The 3 Questions I ask in Order to Grow My Business

In a prior video I did, I talked about the necessity to be narrow in our offering to really achieve elite status. But most businesses diversify overly diversify, especially early on because we believe as an entrepreneur way to grow our business is to do more things. So if I simply add on this and that, I can sell more and it works until it doesn't. I call it entrepreneurial entropy. Keep on diversifying, diluting our ability. Since in the early stages we have a captive audience, a customer too, that will keep buying from us, we see a revenue growth a until it doesn't work anymore. Why doesn't it work anymore? Because with dilution of our product line, we dilute our ability. So the more variability we have, the less we can be elite at any one thing. The best customers buy the elite offering typically. So we need to be the best. In fact, through Prosper Group, our investment company, we're working with an organization that's doing $7 million in revenue. It's heavy in inventory. So when we do what we call the real revenue analysis where they really generating minus inventory turn, it's about $2 million company they've diversified, meaning they're not elite anything. And the one thing they're really elite at, there's so much demand for other stuff that they can't focus on that. And so now they're having delays. So while the output, when it's done, it's excellent, it's taking too long. It's another component of eliteness. It's quality, it's efficiency. So this business, what we're doing is we are quickly narrowing down the scope of what they do. So if you didn't see my other video on the Pareto principle, that's how we do the analysis around it. What I want to do now is focus on three key question you can use to differentiate your business and really stand out in the market. These questions are so important, I think they'll become a game changer for you. So perhaps you want to write this down and put it above your desk or tattoo on your forehead or something. First question is this. And these questions, I consider them Jedi mind trick questions. And you'll, you'll understand in just a second. Says what am I doing right? If you saw my prior video, I talked about the elite customer and the top 20% customers who value you tremendously. I told you to call upon them. They're the heart of your organization. If your best customers are buying your best stuff, they are the heart of your organization. Why don't you call in these customers to Ask them, what are you doing right now? This is a Jedi mind trick. And I'm going to give you an experience around this. In my prior, prior, prior organization, I had a company early on, right when I graduated college and it was in computer systems. I went through that analysis, the Pareto principle. I don't mean to throw that kind of back up on the screen here so you have context, but the Pareto principle is the 8020 rule. And if you remember, if you saw the other videos we did this concept called the overlap. And this was your clients, this was your products. And I was talking about these clients, best clients. Buying best stuff is the heart of your organization. So this is where we're looking right now. Well, when I did this analysis for my company, identified that particular. There was a hedge fund and other customers. One hedge fund comes to mind that was one of our best customers to give context when they bought computer equipment from US, 10 or 15 PCs. This was back in the day where a computer company may still do, I don't even know, would come to your office and actually set up computers. And then when there was a need for a repair or change, augmentation of your computers in some capacity, we come back to your office. Was an on site thing. They would order those 10 or 15 computers which I would have to put on credit card. I was a small little business. I was putting on my credit card to stock the inventory and they would actually FedEx me a check before the delivery and say, hey, we know you're a small business and cash flow can be a pain, difficult. Here is the money for those computers in advance so it doesn't put strain on your business. Gosh, they're a definition of an extraordinary customer, among other things. Well, I went to them, the hedge fund. He wasn't really the manager, but he was the person we're interfacing with. He was a controller, cfo effectively. His name was Larry. When I asked him a question, what am I doing right? He started comparing me to the last computer tech company they had. And he said, well, you guys respond quickly. The last company took full day to get on site. Sometimes two, we're hedge fund, you know, we're trading stock and so forth. If our computer systems go down, we need them up now they have backup systems. So it's not like the computer goes down. They just sit there twiddling their thumbs. They backup systems, but they want their main information feeds going and so forth. So response time mattered, particularly when were coming on site. Said you guys, Mike, you and your colleagues get here on site usually within four hours. That's what you're doing right now. Here's why this is a Jedi mind trick. When you ask your best customers, what are you doing right? They actually don't tell you what you're doing right. They tell you how they place judgment on you, what they're observing in you and making a judgment on. So Larry was saying, I notice how quickly you respond effectively. And here is the greatest Jedi mind trick part of all. The thing you're doing right is the thing you need to, to improve. Write that down. What I'm doing right, that is the thing that you must improve. Now, let me give you some context. I spoke with Larry. I said, so Larry, you know, what are we doing? That's right. He goes, you respond quickly. The last computer, I took a day to get here. You get here within four hours. Now, the traditional approach for most business owners is like, oh, I get here on time. He's happy with that. Let me focus on other parts of my business. I'm doing this right. No, if that's how you're being judged, that's the thing you need to improve. And if you improve it, he, he, they, your best client will notice because that's how they're judging you. I understand you do hundreds or thousands of different things in your organization, but this customer is measuring very few of the things. So your job is to identify what they're measuring by asking, what am I doing right? They will tell you. Don't even know they're telling you, but they will tell you what you need to actually improve. So here's what I did. I dispatched myself or one of my other technicians to always be within about a 15 mile radius of Larry. Which meant if Larry's network or computers had problems, I could go to another customer. Customer, a secondary customer, if you will, that is already at, say we have an emergency. We'll be right back. We have to go to this absolute emergency. And we would get on site usually within 15 minutes. For Larry, regardless of the importance of the emergency, we weren't prioritizing based upon that. We're prioritizing simply response time to our best customer. And Larry, you won't be surprised here, was blown away. He even said, I don't know what you guys are doing, but my gosh, the service is getting better and better and better. You guys are rock stars. We fixed one thing. We improved one thing. We improved how he judged us. Now, again, you do hundreds or perhaps thousands of things. The customer can't see it. You get to see their perspective. When you ask them, what are you doing right? They will tell you the few things or the one thing they're judging you on. And that's the thing you need to improve. Because when you improve it, you will blow their minds away. That's what I'm doing right. The second question to ask your best customers is, what is the industry doing wrong? Now, I want to put a little caveat here. I'm not saying, what am I doing wrong? The question is, what is the industry doing wrong? We're going to put emphasis on that. Why don't we ask, what am I doing wrong? So you go to your best customer. It's the same customer analyzing. We're still focused here. Best customer buying best stuff. We're still focused there. And why don't we ask them, what am I doing wrong? The reason we don't ask them what you're doing wrong is because they won't tell you the truth. There's social consequence to this. If you are and I were in a room together right now, and you look at my outfit and. Which is very stitch fixy, you look at this, you may say, gosh, Mike, that's so lame. You should really dress better. If you want to be a professional, dress like XYZ. That may be the truth and you may be 100% right. The problem is subconsciously, when I receive that information, I go into defense mode. And my mind, even though logically I say, oh, I'm receiving this. This is so helpful inside. I'm like, who are you to say that nasty comment to me? And so there's a subconscious defense, which means there's resistance. But you also know the social consequence. You say that now I'm going to come maybe on an attack. And now there's an argument. Have you ever seen, you know, the booger on someone's face? I. People don't say anything. It's like, I don't want this person to feel uncomfortable. Now I'm uncomfortable. Everyone's gonna be uncomfortable. Let's just ignore. And hopefully it'll go away on its own. And that's the problem of social consequence. And if you ask your best customer, what am I doing wrong? Your customer won't tell you what you're doing wrong because it can come in battle. Oh, you don't respond quickly enough. Well, you know, we actually do, Larry. We do respond quickly enough. You're just not observing that. And now we're in conflict. So what's the out? Well, the out is industry. When I asked Larry said, what is the industry doing wrong? We're talking about the person outside the room. Think about it with me. If you and I were in the room together and I walk out, you're with someone else, you can say, gosh, the way Mike dresses is so stitch fixy, it's so generic. Here's what he should be doing. You can have a candid conversation about me in my absence. So with this question, what we're doing here is we're asking about the industry. So I asked Larry, I said, what's wrong with the industry? The person outside the room, and he said, oh, you know Mike, the last computer guy? When our network went down, they would come and fix it, usually after a day or two. And we get these bills and they were so confusing. In fact, we had a Palm Pilot. I don't know if you remember the Palm Pilot back in the day. My joke is it was the original smartphone that was neither smart nor a phone. Right. It was the original smartphone. And he said they would charge us to fix these things. And it's cheaper to buy a brand new Palm Pilot. I'd rather be charged that as opposed to repairing it. So the point is, the billing practices were confusing, felt obtuse and strange. And so Larry said, I just wish I knew how much I was being built. Well, here's the goal. When you identify what's wrong with the industry, this is how you can redefine the entire market. You can redefine the industry. So once you know where they're broken, this is opportunity for you to redefine the industry. Larry said, the building practices are confusing. I said, I'm going to go to a flat rate building fee, which I don't know if you work with an MSP or service provider. It's common now, but it wasn't back in the 90s when I had my business and that became a redefining approach. There was predictability in billing and so forth. So we redefined the industry by moving to that before most or any of our competition did. So identify was wrong by in the industry by asking your best customers the heart of your organization. Ask them what's wrong with the industry. And then if you find a common thread, I'm not saying interview just one customer, interview all your customers. When you find that common thread of what's wrong, that's your opportunity to redefine the industry. And if you pull this off, my gosh, you can have explosive growth. The third and final question I want you to ask is congregation points. And here's What I mean by this is, where do you hang out? Now you're asking your best customer this. So, Larry, I said, larry, I really value doing business with you. Thank you for your guidance on what I'm doing. Right. Thank you for sharing me with me. What's the challenge in the industry that you see? I also want to know, where do you get information, not just on the technology we do, but all information. How do you improve your business? Business? Are there podcasts? This is before podcasts existed, but are there podcasts you listen to? Are there conferences you go to and so forth? And Larry said, yeah, of course. He goes. In fact, all the hedge funds go to a conference out in Long Beach, California, in Greenwich, Connecticut. I was going to the Chamber of commerce at the time. That's where I thought you'd drum up business. And it was good for a small business. But I now wanted to target my best customer. Here's a question for you before we play this whole scenario out. If you right now pick your best customer, imagine having five or 10 clones of them, what would be the impact in your business? Would it be significant? Would it be extraordinary? I pretty much guarantee it would be extraordinary. Because every business I've analyzed, if you can copy your best client five or ten times, my God, it redefines the business. These are your best clients, after all. Well, Larry, by telling me where his congregation points were, he was telling me where the other birds hang out. You know, I'm saying birds of a feather flock together. He was telling me where the other hedge funds were going. So what I started to do from that day forward was always attend the Long Beach, California conference. Always goes to the one in Greenwich, Connecticut. I started hanging out there. I was the only computer guy. I didn't get a booth or anything. I just went there. If you simply appear in front of where your best customers are appearing, they will notice that. They'll observe you. There's a marketing technique, or actually it's about behavior, and it points to the frequency that we have an experience with something. On my own website, if you visit mike michalowicz.com as you scan the site, you'll see many pictures of me, not the same picture repeated over many diverse pictures. The more pictures you see, the more frequently you're having exposure to me, it actually starts to blur the line between, did I meet this person in person or not. It actually brings about trust. So the more frequently you're in front of someone, the more trust is built. So I just started appearing at these conferences, meet people, say Hi, how are you? Nice to meet you. By the third or fourth meeting people, I go, I see you all the time here. What do you do? Tell me about your hedge fund. I'm like, oh, I don't have a hedge fund. I do computers for hedge funds. I started to get business that way. Birds of fetter flock together and they we move in pockets. You just gotta find out where those pockets are and your best customer knows. So when you interview your best customer, you ask them what the congregation points are, your job is start appearing there now. Don't just interview one best customer, interview the whole suite of them and find out like, oh, there's these podcasts they listen to, there's magazines they subscribe to, there's conferences they attend. And you simply need to insert yourself at this point very quickly. Over time, you'll have a reputation for at least an awareness, but also a reputation for trust that you're the go to person simply because you're appearing there. And sure enough, you're going to win over tons of business. So there you have it. Here are the three key questions that transform business. Go your best customer. You know how to evaluate them. If you didn't see that video before, around the radio overlap, I really invite you to look at that. To understand this, this thing, what am I doing right? This is a Jedi mind trick. This is the thing you actually need to improve. What's the industry doing wrong? This is a Jedi mind trick. It's an opportunity to redefine the industry and congregation points. My gosh, stop trying to go everywhere to find your clients. This is how you do targeted marketing, just by appearing where they appear and there'll be a transfer of trust.