Momentum Podcast: 64
Your Most Important Client
by Alex Charfen
I'm going to share a very personal story with you and take you back a few years. In 2008, Cadey and I introduced a product to the real estate industry, known as the Certified Distressed Property Expert Designation. It was controversial. I was called crazy, by more than one person.
As entrepreneurs, we should all want engaging, passionate clients that are enthusiastic members of our tribe. We want them to be excited about the services we provide and share their excitement with others. When we are able to attract the right clients, and get them excited enough to talk about our business, our business becomes a movement, and movements create momentum. Every great business in history and around today has been a business but has also been a social movement. When we look at the companies that garner the most respect and attention, they are clearly social movements. Tesla is changing the way people think about vehicles, Facebook has completely redefined community and communication, and Apple has redefined multiple market categories with a product line so focused it could fit on most conference rooms tables. If you want your business to be regarded like these, then you must recognize your most important client. Many entrepreneurs overlooked them, or even actively ignore them. Here is how to identify your most important client and use your interaction with them to strengthen and expand your company’s social movement.
Full Audio Transcript
I'm Alex Charfen, and this is the Momentum Podcast, made for empire builders, game changers, trailblazers, shot takers, record breakers, world makers, and creators of all kinds, those among us who can't turn it off and don't know why anyone would want to. We challenge complacency, destroy apathy, and we're obsessed with creating momentum, so we can roll over bureaucracy and make our greatest contribution. Sure, we pay attention to their rules, but only so that we can bend them, break them, and rewrite them around our own will.
We don't accept our destiny. We define it. We don't understand defeat, because you only lose if you stop, and we don't know how. While the rest of the world strives for average and clings desperately to the status quo, we are the minority, the few, who are willing to hallucinate there could be a better future, and, instead of just daydreaming of what could be, we endure the vulnerability and exposure it takes to make it real. We are the evolutionary hunters, clearly the most important people in the world, because entrepreneurs are the only source of consistent positive human evolution, and we always will be.
This is episode 64, "Your Most Important Client." For this episode, I'm going to share a very personal story with you and take you back a few years. In 2008, Cadey and I introduced a product to the real estate industry, known as the Certified Distressed Property Expert Designation. It was controversial. I was called crazy, by more than one person.
We were that organization, that team, that went out and told the market, "Hey, it is so much worse than it is. It is so much more dramatic than it is," and we had a lot of people tell us we were wrong, but we also attracted a ton of passionate, engaged, and enthusiastic clients. I knew that's what we had to do in order to create the social movement that would overcome all of the challenges we were getting, the feedback we were getting, the pushback we were getting.
Here's what happened to us. Sometime in late 2009, or early 2009, about a year after we started selling our product, we had a post made online. I had Google alerts set up, so that I would know any post that was made about CDPE, Certified Distressed Property Expert. There was a post made by a client of ours, somebody who'd brought our product, named Joe Pryor, and the title--it's still out there if you want to find it--was, "Don't Rush to Get your CDPE Designation."
I remember getting the Google alert, clicking through, seeing the title, and thinking, "Oh man, what happened? This is horrible." We had such good feedback until then, and we were finally starting to win a significant part of the market over, and this post was put on a very popular real estate blogging site, called ActiveRain, where realtors were known for checking things and looking and verifying and seeing if they should buy something. I knew this could damage us. Here's what I also knew. The most important client you have is the one that complains.
I know this sounds crazy for some people, but here's what you know about someone like Joe Pryor, who goes out and puts a post up that says, "Don't rush to get your CDPE designation," he actually cares. He's engaged. He's willing to go tell people about a product that he doesn't like. He's probably willing to tell them about a product that he does like.
Then I read his post. At first, I got emotional. I was upset. I had to take a second. Then I read his post, and I realized we had probably made a mistake, so he had posted it probably 20 or 30 minutes before. I looked him up online and dialed his office line. He answered, "Joe Pryor."
I said, "Joe, this is Alex Charfen," and there was silence on the other line.
He said, "Hi, Alex. It's good to talk to you."
I said, "Hey, Joe. I read your post about not buying your CDPE designation. I just want to apologize to you personally. We missed. You're absolutely right." I read the details, and what had happened is we had had a delivery issue, and we didn't get him everything we should have gotten him. He didn't get all his materials on time. It took him a while to get things. We were exploding.
To give you perspective, in 2008, Cadey and I had sold 1500 Certified Distressed Property Expert designations. In 2009, we sold close to 15,000. Our company exploded overnight. The demand was massive. We were dealing with a lot of changes and a lot of growth and a lot of scale, and so I transparently explained to Joe exactly what happened, and I told him, "We missed."
We spent about 20 minutes on the phone call, and he gave me feedback as to how it felt, where he thought our misses were, and on that call I explained to him, "I think this is how we can fix this. This is how we can change this." I thanked him, and I said, "Joe, I just want you to know, it's engaged clients like you that help us move forward the most, because someone who's upset and doesn't say anything about it doesn't help us. We just keep making the same mistakes over and over again."
I gave Joe my personal cellphone number, and I told him, "Joe, if we ever let you down again, if for any reason you have a challenge in the future, please just get ahold of me directly, and we will do anything we can to correct it. I'm not telling you, you can't post reviews online. I absolutely think you should, but give me an opportunity to fix it and let me see if we can make it better for you." Then Joe and I got off the phone.
Here's what's so incredible about that interaction. One, Joe and I became close friends. I still consider him a close friend. He has bought just about anything our company has ever put out, after he bought the CDPE. About 30 minutes after I was on the phone with him, I got another Google alert--and you can find this one, too--and the title of that post was, "Be Careful What You Say About the CDPE Designation," and then Joe went on to detail how he was shocked that he got this phone call and I spent time with him and I worked through the issue with him, and I made it better for him, but that I also explained to him how I was going to make it better for everybody else.
Joe went from being someone who was upset and frustrated with us enough to post online a post that would damage our ability to sell, to, within an hour, going and posting another post about how enthusiastic he was about how we handled his complaint, about how excited he was about the membership, about how he understood how we missed, that anyone would've missed when they were growing and scaling that much. Joe ... Lifetime value of him as a client for us is massive. He's probably one of the top 50 or 100 clients that we've ever had, and we've had about 60,000 clients.
Here was the lesson for me. The most important customer you have is the one who complains. Now, here's my strategy to always cultivate complaints or feedback or information back, however you want to put it. Here's what I do. Most every product that our company ever releases is a beta. We tell people, "Hey, this is a beta product. It's a test. We want you to get into it. Tell us where we missed. Tell us where the mistakes are. Tell us where we can improve."
I'm constantly pushing for feedback. I'm encouraging complaints. I'm encouraging people to tell me where the issues are, to help us understand where we can improve, and that changes everything in product development, because you can do everything you want, as a product creator. You can do everything you want, as an information creator, but if you don't have client feedback, it's really hard to know whether your information is landing in the right place, having the right effect, moving people forward, creating momentum. When you start getting feedback, your clients will help you fine tune and improve your product more than anything else out there.
Strategy number one is I push for feedback in all of my products. I make sure that I'm getting as much feedback as possible from the people who are in them. Then we react. We show them that it's important to us, by saying, "Hey, here are the updates we made. Here's how we changed things. Here's how we improved the product."
The Certified Distressed Property Expert designation sold over 49,000 units, and, with all of the products that we had, we had over 60,000 clients. Our return rate on those products was less than 3%, in an industry where people are happy with 15% or 20%. We had less than 3%. The reason is, we took every issue that a client had, considered it, to make sure that we should do something, and then, where we decided that it was valid and where we decided it would help a lot of people, we made corrections and we updated our product. That constant process of improvement made it so people just didn't return the product.
The second thing, second way that I apply this today, is I mine, I scavenge customer service reports, our customer service department. When Justin in our office or Louis in our office is talking to somebody about something that's happened to our product or something that didn't work for them, to me, that is the most valuable feedback we have. A few of my clients today outsource customer service to another organization. It saves some money. It saves some headaches, but man. I've started talking to all of them actively about how important having in-house customer service, having in-house connection to the clients is, because throughout my career, that is a place that I've gotten feedback on what product we should launch next, what improvements we should make.
How do we improve retention? How do we improve lifetime value of a customer? Your clients will tell you in your customer service department, so mine that information. Ask whoever's answering the phone for you what they're hearing. If they're getting the same complaint more than once a day or once a week, then it's probably something you should react to, and it'll help you improve your product, improve your delivery, and retain clients longer.
Then, here's the third way that I apply this today, because customer feedback means the world to me. As a consultant, when I was working with the Fortune 500, we did everything we could to figure out how consumers felt. I used to go stand in retail stores and watch people make selections on a shelf, and then walk up to them and ask them why they did. Customer feedback is massive.
I worked with corporations that spent millions of dollars on focus groups and feedback groups and bringing people in and sharing products with them. Today, that's available to all of us as entrepreneurs, because the third strategy I use is we survey, and we actively ask our clientele for feedback over and over again. "Tell us how this product worked. Tell us how we can improve it. Tell us how we can make it clearer."
I interact with clients personally, even though my time is limited. I don't have unlimited time in the day to do whatever I want, but when we have a client who's upset, when we have a client who feels like we didn't live up to our promises, when we have a client who wants to understand why things aren't working for them, I still today will jump on the phone and understand exactly what's going on. I feel like I know that, when I do that, I get direct information about how we can improve, and we can always improve. By the way, even if I'm talking to someone who's the wrong client, even if the reason the person's not doing well is due to the fact that they really weren't the right avatar, the right person for our product, I can still figure out why we attracted them, make corrections, improve our process, and streamline our delivery.
For you, as an entrepreneur, I want to raise awareness to the fact that your most important client is the one that is giving you feedback, and feedback sometimes feels like a complaint. I want you ... As an entrepreneur, one of the things we should hard-wire in our minds is feedback, even if it sounds like a complaint, is appreciation. Feedback, even if it sounds like a complaint, is someone giving us their energy, their enthusiasm, their will to help us do better. Feedback, even when it's frustrating, will improve what you do. It will improve how your team does things, and will improve your deliverables.
For me, there's two ways to do business. You can sell a product that has low engagement to a lot of people and not get a lot of feedback, or you can sell a product that has extraordinarily high engagement to a passionate tribe that becomes your movement, that grows on its own, that will passionately help you put your product out there, follow up with people, help them buy your product. I mean, we have people hand-walk their friends to our sales pages and sign up for our products. Why? Because we've created products that actually have the exact intended effect they do. We know that we're going to get that result, because we've talked to thousands of clients through surveys, through questionnaires, through mining our customer service department.
For you, when you have a customer complaint, I want you to remember Joe Pryor. I can't wait to send this podcast to him, because it's interesting that that complaint that really punched me in the stomach the day that I read it--I remember it like it was yesterday--has resulted in me becoming close friends with one of the most incredible professionals in the country. Joe is ... He's an incredible real estate agent. He's an incredible leader. He's joined different organizations, so he can help the industry improve. He's coached tons of agents to improve what they do. I consider him a close friend ... a close friendship that originated out of a complaint.
Remember the three areas that you can really take advantage of this. One, release betas. Put your product out there. Get feedback. Ask people for feedback. Then improve it as you go. Make sure you're constantly and never ending improvement on your products.
Two, mine your customer service department. Talk to the people who are answering your phones. Heck, you might want to bring it in-house, so you can hear what's going on or talk directly to the people who are talking to your clients. Start looking. See if there's patterns, that people are giving the same feedback. That is an opportunity.
Three, aggressively survey your clients. Talk to them. Reach out to them. If somebody's bought two or three of your products, get on the phone with them and find out why. Customer feedback, even when it sounds like a complaint, will give you momentum.
Thanks for being here for episode 64 of the Momentum Podcast for the Entrepreneurial Personality Type, "Your Most Important Client." I'm looking forward to sharing even more with you tomorrow. Don't go anywhere. Come back. This is all about creating momentum for you, making your business grow, and filling you with the confidence, so that you can go out and create bigger outcomes, chase them down, and leave your Mark in the world. Thanks for being here with me today. Oh, and if you have a minute, leave us a review. We haven't gotten one in a while. I watch that all the time, and if you'd be willing to go onto iTunes and leave us a rating, one to five stars, and a review, let me know how we're doing, I would be incredibly appreciative. I actually want to let you know, just for listening, I appreciate you.