Full Show Notes
On this teaching episode of The Client Whisperer Show, we dig into how tracking metrics can empower incredible decision making and transform your business (not to mention your clients.)
How difficult would it be to drive a car without a dashboard or speedometer? What about if you had a broken fuel (or charge for us tesla drivers) indicator? Yet most client business owners I find are tracking few metrics beyond revenue.
Tony shares how to make your metrics actionable so you can create negative and positive feedback loops in the right places. And yes, you need both negative and positive feedback loops. Want to know the difference? We share that too, giving easy to understand examples.
Lastly, because we want you to take action after each episode, we give you some specific advice on how to extract data from your clients.
Production for this episode is made possible by The Client Success System® For more information on the client fulfillment audits and to speak to one of our consultants, go to http://clientsuccesscall.com
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- Access the complete transcript. https://clientwhisperer.show/2t
Hey everybody, today we are going to talk about metrics, why they will change everything. Stay tuned.
Welcome to the Client Whisperer Show. I’m your host Tony Banta and I am the Client Whisperer. I’ve spent over a decade running multiple six and seven figure client businesses and I’ve learned that the secret to success in a client business comes down to one thing, leadership. Bad client behavior is the enemy and with the right curriculum, infrastructure and mindset, you can lead your clients to great success and scale your business the easy way. Metrics, metrics, data, tracking all of these ideas and KPIs, right? Key performance indicators. Another term in process improvement methodologies are critical success factors or CSF. And we talk about that quite a bit with our clients. So what are all these things?
What are they and why should you care? Well, metrics are the tracked data of everything that’s happening all around us all the time. So the first thing that’s really important to understand when you’re looking at metrics is that this is data that is occurring right now in the world. Whether you choose to track it or not, it’s still there. And that understanding that there is an objective reality that there is, that there are an infinite number of ways to interpret the reality that’s happening, but there is an objective reality that’s happening underneath all of those is the first kind of core understanding that you need to have to be able to use data to your benefit. So this, this episode is going to be a little bit of a primer or primmer if you will. I never know which way we’re supposed to pronounce that on metrics and what you need to do to manage them.
Now, truth be told, I don’t do a lot of this or at least I didn’t use to track a lot of data around what we were doing in our, in our client business. Much like a lot of you, when I got started doing my, you know, client business I was obsessed with, with marketing and sales and how to get clients right, how to, how to go through that. Uh, like that tricky runway period where we’re ramping things up. And then I had a bunch of clients and I was busy. Now I have a background in systems engineering and in several I’m certified in several process improvement methodologies, lean and six Sigma being two of them. Uh, I’ve also worked on ISO compliant projects where we used to do where we use data out the wazoo, right? But here’s the, here’s, here’s the tricky thing that that happened for me when, when I was first, uh, getting into some of my client work at least independently when I worked for, for consulting firms, when I was a partner in a consulting firm, we had infrastructure that, you know, did a lot of this.
But when I was doing independent coaching, I’m like, I made some forms, right? I made some forms using WooFoo or using Typeform was, was just coming out around that. And I would send them out to clients and I was all proud of myself, right? And then no one would fill them out, or one person would fill them out and they said, ah, this was great. It was a great work session. It was fantastic. FiveStars highly recommended. And then, but that was the outlier and very few other people would fill them out. So here’s why I’m sharing this. Does that sound familiar? Have you done something like that? Or have you not even tried? Have you assumed that that’s what people would do? So you just haven’t even tried that yet. It’s okay. I understand. Not judging, cause that was exactly where we were.
And so pretty soon I stopped. I tried that a few times and then I was like, this is, there’s no useful data, there’s no useful information that’s coming out of this. This is pointless. Right? And that’s all true. That was all a reasonable assumption for me to make. That was a reasonable decision for me to make. I say that because you might be in that exact same spot and you may have made that same decision and I want you to know it’s, it’s really okay, but here’s what you miss in that. And I’ll talk a little bit about some, some tricky ways, tricky, tricky ways that we can get our clients to fill out forms and give us data. The piece that that misses is that misses the piece that we miss when we don’t track that data is we don’t know what’s going on in our business beyond what we see and that makes it impossible to scale because the second that we scale our clients beyond what we can individually touch in terms of, you know, one on one sessions in terms of working with them directly in terms of us being able to remember what’s going on with each of our clients.
The second that we scale beyond that, we’re dead. We’re dead in the water and that’s a really dangerous place to live because when that happens, you get in and and any of you listening who, who have high six, maybe even low six depending on the business that you have, but high six and definitely seven figure businesses, you’re either living in this place now or you’ve lived in this place and you fixed some of these things, but what, and not having that data, what that robs us of is it robs us of the ability to have a mental model of where our clients are without us having to be in touch with them. So that creates this cycle, this, this, this, uh, this never ending, uh, you know, escalator or merry-go-round now, or you want to think about it, this, you know, merry-go-round of, of doom where we keep getting drug back into the client business because we can’t proactively manage by the metrics.
We can’t proactively managed by the numbers. So things seem like they’re fine, everything’s stable, right? It’s the entrepreneur’s dream. I’m off working on the next divisionary project, right? And then I get yanked back into the business because I don’t have any data or metrics to be able to manage. And when you’re dealing with clients, your clients emergency is your emergency. So this merry go round of doom. It’s no good what we, what we instead want to be able to do and no doubt any of you that have successful seven figure businesses or more and to some extent lower where you’ve implemented these kinds of things, you know exactly what I’m talking about and what this does inside of your business because as soon as you can have metrics in place and you can manage by those metrics, you have a feedback loop. You have a feedback loop where you try something and then it works or it doesn’t work and then you have more information.
You have education to make a better decision next time. Feedback loops are the cornerstone to systems. I would go so far as to say if you don’t have a feedback loop, you actually don’t have a system. You might have automations but you don’t have a system because systems and especially the best systems need to be self healing. They need to be self-educating, self growing. The system needs to feed itself so you don’t always have to have positive outcomes, but you want to have outcomes that you can track so that whether it’s a positive outcome or a negative outcome, you have data around what’s happened that you get to feed back into the system, feed it around and around. At a first principle, core level, if you are spending time implementing those kinds of positive feedback loops, you will like just in the nature of working on things, have fewer and fewer of those emergencies where you get pulled back in.
That may sound crazy because it’s like “I’m focused on putting these feedback loops into place and I’m beginning to manage by it, but that’s not working yet.” Keep going. If you keep going on that, the more that you build those healthy feedback loops, the less and less you will be pulled back into emergencies over time. But how do we stop that from happening now, today? Well, the short answer is you have to stop giving into emergencies, so you have to instead rely on the data of what’s coming through. And this is, is, this leads me to tricky tip number one. The very best way that you can track some data around what’s going on with clients is ask for information. Where on the, usually the front end on the, as a gateway, as a toll gate that they have to walk through, ask them that information before they get on a call with you. Asking them for a little bit of information.
Don’t make it hard, 30 seconds or less. If it’s more than that, then you really are going to push people away and that could be a bad thing. And if you’re stumped on how to do that, then we probably have to, you know, then you probably need some help. Probably need to talk about that. Uh, and I’m gonna mention this a little bit later, but we actually have our audit, uh, is actually coming up on open enrollment. Usually we have a wait list and uh, we, we, you know, we bring people on as we can in, in the period of time where, where we’re on a wait list, but we’re about to, to uh, launch an open enrollment season where we, we don’t have infinite capacity, but we have the capacity for good 10, 15 new, uh, audit clients that are, that are going to be coming through.
So if you’d like to be one of those, then you can find out some more information at clientsuccesscall.com and send us in an application and a book, a time for us to chat. Anyway, I’ll share just a little bit more at the end about what we do in these audits because we absolutely dig into metrics as well as some other subjective factors. But if you’re having trouble coming up with the questions for clients to answer in less than 30 seconds, then then you need to, to get simpler, you need to simplify down what are the lead or the lag indicators around your client success? And actually in the next episode, uh, we’re actually going to be, that will be launching on Tuesday morning. Uh, on the next episode, we’re going to dive into just a little bit more of that actually, and, uh, into the five critical metrics, the five critical success factors that you want to be tracking in your client business.
But you want to minimize the amount of time that you’re asking client to fill out. But that’s a great way before they get on a call with you, when they’re registering the signup for a call with you. Great way to gather some information. When they’re coming on a group call, put the link behind the form so that they get the link to sign up for the group call behind a form where you can gather just a little bit of information. Why are you making your clients do this? Well, because you want a feedback loop so you can make what you’re doing for your clients better. This is in service of your clients. It is, it is absolutely in service of you and of the business because you have data so that you can make actionable decisions, but it’s also in service of your client because it gives you the tools to be able to make what you’re doing better, more efficient, more impactful, more effective.
So that’s one way that you, that’s one sneaky way, tricky way that you can track data, uh, around how things are going for your clients. But here’s what that provides. It provides the feedback loop. Now these concepts are misused all the time. Positive feedback loop and negative feedback loop. I have in fact misuse them in the past. But here’s what they mean. A positive feedback loop is a feedback loop where the way in which it’s, it is arranged and the data that you are collecting allows you to make things better. The very nature of the feedback actually improves, and this is more nuance, but it can actually make it worse too. But the point of a positive feedback loop is that it pushes things in one direction or another. An example of a positive feedback loop is a positive example of a positive feedback loop is the population rate.
So the more population there is, the more people are, generally speaking, there are some nuances but for the, the, for the rest of human, uh, for, for all of human history leading to today, the more population that there is, the more the population is increasing. Because there are more people, more people means more people procreating, more people procreating means more babies means more people. Right? So that’s a positive feedback loop. Another example of a negative outcome, negative outcome but positive feedback loop is drug addiction. So people, um, who who have a drug problem, a substance problem, drugs, alcohol, things like that, the more they consume, the more that they need. That’s an example of a positive feedback loop because the more that your, the more that you are are actually consuming, the more that your body needs. It develops a dependence and so it needs that even more.
Here’s why this is important. Positive versus negative feedback loops is that you want to be creating positive feedback loops but with intention. Cause you can create a positive feedback loop in your business that can lead to negative outcomes, right? You can create a feedback loop where you’re, I’ve seen seen people do this where they ask their clients for more information in the name of collecting data. But the very act of asking for more information actually affects the clients psychologically, makes the client’s depressed, get they get down on their, they ha they have negative mindsets and then it actually makes their, uh, success get worse. So the more that they’re asking the question of, “Hey, how’s your success going?” The harder it is for the client to achieve success. Negative feedback, positive feedback loop, negative outcome. Different from that, a negative feedback loop is where, uh, in which the change in a variable offers the opposite change in, in a secondary variable or in the outcome.
So this is a feedback loop of the, the temperature of water. For instance, if we take, um, I just had this as a bottle of fizzy water that I happened to, to very much like, uh, and we have a refrigerator in the office around the corner. And, uh, when I pull this out of the refrigerator, it’s cold. Uh, if I were to, um, add some hot water or a hot liquid to it, even if I just leave it out in the room, it will eventually calibrate. It will eventually reach equilibrium or homeostasis a state where it will eventually become the same temperature as the space around it. So a change in the environment like the, you know, like this, uh, water, it probably won’t meaningfully make the room colder, but even if it does, the thermostat is going to register that it’s going to crank up the heat in the space and then it’s going to make the room warmer and thereby make my bottle of water warm, right?
Negative feedback loop. So what we want to do is we want to generate feedback loops in our business that lead to more powerful outcomes. Now we’re going to get into this in, in another week or so where we’re going to talk specifically about the number one meeting. We hate meetings around here. The Venture Greatly team fights really hard to eliminate as many meetings as possible within our team. We need to have some of them, but we eliminate as many as possible. But there is one critical meet. There’s one critical meeting that we’re going to that we recommend to all of our clients have. And we’re going to share some of this with you. We’ll even give you some tools around it so that you can manage your client’s outcome. And that will actually create a, a both a positive feedback loop for your client success and a negative feedback loop around those emergencies.
Because what, what do we want with emergencies? We want negative feedback loops to cancel them out. What do we want for client success? For client retention? For profit? We want there to be positive feedback loops so that they keep feeding themselves and getting better and better and bigger and bigger. So it’s important that we create these within our business with intention. And here’s the only way that we can do that is, you guessed it, with metrics. Cause what we need to do is we need to track the things that are going to feed us information to proactively make decisions. And this leads me to the number one mistake that people make when they’re tracking metrics in their business. And I actually alluded to this a little bit around metrics that we’ve tracked ourselves in the past. When I first, when I first got started doing, uh, coaching and independent consulting on the side, when, when I left the firm, the, the, the partnership that we had in, and I was just doing this on my own, I would, would send these forms out and I wouldn’t get very good data back.
So I just stopped using them. Right. Here’s the mistake. The data that was coming back wasn’t actionable. I was asking questions. I was asking how satisfied they were. I was asking on a, you know, on a scale it was doing the, the, uh, the, the, the net promoter score thing. Super useful by the way, but not necessarily in client businesses. I was doing that if, uh, of, uh, of, uh, of asking clients after we would do a, you know, work session, how likely are you to recommend us to a friend? Well that wasn’t actionable data and at the size that we were at with the amount of feedback that we were getting back. It just wasn’t actionable. So what does that create? Well, it creates cognitive dissonance because we have data that’s trying to create a model of how things are going, but it’s not telling us to do something different.
And here’s where we come into the classification of metrics and data and how to think about them the way that we think about them. Because different methodologies talk about this in slightly different ways. This is the way that we think about them and that we have our clients think about them and we want to share it with you. Number one, the highest level. Um, the highest level metrics that you want in your business should come from your strategic plan. So they should come from your strategic plan for growth, for profitability, for revenue, all of those things. The second highest, the second in the order of operations, and you will, the hierarchy of data that you’re collecting is critical success, excuse me. The second in that hierarchy of data are critical success factors. Critical success factors are those critical areas of your business that you need to track because you know that they lead to an outcome.
So sales might be a critical success factor. You might want to have some critical success factors. In fact, we’ll talk about them next week around your client fulfillment. How well is that going? You might want some around payroll or expenses so that you can manage your budget financially, right? All of those are critical success factors. Critical success factors generally are lead indicators. They’re also more general because we consider them to be the second of that hierarchy, first being your strategic plan, next being critical success factors. So that, so sometimes a critical success factor like sales could cover an entire department within an organization. And within that there are all kinds of numbers that are relevant. What’s the total number of leads that came in? What’s the close rate? Yada, yada, right? But the critical success factor is still how well is sales performing?
And then we break that up. We break that up into what are the key performance indicators. Now, you’ve probably heard this before. KPI, it’s, it’s, it’s been around for, for years. Uh, and a lot of internet marketers I hear, especially when they’re talking about ads, they talk about their KPIs or their key performance indicators. The important thing to know about KPIs is that they need to be one metric. Whereas a critical success factor could be a whole category. A KPI is going to be one specific data point, um, or, or one specific. If you’re thinking of a spreadsheet, this is sort of, it could be one column or one row of data would be the, the key performance indicator. The other thing that’s important to know about key performance indicators is that by themselves, by itself in general, any piece of data’s not actionable. There are two things that you need to make a data actionable.
You need to number one, know what is the target. The target range for that metric, right? For your sales. Well, you want your, your closing rate. If it’s cold traffic, you want your close rate to be on the bottom end, for most businesses, 15%, right? Ideally you’d like it to be 20% uh, is is you know, generally considered healthy for cold traffic at least at the time of this recording. It depends on the business and on the high end you might want the close rate to be 50% you know it’s somewhere. Again, depending on your business, there is an upper limit where if you’re enrolling too many people then you’re not filtering and you’re probably having your market, your marketing filter out too many people. So there’s almost always a higher limit to that. Of course you want to make, you want to manage time, you want to manage all the factors so you’d like to close every sale, but every call that comes through, but you will generally have an upper limit even for a positive outcome like that because that tells you other things.
So that’s the target range. Second thing for your data to be actionable is you need a trend. You need at least two data points, preferably three so that you see where is the trend going? Is this data point stable? Is this data point erratic? The more erratic it is, the more individual data points over time you want to see because a singular data point doesn’t really give us enough information, right? The close rate was 10% and our target range is 15 to 40 which would be a healthy target range of where we usually see those things, right? And uh, and and ours was, was 12%, uh, close rate. We don’t know is that a fluke or is that the norm? And the last thing you want to do with data is take one data point or even two data points and react tremendously to it because generally speaking, the more reaction that we give is itself a positive feedback loop for chaos.
The more reactions that we give, the more chaos that we have, the more we need to feel like we need to react, the more chaos we have. Does that sound like a feedback loop you want to be on? Not, not for me. So that is what you need to do for those key performance indicators so that you can make them actionable. You need there to be a target range. You might not know this right away, you might need a, a number of data points to be able to come up with that. Especially if it’s a metric where there aren’t industry best practices or someone that’s, that’s already been there and can record that for you. Uh, and you need multiple data points over time. So this has been a primer. This has been metrics 101. I sure hope it’s been helpful. Uh, if you are listening to this and this has been helpful in the least bit, please do me a favor, go to uh, wherever you are listening to this and give us a thumbs up or a rating and review.
It is tremendously helpful to help those algorithms to let people know that this show exists. We have some amazing content coming up for you and that would just be be so wonderful if you would help us out by, by sharing that and leaving a rating or review if you would. Uh, like to, uh, the number one way that we’re trying to promote this right now is on iTunes cause the iTunes algorithm for podcast does so much for us. And, uh, so if you would be so willing, clientwhisperer.show, clientwhisperer.show and, uh, if you would go to slash review, that would be incredibly helpful to us. Lastly, and I promised that I would mention this. Uh, we are coming up on open enrollment for our audits. So, uh, the Client Whisperer Show is not the only thing that we do over here at Venture Greatly.
Uh, in fact, our flagship program, the Client Success System, uh, we like clients to start out by taking an audit and it is a painless process. We’ve had clients go through it in a couple of days. Sometimes it takes a couple of weeks depending on scheduling, things like that so that we can meet with your team. And the bigger a team you have, the more data generally we need to get from various team members. So we, I have designed this audit process to be able to capture both the, some objective data around what’s going on in your client business as well as we actually get together and walk through your client’s journey so that we can capture some of the subjective factors that only myself and our team are trained to be able to see. So if that is something that you would like us to do for you, uh, you can, anytime you can can join the wait list at clientsuccesscall.com that link is in the show notes or you can join open enrollment until our slots run out.
And we have an open enrollment running right now. So if that is something that you’ve been thinking about or that is appealing for you and your business, let us know. You have our money back guarantee. By the way, if we go through the audit and we do not find an equivalent amount of value for you to increase in your client business is what you paid for the audit, we give you your money back, no questions asked. So that is something that we’re trying for this enrollment period. Terms and conditions may change over time, especially if you’re listening to a replay. But, uh, we have that guarantee because we are so confident that we can find that value in your business. Actually, we almost never don’t find 10 to 40% of top line revenue of a business in a low hanging fruit that we can help them, uh, we can help them take advantage of. So we want to be able to do that for you in our audits. If that is something that sounds appealing, if you feel bogged down with client fulfillment, if you’re wondering what you can do to, to scale what’s what’s coming up ahead in those next milestones as you scale, or if you know that your profit could just be your profit and client retention could be better, then it is a really good idea to at least apply for a call and chat with us. We’ll let you know our honest feedback. So
thank you so much for tuning in to the Client Whisperer Show. You can get the show notes as always at clientwhisperer.show/2 this is episode two and start to track some of those metrics in your business. Will you? Talk soon.