us? Sure.

So as many of your listeners might know who are married, the wedding ring is kind of an important piece of the ceremony. And my wife and I, we'd been married for a couple of years, and I was on an airplane, as I'm wont to do, flying here, there, and everywhere. And I took my ring off because my hands have a tendency sometimes to swell when I'm on an airplane. So I took it off and put it in my pocket. Well, long story short, I realized as I was connecting to the next flight that I hadn't put my ring back on. I put my hand in my pocket and guess what? No ring. I look all over the airport, I, you know, call the airline. I'm here, there, and everywhere. I spend months trying to track this down because, you know, it was really sentimental and a special memento from the day my wife and I got married. Long story short, couldn't find it, so I had to put in a claim with the insurance company, who proceeded to make me, you know, go through the process. And again, as I alluded to earlier, I'm a recovering attorney. The first step, submitting you have a problem. But once I, you know, kind had spent all this time in law school, I had learned a little bit about how the insurance game works. So I had a police report. I had, you know, detailed accounting of kind of what had happened. And when I had originally done my insurance policy, I had submitted an appraisal from a jeweler and said, here's how much the ring cost, and I would like a policy that covers the ring in this amount. And they said, sure, no problem. And we got it all signed up and I started paying on that. I had paid on that policy for many, many years. And when it came time to make my claim, they came back and said, great, so here's what we'd like to give you. And it was less than half of the appraisal rate. And I said, guys, wait a second. I understand that part of insurance is that you lowball me on the first pass, but see earlier conversation where I actually submitted the appraisal for what I wanted. They came back and they said, well, yeah, but all jewelers lie on their appraisals. I said, okay, fair enough. But does that mean all insurance companies lie on what your policy coverage is? Hmm. Because I specifically told you what I wanted it to be. And they said, no, well, that's just not the way we work. And I said, awesome, then that's just not us working together anymore. Because when you make a promise to your customers, especially if you work in the insurance world, the way they know whether you're going to deliver on that promise or not is when the chips are down and it's time to make a claim. And I just think there's a huge opportunity. I thought it's really representative of the world of customer experience today is that customers come into relationship with our business expecting one thing and they get something completely different. And the completely different is usually much, much below the standard and the expectation that they had when they originally decided to do business with us.

You know, some good came out of that story that you don't know about. I was so— I was literally upset because you paid a premium based upon that dollar amount. So it was agreed upon and they made you fulfill a promise of paying for that.. And then when the circumstance happened, they said, oh, we're changing the rules. And, uh, which of course will lose customer attention. But I got jacked up about that because that's so unfair. Uh, so it caused me to do 2 more bench presses. Nice. Yeah. So you gave me 2 more.

Good. I'm glad. I'm happy to have helped. Yeah.

Um, one argument you make in your book is that businesses, I want to say, overemphasize sales and marketing to the direct detriment of something else. What are we doing wrong?

So, and here's the thing, when we say doing it wrong, obviously that comes with a lot of judgment. And I'm a student of the human condition. Every career I've ever had, every different role, and I've had an eclectic career path to say the least, has focused on why do humans do the things they do? And what can we do to convince them to do the things we'd like them to do? So the problem is most businesses over-index, they over-focus on sales and marketing, the chase. How do we get customers? How do we fill the funnel? How do we prospect? How do we sell? How do we convince people to join our business as customers? And yet they spend very little time, effort, on money, on how to keep those customers that they've spent all this effort trying to acquire. And there, there's a couple different reasons for this. I mean, there's biological reasons, there's structural reasons, and then there's just the emotional reason. And we, I like, have a tendency to liken a lot of this apply that stuff to dating. Most people love the chase more than the catch. They love the excitement of the pursuit rather than the long-term, consistent, day-in-and-day-out continual relationship building. And so we're, we're already predisposed as humans to do this. Then we show up in a business where most senior leaders, especially in the CEO suite, come up through sales and marketing. So they're predisposed to that. Most people who focus on post-sale customer experience are reporting up to someone who is the head of sales or marketing. So let's just stop and think about that for a second. The post-sale behavior reports up to the head of sales and marketing, who promises you that they're going to tell the board and the CEO all about the issues post-sale, even though they're entirely incentivized to acquire new customers. Okay, there's structural challenges here, and as a result, most businesses are hemorrhaging customers out the back door. They're spending all of this time, money, and focus on customer acquisition, and they can even tell you they're their customer acquisition costs. But if you ask them how many of their customers are leaving, particularly in the first 100 days, they have no idea. But when they actually dig into the numbers, they find that across all industries around the world, it's somewhere between 20% and 80% of new customers will decide to stop doing business with you before the 100-day anniversary. Wow. That's pretty staggering, right? And this is across all industries I've studied. You know, cell phone industry, it's 21%. Restaurant hovers between 45% and 80%. Uh, software as a service is 30%. Banking is 34%. I mean, the numbers are just staggering and nobody's talking about this.

You know, to your point, I thought of the CMO. There's many companies have a chief marketing officer. There's no CRO, chief retention officer. Everyone reports up to the front end, selling and marketing. Correct. Tell us, you mentioned this 100 days, the 20 to 80% loss during 100 days. And I know in your book you put a lot of importance into it. Why is, why are the first 100 days so important and how do we leverage that?

The first 100 days are really important because all human beings are hardwired to remember what happens first. Okay, there's a great premise and scientifically proven around primacy and latency theory. We remember the first thing that happens and the last thing that happens. And those early days, the first 100 days of the relationship, are when the foundation is being built for the relationship going forward. This is where everybody comes to the table and they're feeling excited. This is going going to be a new relationship. The customer is jazzed because they think the business is going to be able to provide the product or service that they're paying for. The business is jazzed and excited because they've got a new customer, they've got new revenue, and everybody's super excited about this. But brain science tells us that almost immediately after making that purchase, the dopamine that had flooded the brain and made us feel joy, euphoria, and excitement about what was to come recedes. And as that dopamine recedes, it's replaced by feelings of fear and doubt and uncertainty. In common parlance, we call this buyer's remorse. Almost everybody in business has heard the phrase buyer's remorse. And yet I have the opportunity to speak to tens of thousands, if not hundreds of thousands of people a year. And when I ask, how many of you have heard of buyer's remorse? Every hand goes up. But how many of you have a system and process designed to address buyer's remorse in your business? No hands go up. So it's like we all know what the problem is, but we're not doing anything about it. And if you don't—

Why aren't we doing anything about it? I mean, it's so— when you say this, it's so obvious. Yeah.

Again, it goes back to, I think, that human condition. It goes back to the fact that in most businesses, the folks responsible for post-sale customer experience are the lowest paid, most overworked employees in a business. So they don't have a lot of standing to raise a red flag in the organization and say, hey, this is a problem. Most businesses have great systems and process set up for celebrating a new client? You know, there's bells being rung, there are trips to Napa for the sales team. There's all kinds of craziness. Do we celebrate when a customer renews? Or is it just kind of an expectation, a non-issue? It's really a question, I think, of where does your focus go? What are you paying attention to and what are you incentivizing your team for? Because there's lots of sales acquisition plans and, oh, if you bring in a new customer, you get XYZ. If you refer a new customer, you get XYZ. But what happens if you keep a customer or if you renew a customer? Not as much reward, not as much attention being paid.

I had an incident with a company that rhymes with Schmaltz Mart. Nice. And location here in Butten rhymes with Futen. And this was the weirdest incident. I went down there. I tried to buy about $300 of stuff. We needed to stock up the house with all this different stuff.. And, uh, it says I process my debit card and then it says the, the processing, processing, and it says transaction declined. It's like, oh, something's wrong with my card. I use a different card. It goes through. They charge me on both cards. So I got charged twice. I've gone to SmallSmart 3 times now with customer service and they have not been able to help me. They're putting the onus on me to show statements and prove it. I'm like, listen, there's a video recording. You can see it. You have in your— you've received the money. So talk to your cash department. No, sir, you need to come back. And I feel like, Joey, I'm between a rock and a hard place here. That's the best value I can get locally to buy, you know, some basic supplies. But man, they're making it so hard for me to be a customer of theirs. Why is the company, you know, you know, they've achieved such success, they still haven't figured it out. So part of me is like, why haven't they figured out? But part of me is like, does it really matter if Small Smart can be successful? Screwing over customers.

Maybe it doesn't matter. So here's why I think it matters. Two reasons. Number one, here in 2019, we are increasingly living in an era where customers care more about the experience than in recent years. So it used to be that you could differentiate your business based on price, and then everybody got the lowest possible price and we called it a day. There was no more differentiation. Then there was, okay, we can differentiate based on quality. Well, then we had zero product defect and, you know, black belt and everybody lowers, uh, you know, the defects so that the quality is fantastic. Well, then we add the internet and everybody's like, well, I want it to be available 24/7, 365. And the internet equalized that field. The only way to differentiate yourself in the marketplace anymore is the experience you create for your customers. And while I get that companies like the one you mentioned can continue to grow and build because again, their play is lowest possible price. There comes a point where that isn't going to be valuable to you anymore. I imagine, Mike, that you have told that story about what has happened with your debit card and your credit card being charged twice in a way that has spoken ill of that brand multiple times. In fact, much more than you would have told the story if you had had a positive experience, because we have a tendency to share our negative experiences more than our positive experiences. The only way this changes is if we start to vote with our dollars. The only way it changes is if we say, you know what, I realize I'm going to pay a little bit more to go to SmartGit, the competitor of that other place. But instead, if we start to do that, they'll have to change because businesses respond to dollars. At the end of the day, they respond to dollars. And the only way they're going to change is if they start to feel the pain.

Now, you talk about in your book the different phases of the customer journey. So that we can actually truly delight our customers and retain them. Can you talk— walk us through those 8 phases? Sure.

So there's 8 phases. They all start with the letter A because the theory is if you get number 1, it makes it super confusing to remember all of them. No, just kidding. It means if you get all of them right, your customers give you straight A's. Okay. Oh, there you go. All right. So phase 1, assess. This is when a prospect is considering whether or not they want to do business with you. Think of this as day 0 in the first 100 days. In common parlance, this is the marketing and sales portion of the relationship. Then we come to phase 2, admit. This is when the prospect acknowledges that they have a problem and they believe you can help them, your product or your service can help them. This is day 1 of the first 100 days. They sign on the dotted line, they hand over their hard-earned cash, they officially become a customer. We then go to phase 3, the affirm phase. Okay, this is that buyer's remorse that we talked about earlier. This is right after the purchase is made. They begin to doubt the decision that they just made, and your job as the business is to come in and reaffirm their decision to work with you. We then come to phase 4, activate. This is the first real moment of truth where you need to energize the relationship as you formally start to work together. So this could be a kickoff meeting. This could be when they get your product into their house and they open it and they start to use it for the first time. What is that first real interaction where they're going to get the chance to experience the value, hopefully commensurate with the price they paid for your product. The next phase is where most businesses fall off the rails, Mike. So I want to highlight this one. Phase 5: Acclimate. This is where you help the customer get familiar with your way of doing business. You have to hold their hand. Sure, you gave them the directions, but guess what? They didn't read the directions. Sure, you detailed in the contract exactly what the steps and the phases were going to be and how the timeline of the project was going to work. But they didn't read that before they signed it. Folks, you listening, most of you don't read the things you sign. Okay, it's okay.

You're human.

This is the way it works. And if you doubt the validity of that statement, just think about the last time you rented a car. There was a little box in front of you and you just kept clicking. I agree. I agree. I agree. Give me the keys already. Paying no attention to what you were agreeing to. Your customers are like you. They don't know what comes next. We need to hold their hand and guide them to become users of our product or service. We then come to Phase 6, the Accomplish Phase. This is when the customer achieves the goal that they had when they originally decided to do business with you. Every prospect has something they're trying to achieve. Now, as businesses, we think we know what they're trying to achieve, but we often misidentify it or focus on the wrong thing. If we're not paying attention to what our customers are trying to accomplish, we aren't going to be there to celebrate with them when they do accomplish it. And if we don't celebrate and we don't achieve accomplishment, we don't get to get to the last two phases. And the last two phases are Phase 7, Adopt. This is when the customer becomes loyal to you and your brand. And Phase 8, Advocate, when the customer becomes a raving fan referring their friends and colleagues to you. So those are the 8 phases that your customer has the potential to journey through. My gut instinct is the majority of businesses are losing them somewhere between phase 4 and 5 and never regaining them again.

So is that where we should focus in on improving our business for retention, those phases 4 and 5, or is there a diagnostic to find out a different area?

So I would say the best diagnostic— the first thing we want to do is we want to map out what our current experience is. We want to look at those 8 phases and say in each of those phases in the relationship. What are we doing? What are the touchpoints and interactions we're having? Are those working? Are they helping to navigate our customer from this phase to the next phase? If you wanted to find one that is highly, highly likely to be problematic in your business today, the two that you want to focus on are the affirm phase, that buyer's remorse. What are you doing after they give you the money, they sign on the, the dotted line to really make sure that you're letting them know how much you appreciate your business, how much you value them, and how wise their decision to work with you was. Or Phase 5, the acclimate phase, that hand-holding phase of, okay, what comes next? Because see, most things we buy, we leave and we go home and we never talk to that company again. That seems problematic for a long-term relationship. I want to know if you've used the product. I want to know if you liked the service. I want to be in more regular communication because the more regular communication we are, not only can we head problems off at the pass, we can figure out what what's going to go wrong before it actually goes wrong and fix it. But lots of times this is an issue of just staying top of mind for your customers. Now, this is interesting. A lot of salespeople will talk about, oh, how do we stay top of mind? You know, the best way to stay top of mind is just to be in communication with them and to not send these little useless emails like, it's been a long while since we've talked and I wondered if you needed any more product. Thanks. Thanks for reaching out to let me know that you absolutely care about you. 100%. That was so sweet, so kind of you. Instead of just touching base with no agenda, reaching out and saying, hey, how's it going? It's coming towards the end of the summer. How's life treating you? Did you have a good vacation? Hey, we're coming towards the end of the year. Has your year been going well? What are your plans for 2020? Taking a vested interest in your customer's life is the way you actually create friendships. And build rapport and build connection.

And those are the type of things that keep your customers coming back for more. So interestingly, you say you build friendships by acting like a true friend.

That's, uh, it's a really novel concept, Mike. It's very novel, very strange. And most people have zero context for how this works in their own lives. Yeah, just do what you would do with your best friends. Do that with your customers.

It's really that simple. Hey, before we let you go, what are some of the results you see? You've coached so many businesses through this process. What's the impact it has once you start nailing the affirmations, the acclamations, all the A's?

Oh, we've seen some absolutely incredible results. So for example, if you look at the customers that are leaving you, every business has customer defection. Every business has customers that are leaving the business. When we break down the numbers, because I know you're a numbers guy, what we found is that if we can stop 5% of the people who are leaving, just 5%, it will increase your profits, which I know is a favorite word of yours. Your profits, not your revenues, your profits, 25 to 100%. Holy shit. Okay, really can move the dial. And here's why. Most businesses are operating, as you guys know, at least at some level of profit. It's usually pretty minimal, right? But if a business has been around for a while, usually there's just a little bit there. Each additional customer you keep, you've covered all your operating costs. Your base costs are taken care of. So each dollar that comes in from an existing long-term customer is worth more than a dollar from a new customer because you don't have to recoup any acquisition costs. So that impact is incredible. But I'll tell you, the one impact that really— I guess it didn't surprise me, but what has surprised me is how prolific it has been throughout all the readers of the book and the listeners to the book is how much it changed the employee experience and how much employee retention and employee engagement increased dramatically based on the fact that we were focusing on the customer experience. Because I believe that customer experience and employee experience are two sides of the same coin. If you get the employee experience going well, the customer experience naturally goes well. If the customer experience is suffering, I guarantee the employee experience is suffering. So this helps you not only in the bottom line, it helps you within morale within your organization. And because I know a lot of listeners to the podcast are small business owners, oh yeah, it helps you to reconnect with why you got into business in the first place. I'd be willing to bet that most of your listeners didn't get into business because they wanted to make millions. That's a nice benefit, and that's a nice, you know, read Profit First, read Clockwork, pay attention to these things The blueprint is there, right? But most people got into business because they recognized a pain point that they wanted to help others avoid. But as we get into business and our businesses grow, we get caught up in the day-to-day operations and we disconnect from our original reason, what we were originally trying to accomplish, which is to change our community, to change our industry, to change the world. By focusing on customer experience, you can reconnect to the things that brought you to the table in the first place.

Joey freaking Coleman, I adore you. Hey, Joey, where can people learn more about you and pick up a copy of Never Lose a Customer Again?

Why, I adore you as well, Mike. I am such a huge fan. And as I shared earlier, I actually, for folks listening, I logged into the podcast like 45 minutes before the recording period. I was that guy. I was so I was so jacked to be on this because I've implemented so many of the things from your books in my business, Mike. And you're also a world-class speaker and presenter. So it's just such a thrill to be here, and I really appreciate that. Best place to find the book is anywhere you would shop for books: Amazon, Audible, Barnes Noble, wherever it may be. As you mentioned earlier, I narrate the audiobook. So if you've liked the sound of my voice, I can read the entire book to you. It's called Never Lose a Customer Again. Definitely check it out. There's also a guarantee in the first chapter of the book. Buy the book and you don't feel that it's worth the value, my email is in the book. All you have to do is email me and I will personally refund you the cost of the book. Forget—

and if I recall, you say, uh, and my lawyers made me say this, but you have to show the receipt.

Oh my gosh, let me tell you this. I had such huge— I had to sign a giant liability waiver with my publisher because they were like, Joey, what if people come back to you and, you know, want them out? We could lose a ton of money. You're gonna need to pay for that.

And I was like, that's fine, that's fine. I hope you get insured by Fidelity Mutual on that plan. Exactly.

You know what's great? And I, and I know you guys talk a lot about family on the show and about how do you communicate when you're the entrepreneur with your spouse. My wife has been an entrepreneur longer than I have, and we had a long conversation. We sat down and I was like, honey, what do you think about this? And she's like, this is an incredible book. If people want the refund, we have bigger problems. She's like, let's do it.

Let's just go all in.

I love it. And I was just like, gosh, reminder yet again that I married up, outkicked my coverage, and, uh, have really been blessed in this life. So anyway, no, Never Lose a Customer Again. Go find it there. For more information, my website's the best place to go. Joey Coleman, J-O-E-Y, like a 5-year-old, you know, but I'm much older than that. Joey Coleman, C-O-L-E-M-A-N, like the camping equipment, but no relation. joeycoleman.com. You can find videos there. You can find bonus downloads. And yeah, we just love people to participate in raising the bar on customer experience because let's be candid, the bar for customer experience globally is lying on the ground. If we just start to raise it a little bit in our business, it will force and focus our competitors to do the same, the other people in our town, the other people in our industry, and all boats will rise together.

Rock and roll. Joey Coleman, thanks for joining us on the show. Thanks, Mike. Thanks, Mike. Can't touch this. I didn't— he become a reverend? MC Hammer, is that true?

Is that fact?

I don't know. You guys are useless.

All right.

So, uh, I told you, you have no idea who I'm talking about, right? None. Small Smart in, in, in Fouton, New Jersey. Um, so, all right. So we're going to recap what we learned from Joey. We got a fun game today. We'll invite Joey back for that. And then, um, we do have listener mail, right? To answer. Okay. So the first, wow. I tripped. Cool. Okay. Uh, wow. That's a big intro for Nextiva. Voice over IP phone system. Really the innovators in technology. They have TrueVoice. They have phones that are in the color black. Um, they have a tornado warning system that starts meowing, so you can't tell if your cats need to be fed or if there's a tornado, which is actually both are pretty scary situations. Um, and they also have this thing called NextUp. IOS. It's their newest CRM system, and it uses artificial intelligence to proactively evaluate your client's happiness factor. It actually ties in nicely to Joe. So, of those 4 facts I shared, the last one's true. The other ones I made up myself. Just for entertainment.

All right.

Kelsey, I want to know— oh, it's a long build here. I want to know, Kelsey, here it comes, what you learned today.

So I love I super love this. I think it's like making customer relations about relationships. So it's not transactions. It's really about fostering an actual relationship so you understand what their goals are, what their needs are, and that you can be a part of their lives in a bigger way. And I, I feel like as he was talking about it, I was thinking about about, as an employee, I've loved those jobs where I'm able to have those relationships in a customer service setting. So in retail or in, um, like waitressing or whatever, where I'm allowed to communicate with them, I'm allowed to have conversations so that I know about their lives aside from that one transaction. And it is, it's so true. So right after that, he said how employee retention goes up, and I feel like that's absolutely true.

Nice.

Jay Bubum. Yes. Well, coming from previously a company that had amazing customer service, I totally 100% agree with the point that customer service or, well, customer engagement and employee engagement affect each other. So if you focus on, you know, employees, then you will in turn also affect the customer engagement.

You know, so Affinity Federal Credit Union, who we use, they, they get this. And I don't know if it's inherent or if it's trained, but, um, you know, we go, I go there with some frequency to set up, uh, accounts or do deposits or whatever, but maybe, maybe cumulatively 70 times a year. They all know my name. And the last time I was there, I walked in and all the tellers ducked below the desk and I'm like, what are you guys doing? And they start giggling. They're like, we know you want to set up another Profit First account. Like, they play around, and it's just a very human experience, and so I have such affinity toward— Affinity. Affinity, yeah. Yeah, go figure. Oh, maybe it's just been that subconscious dripping of affinity. Yes, yeah. Oh, they got me. They're a bunch of bastards, really. So for me, it was the primacy and latency effects. Yeah. And it's funny, I've noticed this. If you ever ask a couple that's together, and even if they're— You ever go to dinner with a couple and they're kind of like fighting, but they're fighting in front of you, and you're like, Oh, they're telling a story and the other one interrupts, and then they're like, oh, Kelsey really needs to know that, so they bring you in as the witness. So uncomfortable.

It's so uncomfortable, right?

Yeah.

But that's like the perfect, like, story because that happens all the time.

It happens all the time.

Yeah.

Here's, here's a way to get out of it. Ask that couple about their right when they got married, um, the first like 3 to 4 months, which is the primacy effect. I, when I do that, inevitably smiles come in like, oh yeah, how we met and this experience. We put such significance in that first early part of our lives, and then it's the latency effect is what's happening in the moment. So we've got to break them out of the latency, like, oh, this marriage kind of sucks, that's why we're fighting, getting back to the primacy, and it kind of reinvigorates them. So I don't know, I just kind of saw that playing out in more than just corporate, you know, business relationships, but in life itself. Yeah, I thought you guys were gonna laugh at me. All right, Joey, hey, are you still with us, Joey? I am. Okay, good, because we're gonna play a game. We're gonna play a game now. It's called Weird Products, Joey. So you're Jake Blown, you're in. Kelsey, which is— what was— what do we call Kelsey last episode?

Kelsey—

oh, uh, Kelsey Ruins Everything. Kelsey Ruins Everything. So Kelsey Ruins Everything, Jake Blown, and Joey Coleman are here. Here's how the game's played. There's 3 products that I'm gonna read off. 2 of these are real products. They're all weird, I admit that. One of them is a fake product. You identify the fake. Now, I gave them all the description so it's in my tonality. But all of these products, the real ones, are based upon the real facts. I sometimes use poetic license. Cool? Cool.

Cool. Cool.

And so let me read them off, and then, Joey, just mentally prepare, because you're gonna be the first one to have to guess. Whew, no pressure. Okay.

No pressure.

Yeah. The first product's called Toylight.

Toylight.

Spelled T-O-I-L-I-G-H-T. Kelsey's already taking notes. The world's first toilet nightlight. One of our— one of the most dangerous moments in any house is the midnight excursion to the bathroom. Just imagine you wake up at midnight from nature's call. You may only have seconds to get where you need to go, but between you and relief is pure darkness. Until now, with our patented Illumina the Loo. That's good, right? With our patented Illumina the Loo technology, because I write these, but based on truth. With our patented Illumina the Loo technology that detects any motion, you will see the beautiful colorful glow of your destination. Perfect for the elderly. Perfect for kids. Perfect for you and your number 2. That's what it says. Toilet. All right. Next product, the shower microphone sponge. Everyone loves to sing in the shower, Joey Coleman. Now you can belt off your favorite song into your sponge microphone. Phone right after you scrub below the belt, if you know what I mean. The super absorbent sponge technology is great for soaking up suds and soaking in your best vocals. Warning: sponge clings to body hair. We are not responsible for any hair that you may get into your mouth while singing. And the sock peeler. The sock peeler. Kelsey has one of these. After a long day at work or working out, your feet are tired. There's nothing worse than having to peel off your socks by hand. The pain, there's something worse, the aggravation, the wasted minutes. The sock peeler solves one of life's biggest problems: taking your socks off. With our patent-pended— patent-pended— with our patent-pending technology, simply slide the peeler along the back of your calf into your sock, push the peeler button, within seconds your socks are off and ready for the wash. Peeler button requires 2 D batteries. Joey Coleman woman.

Which one's the fake product? Wow, what's fabulous is I could see personal use for all three of these items. Um, I'm gonna have to go— you know, you did a great job selling all three of them, Mike. Uh, I'm gonna have to go with the fake one is the sock peeler. And it's, it's the automated— see, I, I was envisioning a basically a stick. Yeah, like a shoe version, version one of the sock. Yeah, the battery operated is what made me think.

Too much. Yeah, I'm with that. So Kelsey, are you with Joey? Yes. So Kelsey thinks it's the sock peeler too. J Bone, let's do a trifecta here. Or are you going to— but by the way, J Bone's been nearly 100% on these.

So I know for a fact that the toilet light is real. My mother bought me one. No! Yeah, it's actually really hilarious in the middle of the night because it's like bright red in the bowl. It changes changes colors.

The other one was—

Shower microphone sponge. I can totally see people doing that.

I'm going with the sock peeler. For the first time in the history of the show, 3 people simultaneously got all 3 of these right. Right. That's unbelievable. Hallelujah. That's a miracle day.

Joey, thanks for participating.

My pleasure. My pleasure., uh, J Bone and Kelsey Ruins Everything. I appreciate you guys. All right, um, Kelsey, is there a question?

There is a question. It comes from Shelley Shaw.

She writes— Oh, I thought you gave me a dramatic pause so I can hit that again for Shelley Shaw.

I'm sorry. I'm sorry. She writes, I own a small accounting firm in my fourth year, and I'm wondering how I go about the process of setting up Profit First. I understand the concept. The problem is I'm operating from a revolving line of credit. So all my deposits go into that and my payments come out of that. So I don't understand if there's a way to move the income to other accounts. So in my mind, I have to get this LOC paid off before I can put money to other accounts, and it's a $150,000 line of credit. I hope this makes sense and you can help me or guide me in this because I'd love to start the process.

So, Shelly, uh, first I feel you. We need to get off that dependency of the LOC, line of credit, immediately. So how we do this is the line of credit is no longer a revolving line. You have to see it as a static line of credit. It's a one-time loan you've taken. Now, I know you're, you're hobbling along on it, but it'll only continue to cause that problem of hobbling along. So starting today, treat it like it's a static line. By the way, banks can do what's called a call to a line of credit you have. They can call up any day they want and say within a month you're responsible to pay it all back. That's in every contract. Wow. Yeah, Joey talked about people signing and not reading. That's one of the biggest things about line of credits. It's a freight train coming, folks. It's a freight train, right, Joey? Yes, 100%. Yep. So they can do that to you. So Shelley, start treating it that way immediately. Sure. Chart. This chart. Shelly. I think she just sharted. She did. All right. She's good. Don't even get near her. After you do that, Shelly, and that doesn't work, then start by treating that line as a static line of credit, meaning it's a one-time loan. Now start chipping away at it. Every deposit comes in, goes into your income account. You follow the Profit First rules. You allocate money accordingly. The profit starts accumulating. We're going to use that in part during quarterly profit distribution. Decisions to reduce the debt. Out of your OpEx, we're going to be continuing to chip away the debt on a regular basis, but we're going to keep moving it down. Do not continue to fund the LLC and borrow from it. It is a fool's folly. Plus, you may short yourself. All right.

That's all I got, Kelsey.

If you had a toilet light, you wouldn't short yourself. That's true. You only have seconds to run to the toilet.

What do you got for us, Kelsey? Don't forget to subscribe and rate and review us wherever you're listening to us.

I hope someone out there is laughing their ass off right now. Now over the shark mistake. But I think we lost like more subscribers than we gained on stuff like that. You know, one thing you should be doing too is, uh, checking out my website. It's mikemikalowicz.com. But listen, you can't spell it. Joey Coleman's easy to spell, but Mike Michalowicz, geez. So there's a shortcut. Go to mikemotorbike.com. That's right, mikemotorbike.com. Click on Get the Tools and I will hook you up with tons of free stuff.

See ya! I like when you said, I feel you.

It sounded like, oh, feel you. I love, uh, I love how you talk over the music so we're still recording. What did you want to say that our listeners need to hear? Oh, they don't need to hear.

No, say it again.

Did you forget that it was recording? I said, I feel you, but it sounds like, oh, feel you.

You.

Did you catch it? No, I didn't. Try one more time, Kelsey. Just say it one more time.

No, the one— I feel you.

It's—

you said, oh, feel you. Job selling all three of them, Mike. Uh, I'm gonna have to go with the fake one is the sock peeler. And it's, it's the automated— see, I, I was envisioning a basically a stick. Yeah, like a— that was version, version 1 of the sock. Yeah, the, the, the battery operated is what made me think.

So, Kelsey, are you with Joey? Yes. So Kelsey thinks it's the sock peeler too. J-Bone, let's do a trifecta here. Or are you gonna, uh— but by the way, J-Bone's been nearly 100% on these.

Uh, so I know for a fact that the, uh, toilet light is real. My mother bought me one. No. Yeah, it's actually really hilarious in the middle of the night because because it's like bright red in the bowl.

It changes colors. The other one was—

Shower microphone sponge. I can totally see people doing that.

I'm going with the sock peeler. For the first time in the history of the show, 3 people simultaneously got all 3 of these right. That's unbelievable. Hallelujah. That's a miracle day.

Joey, thanks for participating.

My pleasure. Pleasure. Uh, J Bone and Kelsey Ruins Everything, I appreciate you guys. All right, um, Kelsey, is there a question?

There is a question. It comes from Shelley Shaw.

She writes— Oh, I thought you were giving me a dramatic pause so I could hit that again for Shelley Shaw.

I'm sorry. I'm sorry. She writes, I own a small accounting firm in my fourth year, and I'm wondering how I go about the process of setting up Profit First. I understand the concept. The problem is I'm operating from a revolving line of credit. So all my deposits go into that and my payments come out of that. So I don't understand if there's a way to move the income to other accounts. So in my mind, I have to get this LOC paid off before I can put money to other accounts, and it's a $150,000 line of credit. I hope this makes sense and you can help me or guide me in this because I'd love to start the process.

So, Shelly, uh, first of Aphelia, we need to get off that dependency of the LOC, line of credit, immediately. So how we do this is the line of credit is no longer a revolving line. You have to see it as a static line of credit. It's a one-time loan you've taken. Now, I know you're, you're hobbling along on it, but it'll only continue to cause that problem of hobbling along. So starting today, treat it like it's a static line. By the way, banks can do what's called a call to a line of credit you have. They can call up any day they want and say within a month you're responsible to pay it all back. That's in every contract. Yeah, Joey talked about people signing and not reading. That's one of the biggest things about line of credits. It's a freight train coming, folks. It's a freight train, right, Joey? Yes, 100%. Yep. So they can do that to you. So, Shelley, chart— start treating it that way immediately.

Chart this chart.

They'll get you out of the line immediately, Shelley. Like, I think she just started, like she did, alright, she's good. Don't even get near her. After you do that shelling and that doesn't work, then start by treating that line as a static line of credit, meaning it's a one-time loan. Now start chipping away at it, and every deposit comes in, goes into your income account, you follow the Profit First rules, you allocate money accordingly, the profit starts accumulating, we're going to use that in part during quarter