I sold my last company for $ 46.2 million that was gym launch and one of the keys was learning how to grow businesses and so you might not know this but there's two ways that you can double a business one is you double the amount of customers that you sell every month the other is you double how much they're worth this video will give you seven things that we did to double how much customers were worth in our companies and the ones that we buy and invest in today and so this is a money checklist that you can literally immediately do by the end of the video that I do when I buy a company to make all the customers more valuable and ultimately make way more money so here's our outline and just to give you a little bit more context on this I uh gym launch was a company that licensed to gym owners we had over 5,000 locations that licensed our uh business model and one of the things that I did in the Consulting process which I learned before this as a white collar consultant for defense Contracting which you don't care about but that's okay is the Consulting process and the way that we discovered answers to hard questions was we would survey a large percentage of the population then we'd find the people who represented the solution that we wanted so in this instance I looked at all the gym owners and said who is the top 1% of gyms that have the lowest churn and I said if you've maintained that for six months or more tell me what you're doing and so I hopped on the phone with every single one of those gyms and then each one of them gave me 30 different things that they were doing to decrease turn to get people to stay longer but when I looked at all of the data across every one of these gyms that were in the top 1% all of them were doing five things and so I'll give you those five and I'll also add two more that we decided to do that cut our turn in half which ultimately made Jim launch a sellable company and we've now implemented this since in all the businesses that we buy so the first one is exit interviews now if you're in a business that you can't do that uh that's fine but I'd almost recommend that you do it and I'm going to break down each of these in detail on that board as soon as you get into it so I'm going to go through each of them as we go so let's start with exit interviews so exit interviews have this amazing thing that we figured out so the gym owners would say hey when somebody wants to cancel we obligate someone and we discuss it UPF front meaning when someone signs we say just FYI if you do choose to cancel or when you choose to cancel we just ask that you do an exw interview and the main reason for that is so that we can make the product better because if every time someone cancels we get to learn one thing then over time we'll be able to plug all the little holes in our product and people stay again and again and so what happens is you get on the on the phone with this person and you say why so sad right more or less and then they will then usually need to vent and so let me give you the rule of the angry boat so my first or second business Mentor I worked at his he was a fer and he said only one person can be the angry boat this is how it works if someone's angry about you or your product or your business the only way that you can actually solve the problem is get more Angry than them but you're getting angry not at them but at the problem and so they're angry at the problem and then they feel validated when you're even more angry and guess what happens if someone comes in and they're like this is talk I had such a terrible experience you're like that is ridiculous that they had that experience I can't believe you went through that that's absurd we have to get to the bottom this right now we will We I promise you we will fix this for you thank you so much for telling me but it's I I'm more upset than you are about this now what happens is they will then say well I mean it wasn't that big of a deal like I I appreciate you're a business owner things happen like thank you so much they feel validated and they start trying to calm you down and guess what happens you win right and so half the time when we'd get on the phone with these people half we would just say hey we're angrier than you and we said let me make it up to you and so we'd say hey all the money that you've paid up to this point I'm going to give you and you can pick an amount or you can give the whole thing say I'm going to credit that towards you stay so that I can make it up to you and if after that period of time you still aren't happy with the solution that I now have given the fact I know you're upset no worries but at least let me help try and make it up to you by doing that you can either save them or if they say something to the extent of like well I thought I was going to get way more help I thought I need more implementation I need more whatever I need more handholding believe it or not this is what's crazy many of these people actually get upsold and you say you know what it's our mistake you were actually sold into the wrong thing you need way more help than what we currently giving you at this silver level but you'd be perfect for gold because that actually what you described as the problem is literally what gold does and so let me make it up to you let me take everything you paid for silver and credit it towards gold and let's get you taken care of and by doing that we took a negative and actually made a more valuable customer and so if half your customers or half of that half upsell to something that's two times or three times more expensive your Revenue turn just disappears like very smart business move when I say Revenue turn means the amount of Revenue you lose because if you lose half the customers but the other half spend twice as much money you actually don't lose Revenue now the other half say F you and then they leave and that's okay all right and that's part of the game but if you can save half of the People by simply adding this one step guess what you cut down on turn so that is number one exit interviews the next one was reach outs now let me explain what this means so I had to come to this conclusion after looking at all the data across all the locations we had who were doing really well now a lot of them did this in different ways but my hypothesis around why this works so well is they basically approximate a real relationship so the reason that most gyms and many small businesses that are recurring especially in the service industry get stuck around 100 to 150 customers is because of something called dumbar number and so dumbar number is a postulate that people can only manage 150 close relationships or medium relationships in their mind after that it's just too many people and so because of that without any systems you can usually manage about 10050 people which guess what is what most people's business cap at until they have systems and so the reach outs essentially approximate what you do to have a personal relationship with someone but you put it into a system and here's the key part about these reach outs is that the reach outs don't need to be necessarily about the product you sell or their experience as a customer but more checking in on the human being overall and it doesn't need to be every you know every 14 days and you don't necessarily even need to sell that and this is a key point is you're not selling the reach out you sell the product you sell the membership you sell the subscription you sell whatever and then you just do this because on the back end you overd you like and one of the like the key points of this is you can do more than you say you do like your offer that you give someone you don't have to tell them everything you do you need to tell them enough to get them to buy and then everything else becomes surprise and delight and so you can know that every 14 to 21 days you're going to reach out to them and say hey how's life or hey I saw that your daughter uh is going to college or hey I saw that uh you went to that concert this weekend how was it what it does is it creates a relationship and and it's a lot easier you can write this one down a lot easier to quit a membership than it is to quit a relationship and so what we want to do is facilitate that bond that people will have and so what we did is we systematized this so that every trainer I'm just giving you what we did so that you can make it work for your business every single trainer had 40 or so customers that they were responsible for and they reached out on a every 14 to 21 days so if you got 40 customers it means you reach out to 10 or 15 people a week not a big deal and you just check in which hopefully you want to do anyways but by systematizing it we created personalized relationships at scale and cut down turn also that becomes an early warning system because if someone does have an issue they reach out to the person they already have already in communication with so it's not this like who do I talk to they just talk to the person they're already talking to right so you get way faster feedback from the front lines thing number three so we got this guy reach outs next one was events so this is member events now no matter what business you have whether you're a real estate agent you're a plumber you're a gym owner you're you're an agency it doesn't matter having events for your customers shows that you care but more importantly you can also make money from them so let me explain so at the events we made the events for everyone so customers could bring their friends they could bring other potential customers and by doing this it actually became lead gen for us too so we more than paid for the events in the sales that we're able to do with the events and so if you say hey I'm just going give you the gym example hey bring a friend to our event everybody brings a friend great you have twice as many people there as you normally would and then of course you make a crazy offer while you're there for anybody's a friend say Hey cuz as an aside if you don't know this referrals are typically worth two to three times more than than normal cold customers and so if anyone if you should pay for any lead the most it should be referrals or be willing to pay the most for referrals and so out events the way that we do this and I I'll give you the I'm going to give you a little tip here so number four is handwritten cards I'm going to show you how these work together all right so that means handwritten card we found out that handwritten cards work every sixish weeks that also tends to coincide with the Cadence that you can run events for your members now an event if you run it afterwards your turn will go up people get a lot of value and they say you know what I got enough value I want to leave and so the key to making events work is the open loop you have to tell them when the next event is going to be while or right before they have this event so they always have something to look forward to otherwise they'll get the value and then they'll leave and I found this out the hard way which is why I'm telling you always have the next thing in place place now the key to making the referral thing work is that you send them a handwritten card with their name you sign it whatever you say hey we appreciate you we know that you could choose you know a lot of places to fly thank you for choosing Alex Airlines whatever now here's the PS statement this is the important part you put PS at the bottom and you say take a picture of this card and text it to a friend in a three-way keep your mind out of the gutter in a threeway and that way you're your friend is invited to so you write them the handwritten card you remind them of the event that's coming up so that one they it shows that you care you took the time two you're giving them a benefit to the theme of the event you call it crazy sock Wednesday whatever who who cares all right then that's obviously a gym scenario if you have marketing you would make it themed around something else then you say invite another business owner and if they have this picture at the door they'll get LED in and so they then get kudos from their friend to inviting them to a free event where you generate leads from it and so you reinforce the relationship with the customer you reinforce the personal tie and you give them a benefit while also allowing them to give a benefit to somebody who becomes a customer of yours and by doing these two things together check check we kept more customers so the fifth one and this is this is if I had to I'm I'm I'm getting to the best ones last because uh YOLO all right uh this was attendance tracking all right this one's big all right we're getting into the mey the mey mees the double meets the double meet retention tactics calm down Jason all right all right so so we have attendance tracking so what we were able to see from tracking attendance at our gyms is let's say it's it's somebody on a three times a week membership so you have three times a week they show up then three then two then two then one then zero and they'd cancel all right this is pretty much you could see it you could just see it clear as day people just start they fall they come down once and then they slowly trick off and then they cancel which by the way the easiest correlation with cancellation is lack of consumption so if you want people to stay and pay you got to get them to use it and one of the things I had in the gym world that I I think is worth writing down for anyone is that no matter how cheap a gym membership is a gym membership you never use is never worth it and so whether it's $5 or $50 if someone doesn't use it even if it's the most amazing thing in the world they will not keep paying for it at some point because it's a waste is a waste and so on the flip side almost no one complains about a gym membership they use every day no matter how expensive it is because if you use it every day you're going to want to keep using it and so the goal is consumption and so attendance tracking helped us get an early indicator that someone is about to fall off and if you don't have early indicators in your business that's what you need to have because churn people canceling is a lagging indicator it means it happens after the bad thing happened we want to find out the moment the bad things happen so we can turn something from tragic to Magic that's a Disney saying but what we found is that if we found that somebody went and they missed one session of the three that they were supposed to go to if we reached out to them a bunch of times here the next week in this scenario same Miss Boom they're back at three back at three and we saved them because they found out that someone was actually paying attention to whether they were coming or not and so they felt accountable to showing up because someone was paying attention and so this works for whatever it is that you sell is you want to make sure that they know that you're paying attention to whether they're consuming it or not and the way that you actually do these reach outs is reverse of leads okay so let me explain with a lead like a marketing lead you reach out a lot of times the first day fewer times the second day fewer times the third day few times fourth day and eventually you stop reaching out to them right because they didn't they didn't buy they're not interested whatever with customers when you reach out you reach out once the first day if they don't respond reach out twice the next day if they still don't respond you reach out three times basically you escalate rather than deescalate when it's a customer because you're like hey we need to figure this out and by mapping this Reach Out structure to attendance tracking you can go from this scenario to this scenario and that's exactly what happened for us and for all the memberships that I've been a part of so that covers attendance tracking let's go to number six also a big beefy boy calm down Jason which is onboarding all right this one is like one of those silent killers that you would not believe how important and effective it is to implement this within within your business so now if you have a on to many type solution where you're onboarding you know you have 100 customers a day they get they get sold because you have a $5 a month $10 a month whatever thing you just want to automate the onboarding if you have any type of service that you can possibly I would say honestly even if it's a hundred bucks a month you can still do group on boardings right and so the idea is that you want to have a clear choreographed experience for day one all the way to day whatever day x and you want to tell them this is what's going to happen and the key word in this whole thing is expectation setting is you want to set expectations and you want to reconfirm the buying process buying decision so essentially you're reselling them on why they chose to buy from you to begin with a lot of people in the first 24 hours is where they get cold feet they back out they just say hey you know what charge you know charge back refund whatever it is they don't even consume the thing yet and so you want to reconfirm the buying decision tell them why it was a great idea give other reasons that they didn't mention and also confirm the ones they used to buy and then you say this is the road map this is what you can expect to see from us and the ideal client relationship you simply set expectations meet expectations set expectations meet expectations and if it's up to you I would rather you set and meet multiple times rather than set 20 and then meet all 20 on this day so let me give you an example if I had a marketing agency and let's say we did website design and SEO and whatever a bunch of other stuff if I had a weekly Cadence with them where I said hey this is all the stuff we did in the last week it would be more effective to say this is what we're working on today and then the next day send them an email be like hey we finished that part and tomorrow we're working on this in the same seven days they're going to get seven positive feedback Cycles with you and your business of you setting expectations and meeting expectations even though it's the same work simply taking a second to reach out to them at each of these scenarios to let them know what you did will get them to stay longer imagine you sign up and the next day they're like hey we already did this we're like oh that just reconfirmed the buying decision and they met the expectations they set and then you do it again and then again and again and by the time day 30 comes around they're like man these guys are amazing they're so on it and that's what you want customers to think about you and so you want to set the expectations you want to reconfirm the decision and I like to think of something like a walkth through which which is how do you use the thing whatever it is how do you use our service if this happens what do you do and this process you want to have this all over the place like this you're going to repeat over and over and over and over and over and over again because they're not listening they're on their phone they've got their kids in the backseat they don't really care that much about your business they bought it one time on a whim whatever you want to make sure that at least one of the times they hear part of it and they can assemble the whole Mona Lisa picture together through the many times you told them so onboarding if you're not doing it please for the love of God do it because you will be amazed at how many you will get you could probably add one or two months to your uh recurring Revenue by simply setting the acation properly reconfirming the decision and walking them through exactly what they just bought so that gives us our onboarding and finally lucky number seven unlockables all right so what's an unlockable great question Jason unlockables and Milestones okay now this is going to be so painfully obvious and yet no one does it what do you want a customer to do like really you're like what do you want a customer to actually do besides continue to stay and pay there's other stuff too right so right off the bat what I want someone to do is I want them to activate now if you haven't Define what activation is you look at the customers that have stayed with you the longest and you ask them what are the things they did early that provided the most value you can also survey this depending on the size of your customer base you say hey what was the thing that provided the most value and you can try and guess at this once you get this point right everything you do drives to activate customers so for example uh if you had a software that built landing pages you might find out that if you get someone to switch to a customer URL rather than you know XYZ software dot whatever their name is as soon as they make that switch they stay five times longer you want to figure out what that activation point was for gym launch it was if we get someone a $2,000 sale in the first seven days the likel they stay and continue to pay was monstrous and so we drove a lot of attention to try and make sure people actually made a darn sale that was really big in material in the first week duh right if I have someone in weight loss I want them to lose five pounds or more in the first week duh so these are these key points that seem like duh things but if that's actually so important why aren't we driving all of our effort towards that thing a different software company that I know uh they called the first five clients problem they had to get um trainers onto a software and they realized that if they just got the trainer five clients then they would never cancel and so everything drove towards getting the person the first five customers and all of that is Activation so that's step one step two is what else would I want from our customer well I I don't know about you but I would want testimonial right I mean if I activated them and they're happy now let me see if they can get me more customers so I want to get a review I want to get a testimonial and you can do that a variety ways they can do a post they can leave you a review on a on a review site they can leave you a personalized video number of different ways you do it or all the ways you can ask them to do those things and you get something else from them number three is I want a referral right you know people why do you hate me why don't you want to tell your friends about my product do you hate them or do you hate me you hate one of us right so we got to figure out what it is and I think I I used to like again this is where Rapport comes into place and how big your business is but like when I was like younger I'd be like why do you hate me so much Sarah and she's like what are you talking about I don't hate you i' be like you haven't sent any friends or do you hate your friends and be like I don't hate my friends I'll be like then let's meet let's hang out introduce me let's do a three-way and they're like whoa just kidding haha same jokes every time anyway and so you do the text intro you get you get it you're like hey take a picture with me and Sarah and we take the picture I take it on her phone we send it to her friend with me me as the third person that way they can't ignore you and you have it on the iPhone so it's all blue and everyone knows everyone's legit but because of that they have a face that they don't know the face they do know and the face they do know is in the text message thread so they can't be a dick to me because they know that Sarah likes me and that's how you can get referrals referrals number three number four you're like wait how's this Ty your retention don't worry don't you worry we'll get there is Ascension so uh this is actually wild uh there was a great research study that was done by one of these big Fortune whatever companies and they found out that the single greatest thing that you could do to retain customers is get them to buy something else because at a certain point people get this itch to buy like it's been a year since I bought something in this space and if you don't satisfy them by literally providing another offer to them they will just go buy somewhere else and so as silly as this sounds sometimes the best way to retain someone is to sell someone again and sell them something else or bigger and so if we think about this from a reverse standpoint if I had a customer I would want them to activate I want them to leave me a testimonial I want them to send a referral and I want them to buy more stuff and more expensive stuff well if that's what I want them to do then for God's sake why don't we make these things the unlockables now the unlockables are another fancy word for bonuses that someone gets after they do a certain thing so if I want everyone to activate then I might make whatever my kpi is for Activation get a big carrot on top of it they get a big jackpot for doing doing this thing right and so if I was in a digital environment let's say I have a school community so you can say hey if You' stayed for 3 months you get this big Mega training on ads that I did and the reason I have it at three months is because you got to do the fundamentals but if you stay past month three this unlocks wow boy do I have a bigger incentive to State a month three if I know I'm going to get this big jackpot of value and guess what I'm going to do a month three a month six and month 9 and the thing is you want to go some little human behavior thing you can actually extend this timeline it can go three and then you can go eight then you can go month 15 like you can extend the time Horizon between the big positive reinforcements and then just make them bigger and batter every time and they look forward to them more and more and more and so unlockables can either be on activity meaning they did something I'll give you this ad training if you leave me a testimonial I'll give you this ad training if you send me a referral I'll give you the as training if you buy the next level or it can be off of tenure which means they don't do anything besides stay and pay which hey we're also happy to do that you get this at month six you get sorry you get this at month three you get this month eight you get this month 15 whatever and so the unlockables can get people to stay that extra time and if you're not tracking this every month which you absolutely should be you should be able to tease that number up you should see every month okay we're at 3.7 months all right we're 4.2 months all right what do we do to go from 4.2 to 4.7 what do we do from 4.7 to 5.6 and you just keep adding and plugging the holes in the bucket because I promise you with retention it's not the bullet it's all of these things put together and when we did this it took our turn from 11% to 6% monthly now let me walk you through the final thing to explain why this is worth it so we're going to talk about retention why does this matter all right so let me give you a very simple example let's say you sell something that's $100 a month okay great awesome Alex $100 a month now let's say your turn as in the percentage of people who leave every month is 10% so you've got 100 custom customers month later you've got 90 so 10% churn now my lifetime value per customer is $11,000 that means they stay on average 10 months this is V1 this is pre everything I'm about to show you now if all we do if you follow everything I show you in this video is you get that 10% let's say what do we want to get it to survey says give me a number what do we want the CH to become 6% all right that'll be tough for math let's go 5% so we get turn from 10% to 5% doesn't seem like a big difference we go from 10 to 5 right we decrease it by 5% big whoop right well let me show you how big of a whoop it is calm down Jason all right it's that means that my new lifetime value per customer is $2,000 and while everyone else in your industry is obsessing about how do I get more customers how do I get more customers if you can double how much your customers are worth you more than d one you double your Revenue but secondly you'll more than double your profit because you don't have to pay the additional cost of acquisition every time to make that extra revenue and so all the savings drop straight to your bottom line so the incremental margin on this is huge and guess what other jackpot bonus you get if everyone else can only spend let's say if they're doing three to one $300 to get a customer guess what you can spend $600 to get a customer that's if you're keeping three to one which I recommend all right so you can get whatever 650 you get the point all right per customer so here's the crazy thing is that if you can only spend 300 you might be you might cap out at say $1,000 a day in ad spend but if you can 650 you might cap out at 100,000 A Day In AD spend so getting a double on LTV I'll give you an example for one of our businesses one of our companies we took we 1.9x LTV actually really similar to this it was actually it was so it was 2,000 to start and we took it to uh 3,800 and we did this through a massive list that I'm going to show you in a second but by putting by going from 2,000 to 3,800 that's an eight we went from $2 million per month in the business to $2 million per week that that's why this matters so let's dive in so we talked about what retention is we talked about why it matters you can massively make way more money by just changing the things you do inside the business also you'll be a better business overall but the third one was how to actually change it so I'm going to give you a bonus number four which is okay Alex I haven't done any of these things which should I start with if I was going to give you an order to order these things and I was just a nefarious which I which I am um I did these not in reverse order um I would probably think about this both in cost to put into place and then return from it because some of these things might be really powerful but take a long time and I'd rather you do this in order of like bang for buck all right so number one would be onboarding you literally just add one step in the process after someone gets closed and then you reaffirm the decision you set the expectations and then you give them the road map you give them the walkthrough what's what's going to happen next it's all you do all right and you talk to them make them feel like a human that they didn't justay money some glom big gray box of money making all right so number one we on Board number two is I would probably do unlockables main reason here is that you pretty much just set the incentive in place once you have it it's like a one-time fix like you do you figure out what your unlockable is and then you just set up when you want it to be and for example if you're currently people are currently staying four months then put it at month five just try and get them to get over that edge just give them something to look forward to Edge them on right so you want to just put it just path where they're currently cancelling so that would be the second thing that I would do the third thing that I would do would be the exit interviews that's a three there we go because you can pretty much implement this quickly and I think you as a Founder uh especially if you're getting into this this is so valuable like you get so much great data on what you can do better and you have the opportunity to save the customer and you have the opportunity to ascend the customer like so so high value definitely worth it uh if I had to go number four here attendance tracking this one takes more work but huge returns and so I would say this one has is super effective in terms of uh Power it just takes more work to do but this would probably be number one or number two in terms of like actual effect on on retention it just takes a little bit more work so i' do one two and three first all right let's do after that I would say survey says number we're five right here I would go reach outs we want to facilitate a human relationship this takes a little bit work because you got to you got to disseminate customers between people and if you don't have that then you have to set up systems to automate some of those reach outs and make and here's the key if they know it's automated it will not work it has to be systematized not automated if it's automated like how many times do you respond to the green text that's like obviously automated never you don't care because it shows that they don't care and so the best way and this is aism the best way to get people to think that you care about them this is a really key trick is to actually care about them that's it so reach outs and then I would say these these two I would Implement together so we'll go six and seven because they're just such a perfect little marriage of doing the events and the invitations via handwritten cards um this is something that's like fun it's value at it's the key is the open loop between the events and you get the referrals you get from the handwritten cards so that's the order that I would do these in and I've got something else for you something extra sexy because you know I love you little Easter egg for everybody else right now we've got the school games running and if you don't know what that is I'll tell you the the outcome of it which is that right now 3.44% of people who start the games and finish their first month all right first month just finish their first month make their first dollar online which I cannot explain to you like going from here wherever you're at now if you don't have a business to making your first dollar is the hardest bridge to get over there's so many things that feel unknown and so the fact that we're getting 3.44% I like could not be more excited about and so if you're somebody who's trying to start a business we help you facilitate a lot of the stuff in school automatically um and so automatically if you will uh and so uh you can give it a shot I've got a course we do a bunch of calls in there I put articles inside of the group there uh that are specific related to that business model uh and you can start absolutely free uh so if you want you can give it a shot school.com games everybody else keep crushing and if you have a business you want to sell go acquisition. comom see you later