How to fix your leaky bucket
Description:
Welcome to Episode 10 of the Future-Proof Your Business podcast.
In this episode, we’re going to look at -
What I mean by a leaky bucket and what this means for your small business.
What is the lifetime value of your customers? And why this is an important KPI in your business.
Why it's important to focus on delivering value time after time.
How to apply the concept of Celebrity Service in your business
Making sure that people are happy, satisfied and delighted by having consistent and clear and effective communication across your business
How to exceed your customers’ expectations and make them want to come back for more.
And finally, I introduce you to the Ripple Effect which means that you've got a sustainable business that's working by itself, simply because you're showing up and doing the best job, to the best of your ability.
Here are the highlights from this episode:
(00:00) Introduction - What is a leaky bucket? What is it?
(03:42) How to get under the skin of a business owner’s business and understand their goals.
(08:50) Think of your business as a bucket and your clients as the water.
(13:20) Celebrity service is a great way to test out.
(18:46) How you can surprise and delight your customers in different ways.
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I'm Lucy Rennie, and welcome to my Future Proof your Business Podcast.
The podcast that provides you with everything you need to know to build solid foundations and ultimately Future Proof your business.
I'm on a mission to share my love for small business with you and help you to enjoy the extraordinary ripple effect that comes through harnessing the power of people and relationships.
And I want to make sure that you can reap the benefits of being a business and a brand that people know, like and trust.
I'm a huge champion for small business and a massive believer in the fact that people do business with people.
This podcast is here to inspire you, encourage you and support you on this roller coaster ride that is building, growing and Future Proofing your business.
Hi, and welcome to episode 10 of the Future-Proof your Business Podcast. And this week, I want to talk to you about your ‘leaky bucket’. You're probably thinking, oh, what does she mean by leaky bucket? What's that about? It's something that's really close to my heart, and something that I really believe in. And I'm continually talking about it. And there's a whole kind of chunk of a chapter in my book about basically fixing your leaky bucket. So in this episode, I'm going to take you through, what is a leaky bucket, I'm going to take you through why I believe that actually, really nurturing and looking after our existing customers, is where we should be putting our focus. We're going to talk about Celebrity Service, and we're going to talk about all the things that we can do to make sure that we are working really hard to retain our existing customers, so that, first of all, they don't go anywhere. But secondly, so they're so delighted, and so pleased with what we do that they genuinely want to jump up onto the rooftops and shout about your business to their friends, family, colleagues. And I'm going to take you through what that means for your business in terms of creating the Ripple Effect.
Last week, we talked about KPIs. I'm hoping that you took that on board and you created your own dashboard in terms of understanding what you're trying to achieve and how you're going to get there. And one of the things that I talked about last week was about customer satisfaction, and how important I believe that is for your business, and how we can really track different things within that to see the benefit of that and ultimately increase the customer lifetime value.
So I'm going to talk you through a little bit more about that. But it really does tie in. So if you put that down as one of your key KPIs from last week, then this is me talking a little bit more about why I believe that's really important. And especially if we want to be future-proofing our business, and creating something that's really sustainable. And I've got a bit of a croaky voice today, so bear with me, as I I go through this.
So, what do I mean by a leaky bucket? Okay, so for me, a leaky bucket is simply a bucket, it's got holes in it, okay, which means that you know, exactly what it says on the tin, if you pour water into a bucket that's got holes in it, then the water is going to start to leak through the different holes. And you end up going into this kind of endless cycle of topping up the water, the water coming out leaking away, and then topping it up again, and then leaking away. And it just becomes exhausting, because you're never actually going to be able to completely fill the bucket to the top, and get to where you want to be, because of all these different holes and the water kind of leaking out and slipping away. And very often when I start to work with different business owners, and I start to first listen to them, and I start to get under the skin of their business and their goals, but also what they're doing in order to get there and how they're operating and where they're putting their focus in terms of achieving those goals.
Very often what they do is they describe to me all the things that they're doing, all the time and money that they've invested, every day, every week, every month, and all the energy and the focus that's going into attracting these new leads and these new clients to the business. They're almost kind of proud to be saying; Oh, I'm on Tik-Tok and I've invested in this and I've spent loads of money on Facebook ads or Google ads and, you know, somebody said I need to be trying this so I've done this, and I've been advertising here. And I've got somebody who's doing full time Instagram meals, and sponsoring this and doing this and just listening to them tires me out. Because they're doing so many different things, in order to attract new clients and get the word out there and create the funnel at the top of their business, the pipeline into their business and into their sales and into what they're doing. Then I'll start to ask them, so what is the lifetime value? What's the average lifetime value?
How much does a customer spend on average with you? Do they come just once and then leave? Or are they spending more money with you? Are they coming? Are they starting, maybe it was service or product and then building up and buying more things because they're enjoying what they're doing? And they're getting satisfaction from that? And then I ask them also, what's their customer retention strategy? And this is where most of my clients will, in the beginning, go quiet. And it's because I think there's so much emphasis, especially for small business owners on finding that customer, marketing and getting yourself out there and doing all the things, taking up those trends and the latest things that we sometimes forget the essence of what we're trying to do. And I keep going on about this, but I'm a massive believer that the best way to future-proof your business is to do a good job, whatever that might be, whatever the positioning of your business, whether it's a low cost or a high cost, or it's somewhere in between, I believe that if you're going to be doing that, then you need to be doing it so well that you know, people, they want to come back for more. They shouldn't be thinking, I've had this, I'm going to go and try something different. You should be creating offers and products and services that people can't refuse or that because they've had such a good service, they don't want to go anywhere. Okay, so that's what I really believe. And one of the great ways again, talking about KPIs or tracking this is by looking at customer lifetime value.
And HubSpot describes this as “a metric that indicates the total revenue a business can reasonably expect from a single customer account throughout the business relationship”.
An example of one of my clients that I've been working with pretty much for the last five or six years. And I've been on a journey with them. So maybe we started off working in one particular way. And now that has evolved into different ways of working and different ways of adding value to their business, whether that was originally when I had the agency and it was much more of a done for you model to now, where I've actually adapted and listened to the needs of my clients. And I'm working more on a mentoring programme. So being that strategic partner to the business owner, but also mentoring their in-house apprentices or marketing team to enable them to future-proof their business. So all in all that customer lifetime value, first of all, because I've been working with them for five years. So obviously, that's good that you know, each year it tops up, and it increases in terms of that lifetime value. They're not just coming to me for one month, and then going away, they're staying with me, but also in terms of the service and the added value that I'm offering. It might be that actually they're buying into other things, they're coming to different workshops, I'm working with the team or we're making bespoke strategies or masterclasses for them, or they're joining the Future-Proof Club as well. So, can you see it's all about that relationship that I have with those clients and thinking about how to nurture them? Looking after them basically. I want you to think about your own business as the bucket and your clients as the water that's coming into that bucket and ask yourself, how leaky is your bucket? Yeah, how many of those clients each month, each week, each year are slipping out and slipping away? Which encourages you or forces you almost to keep on pouring in more water to the top of that bucket. And I think in today's digital and fast paced world, it is easy to get caught up in all these different marketing tools and new things and listen to all the gurus who are saying, keep selling, keep marketing and promoting and do what you're doing and bring in new clients. And don't get me wrong. I'm really not saying that we shouldn't be attracting new clients. And I'm really not saying that we shouldn't be marketing and promoting our business. You know, this is me, and this is what I do. I'm a marketing expert. You know, I completely obviously believe in this and what we should be doing, but I think that if we just focus on that then it's really detrimental to our business. And actually it becomes a tiresome cycle. What I want to do today is really encourage you to think differently about how you look at your sales and how you look at your customer retention. And really think about what you can do to influence that or to change the way that you do things in order to ultimately retain your customers and increase their lifetime value as much as possible. Which again, is going to enable you to future-proof your business to grow a lot more sustainably, whether that's customers, your customer base that remains either the same and increases, but also that those customers themselves are then becoming superfans and referring you and recommending you to their friends and family, which is word of mouth marketing and is the ultimate type of marketing that you should be doing. And, you know, if you can create that, then it takes away all the pressure of all the other things because it will sustainably drive new people to your business without you having to put too much energy or effort into it in terms of marketing. So we're going to look at things in a slightly different way today.
So first of all, as I mentioned before, it's making sure as a minimum, that you're delivering the best service and best quality products for your customers, and that you're delighting your customers each and every time. And again, that doesn't mean that you have to be high end or high quality or all those things in terms of kind of positioning, it might be you know that you're the bottom end of the scale, I could be an Aldi supermarket, you can still deliver the best service and quality products and manage expectations. So you can still deliver on what people are coming to you for. Secondly, if you're doing everything right, and you are managing those expectations, then the number of holes in your bucket are going to be dramatically reduced, because people are going to be satisfied and actually delighted by what you're doing. So they're going to keep coming back more and more. So what I want you to focus on is, yes, still think about obviously acquiring new clients, but I want you to really focus on delivering as much value as possible to keep hold of your existing ones. And particularly at this time, at the moment, when we're going into a recession. And when things are becoming a bit unsettling, and a bit unnerving. I promise you that if you can really focus on going above and beyond and delighting your clients by really doing the best that you can, you are going to not only support your reputation, and support the fact that your customers are going to be happy. But it's also in times like this, this is when our customers become more loyal. So they're craving that familiarity. They're craving that safety net, they're craving that sort of familiarity with those different brands. So they're going to reduce the way that they look elsewhere for different products or services, as long as you're managing their expectations and that they are getting exactly what they need to get from your product or service. So a great way of thinking about this. And a great way of testing this out for you is to think about Celebrity Service. So there's a great book, written by Jeff RAM, who has created this whole notion of celebrity style service. And it's about thinking about, if one of your favourite celebrities got in touch with you, and wanted to work with you, or come into your shop, or wanted to buy one of your products or services, just be honest with yourself for a minute and think about that. And would you do anything differently? Yeah, so whether that might be, George Clooney, or it might be, I don't know, trying to think of someone famous like Harrison Ford or whoever that might be, they got in touch with you today. And they said, right, Lucy, I want to come and I want to work with you. I want to buy one of your master classes, I want to work with you one on one. I want you to ask yourself, what would you do differently? Would you roll out the red carpet? Would you make sure that the whole shop is sparkling clean? Would you bring champagne and nibbles out? Would you know, get excited and really think about everything that's going on and prepare yourself maybe in a different way to what you would do normally?
So have a really good think about this. And make a note of anything that you might do differently. And then ask yourself why you're not doing those things already for your existing clients, what is it that is stopping you from doing that? And what's stopping you from really implementing that today? So I suppose my message here is that I believe that we should be creating celebrity service for every customer in your business, that every time you are engaging with your customers, with your audience, with your key people, you should be interacting with them and implementing what you do in the best possible way. Okay, so if you found a gap, if there's certain things that you noted down that you do, how can you incorporate that into the day to day of what you're doing. And I think for me, one of the key drivers to really, really, really create that celebrity service and really fixing those holes in your leaky bucket, the main way of doing that is to really look at how you communicate within your business. And sometimes we as small business owners, we can maybe disregard communication, we think of marketing, we think of sales, we think of operations, but we're not thinking about our communication. So we're thinking about how to attract new clients, we're thinking about telling our story and promoting but we're not thinking about how we're communicating on a day to day level with our existing clients or with people who are engaging in our services.
And so what I want you to think about is putting yourself in the shoes of your existing clients, or the customers that are coming into contact with your business. And thinking about what they need from you, what they need to know, how they're experiencing it, what's going to help them to get the best out of your product and service. And then, by putting yourself in their shoes, you're going to be able to think about, if that's what they're expecting, if this is what they're thinking, or this is what they need to know, then I'm going to make sure that I can set up in my business, the communication process that allows me to manage their expectations, and basically let them know what's going on what's happening, and the status of their product or service. Because very often what happens is the reason why people might get frustrated, or the reason why things go wrong, is because we've simply not communicated. And I can promise you that silence is never golden. So the best way of making sure that people are happy, satisfied and delighted, is to have that consistent and clear and effective communication, whether that's about how to buy from you, whether that's about when they can expect their product or service to arrive, whether it's about what to expect in terms of that product or service. So, you know, this is what's going to happen if you take them through the five key steps. So this is what they need to prepare. If they're coming to a swimming lesson, then they need to know about this, this and this, if they are going to be working on a strategy day with me, then they need to prepare this or they need to think about this, or this is what's going to happen. And this is the process. Okay, so really thinking about how you can manage people's expectations. And again, this comes into play, if something does go wrong. Because actually, we can take the edge off these things, and we can actually manage our way around things going wrong, because let's be honest with ourselves, when we're running a small business, things do go wrong sometimes. But actually, the way that we manage those things going wrong, the way we communicate about them is the best way to minimise the disruption, or minimise the impact by being really clear with people. So getting in touch to say there's been a delay or making sure that we are doing things in the right way or that that people have understood what to expect, etc.
And again, something which I'd probably do a whole podcast episode on in a few weeks is about really listening, and understanding what people are thinking, feeling and what they want from you and your business. If you can really integrate that communication process of what you need to do within your business, the more you can make that embedded, the more you can automate it and get it sorted. So it just happens. Then the easier it's going to get and the more impact it will have with your customers if you can just make it be a thing.
So the last thing I really wanted to talk to you about was, I think it's about communication, but it's about thinking about how you can, I suppose, really surprise and delight people in different ways. So thinking about how, you can really make sure that your customers are having the best possible experience. And one of the ways that I believe you can do this is to embrace something called the little things or something I call the little things and ultimately it's about how can you demonstrate that you really care about your customers about the people engaging with your brand, how can you really show that you actually really care that you really value their custom, that you really value their business and you know that you can make them feel as if they are that celebrity, as if they are the one that you want to you want to help and you want to make them feel like they are the valued customer.
So this is something where you can think about, maybe it's a welcome gift, maybe it's just a simple check-in to see how people are doing. Maybe it's a personalised phone call, just to see how you can help or to introduce yourself. And sometimes it's just a thank you. And I think this is where you have to decide what fits well with your brand and offering at the different stages of your customer service. So depending on your positioning, on your pricing, on what it is that you deliver to your customers, you're going to find the things that fit with that. And so a great way of thinking about that is particularly now as we are in this uncertain time, and there's lots going on in the world, and a lot of people are starting to feel a bit unsettled and a bit of nervous, this is a great way to really show your true colours and stand out from the crowd, by maybe getting in touch with your customers, maybe adding extra value, maybe providing all the tools or templates that will really help them to weather the storm. Or maybe it's about having a conversation with them and understanding what's keeping them awake at night so that you can then take those challenges on board and come up with something that's going to help them.
So it's about being able to go above and beyond and really delight and surprise your people, your customers every step of the journey. And so you know me, I just want to finish today with a simple exercise that's really going to help you to do this. And again, if you want to share this with me, then you can send me a copy of it to my email address at lucy@lrcomms.co.uk or get in touch on social media and we can have a chat about this and come up with maybe some ideas for your business and how you can do this. But the exercise is really simple. So take a blank piece of paper, ideally A3, so you've got a big piece. But if it's A4 or smaller, that's absolutely fine. And I want you to think about mapping out your customer experience. Okay, so this isn't about sales. This isn't about new customers, this is thinking about what are the different touch points that your customers experience when they start the process of buying and engaging with your business. So thinking about from the moment they make that purchase, what are the different types of communication that that come into play from you to your customers moving forward, so it might be the acknowledgement of the sale, it might be the receipt, it might be a thank you page, it might be thanks for your business, this is what to expect. And we'll be in touch in the next few days. Or it might be a clear itemised list of what the next stages are and what they need to do in order to prepare for the service or the product. Or it might be a way to get in touch with you if they have any questions. Or it might be that you create, and this is what I do in my business for new people who work with me is, I send them a handwritten postcard, where I welcome them to the business and tell them just how excited I am to work with them. And that if they have any questions, or they want to have a chat, then they can obviously get in touch.
Depending on the different clients, it might be different. For the mastermind members, they each get a moleskine personalised journal and a red pencil because that's linked to me and my brand. And it might be Christmas where we give gifts or different things.
So have a think about what those little touches are that you can create that will really ensure that your customers feel valued and cared for. And then think about how you can exceed their expectations and make them want to come back for more. So really, they're never second guessing what's happening, you're always one step ahead of them in terms of letting them know where you're up to, what's happening, whether it's good news or bad news, making sure that you're keeping them in the loop with everything that's going on.
And then finally, once you've created that map, that customer experience map of all the different touch points, I really want you to embed this into your business processes. So share it with your team, share it with the different people that come into contact with your business and help you to deliver to your clients and create a review loop.
So it might be that, you know, based on what we were talking about last month, last week, sorry about the KPIs. It might be that each week or each month or each quarter, each year, you check-in and you ask for feedback. That you check-in with your customers and you listen to them to see how they are experiencing it, is something working, is there anything you can do to improve? Is there something that you're missing, or how are they experiencing that? So it's really important today to really focus on fixing that leaky bucket, and really focusing on client retention, and doing everything you can to make sure that your customers stay your customers, that they love what you do and that you exceed every step. And that ultimately, they love it so much that they become your superfans. And they shout about you, they read your reviews, they write recommendations, and they really create that ripple effect, that is word of mouth marketing, which means that you've got a sustainable business that's working by itself simply because you're showing up and doing the best job possible to the best of your ability.
And, on that note, I'm going to finish there, I'm just going to add one last little thing, which is and we will talk about this again in a few weeks time. But I want you to think about the leaky bucket if you do have a team, and how you can ensure that you don't have any holes in your employee retention, and your team retention leaky bucket. So that's food for thought for another day. But yeah, get in touch and let me know how leaky your bucket is. I would love to hear from you and love to hear feedback or what you're doing to really show that you care and that you're in control of what you're doing for your customers.
Thanks very much for listening. If you've enjoyed this podcast, I would love you to either write a review, get in touch and share your feedback or share it with your friends and colleagues as well so that I can help as many people as possible to future-proof your business. Thank you.
Thanks for listening to the Future Proof Your Business podcast. I've been your host, Lucy Rennie, I hope you've enjoyed this episode. If you have, then I'd love you to head over to Apple Podcast, Google Play, Spotify or wherever you listen to your podcast and hit the subscribe button. And I'd really appreciate it if you'd leave a review and a rating and help me to reach even more small business owners like you who want to build a business they love.
And don't forget, you can head over to iamlucyrennie.com and sign up to my email list as well as find more tips and tools to help you Future-proof your Business on my website and in the show notes.
Finally, I'd love to invite you to come and join me and lots of other small business owners like you. In my free Facebook group, Communicate with Purpose.
You can find all the links on my website and in the Show Notes.
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I would love to invite you to come and join me and lots of other small business owners like you in my FREE Facebook group: https://www.facebook.com/groups/CommunicatewithPurpose