I Made $6 Million in 60 Days To Show It’s Not Luck

Summary

• I increased a company's Enterprise Value by $6 million in 60 days by tackling three key issues using data.
• We boosted sales from 56 to 93 units per month, which created fulfillment challenges and reinforced the problem-solution cycle.
• Initially, the company didn't track important metrics like Lifetime Value (LTV), Time to First Value, customer satisfaction, and Ascension rates.
• I emphasize the importance of Time to First Value as a crucial indicator of customer retention and long-term commitment.
• Breaking down services into smaller chunks and showing progress can enhance the perception of value and reduce the time to the first value.
• For example, in my previous business, Gym Launch, we focused on getting a high ticket sale in the first 7 days to triple LTV.
• I outlined the poor initial state of the company: Time to First Value at 47 days, nonexistent customer satisfaction, and no backend or Ascension revenue.
• To tackle high churn, we aligned customer success (CS) with sales, being proactive and knowledgeable about common customer issues.
• By knowing the customer's next problem better than they do, we could plan our solutions and subsequent upsells effectively.
• Metrics, though often neglected, are crucial to improving a business. Without tracking, there is no incentive or measure for improvement.
• We overhauled customer onboarding, creating a tight and responsive process from sale to implementation, with clear steps and communication.
• Introduced a CRM to track crucial KPIs like Time to First Value and churn, and to automate customer satisfaction surveys.
• We commissioned the CS team based on performance metrics, incentivizing them to reach and exceed targets for customer success.
• I devised a backend offering, creating a new revenue stream where customers could pay to continue after their initial commitment.
• Improved the Time to First Value from 47 to 34 days, and increased customer satisfaction to 98% post-onboarding.
• Developed backend revenue from nothing to $140,000 in 60 days, which equates to close to $1 million annually or about $6 million in Enterprise Value with a 6x multiple.
• The key takeaway: even unexciting aspects like customer success can hugely impact a company's profitability and value when properly managed.

Video

How To Take Action

I would suggest starting by breaking down your services into smaller chunks to showcase progress and enhance the perceived value for your customers. This reduces the 'Time to First Value' which is a critical factor for customer retention. In my experience, this can triple the Lifetime Value (LTV) if done right, like I did with my previous business. Here’s how to put this into action:

• Track Your Key Metrics: Measure your Time to First Value, customer satisfaction, and Ascension rates. If you're not tracking these, start right away because what gets measured gets managed.

• Improve Onboarding: Overhaul your customer onboarding process for a tight and responsive experience. Outline clear steps and communicate frequently right after the sale, to keep your promises and build trust fast.

• Use a CRM: Implement a CRM system to automate tracking Time to First Value, churn, and to send out customer satisfaction surveys. This will also help track each customer service rep's performance for accountability.

• Align Customer Success and Sales: Proactively guide your customers through their problems. Know their potential issues better than they do, and make suggestions based on common challenges at each stage of the customer journey.

• Introduce Backend Offerings: If you don't have a backend, create one to provide additional value to the customers. This could be a new service or product that complements what they initially purchased from you.

• Incentivize Your Customer Success Team: Tie their compensation to performance metrics that encourage them to exceed targets for customer success. This will drive them to work harder at improving your LTV and reducing churn.

By implementing these steps effectively, I've seen businesses transform dramatically. Take each step one at a time, don't rush, and remember, the goal is to make your customers happier while increasing your business's value.

Quotes

"One of the never ending issues in business is that there's something called the problem solution cycle"

– Alex Hormozi

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"You don't have to deliver the ultimate result immediately…what you want to do is break it into many small chunks and show leading indicators of success"

– Alex Hormozi

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"People will make a lasting impression about your business within the first 24 hours after the transaction"

– Alex Hormozi

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"If you don't measure it you can't improve it"

– Alex Hormozi

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"We want to have that sting at the end that they know about, so that we can drive forward that time to Value"

– Alex Hormozi