In this interview with David on the Dreamforce stage, you will learn that:
- It is possible to build an optimised business.
- All resources are available. People, knowledge, money, time and tools.
- If everything is harmonised into a seamless flow in a business, you get your freedom back.
- Hi David, nice to meet you again.
- Hi Laszlo, I am glad that we are here!
- David, tell me a little about yourself, so our Dreamforce audience knows you and your business.
- Okay, we are a mid-sized company with 20M revenue and 4M profit. We live in New Zealand and grow high-quality passion fruits. We export 96% of our products and I am really proud of our team and business.
- Thanks, wow this is amazing. Tell me about your products.
- Our products are the highest quality passion fruits from 100% Pure New Zealand. I started this business with 3 friends and family members 5 years ago based on our common values: passion, integrity and consistency. We had the vision to be a mid-size mature company where the shareholders, managers and employees are happy to work and stay until they retire. We also wanted a tiny office. This means we hated admin and repetitive work, so we wanted to automate the boring stuff, so we can focus on the fun stuff.
- Great. So how did you implement this grand vision?
- With your help, because we must thank you and your coaching framework, Laszlo. We did several cycles of deep learning of the market. We created 3 ideal customer personas and asked about 10 key customers. Most of our assumptions were proven, but we were surprised about their buying logic and psychology!
- What do you mean?
- They didn’t buy the cheapest products, but the ones someone recommended to them. We wanted to go Direct to Consumer, but first, we needed to establish an influencer network.
- Who was in this network?
- Local grocery stores, where the owner believed that our products were the best.
- So we identified the personas, the product-market-fit, channel to market and had 2 days of off-site workshop with 21 of our key influencers, employees, managers, and customers. We defined a 1+2 years strategy. It means we are locked in 1 year with detailed goals and 2 more years with broad intentions.
- Amazing! How did you execute this strategy?
- We created annual, quarterly and weekly plans and ran design, develop and deployment cycles.
- Fantastic. How did you go to market differently based on this strategy?
- We crafted a few promises and lots of offers. Our master brand promise was to inspire families to be healthy and happy by eating 100% pure organic passion fruits. Then we set up offline and online campaigns, and published lots of useful articles on different blog platforms. That created a buzz around our company on the market.
- So you didn’t spend on advertising.
- We did, but minimal. We just amplified our blogs to get better search result rankings. We learned that Google, Facebook, Amazon and maybe even Linkedin rank higher your organic results if you advertise with them.
- So I assume you had lots of traffic. But did it not overload your business? Usually, it is just digital noise.
- Yes, it started this way, but we split tested our campaigns every single time. So then we learned how to select the best potential customers, who fit into our persona profile. They are actually our best customers. They keep buying from us!
- Nice. How did you sell them?
- We didn’t need to sell in the old-fashioned chasing way, because our knowledge articles already qualified and warmed them up. The cold ones disappeared or just downloaded a free guide for healthy smoothies. Some just bought our $5 book. Some came to our $50 cooking and smoothie classes.
- Okay, so they became low-value customers. Was it worth spending time on them?
- Yes, because they were high volume! Never underestimate the revenue from the long tail!
- I see. So what happened with the warm leads, who had a problem to solve with passion fruit?
- They signed up for our online classes, joined our online knowledge communities and changed their life to a sustainable and healthy lifestyle. They shared our values so it was easy answering their questions. We didn’t really sell.
- But somehow you got their money, right?
- Ah, yes, we have a webshop and all go through there! It is so optimised on mobile phones that pretty much you can sign-up for a weekly fruit box in 60 seconds. Reordering is even faster. We also have a mobile app that gives customised lifestyle tips and measures their workouts.
- Haha, so you are not just a passion fruit farmer!
- No, we actually get more revenue from digital products and services than from growing fruit!
- Interesting. Now tell me how your team can deliver all these orders!
- Ok, so on the same values, we attracted young and experienced people who wanted to learn and maybe leave us to a bigger company. We created these monthly 2 day offsites to a nice winery and resort to teaching them about our industry, strategy, culture and operations. Earlier we wrote Standard Operating Procedure documents but in these 2 day workshops, we focused on the mindset training, not the skillset - how to do something our way, and not about the toolset - how to use our systems. This was way more fun! We played games, tasted amazing food and drinks. So we became friends. They were so attached to us emotionally and shared our culture, that only a few people left our company - they all went to travel!
- How did you organise the delivery of your physical and digital products?
- As I said our scripts and systems were documented in shared documents. So our staff just follows the instructions 80% of the time. 20% of course is ad-hoc decision making and exceptions, but they can deal with it on their level in the range we defined.
- Excellent. How about your customers?
- So we have a customer onboarding process for the fruit deliveries and the digital products as well. This is not a complicated process, but rather a welcome and thanks to you. They learn about our business family and we learn about them. Then we just support them as quickly and best we can.
- How do they ask questions and send their complaints?
- Haha, not many complaints were sent. But if there is a complaint sent from our website, online community, mobile app or we receive a 1-star rating anywhere, I get an SMS with the link to the customer record. So I call them as soon as I can.
- Wow. Is this not overkill? Does a CEO call an unhappy customer?
- Not at all. I learn from them more in 5 mins about my business than in a month from my team! I don’t like these calls but I need to keep my eyes on the ball. This is the least time needed with the highest impact I can make on my customers and business.
- So you serve all customers equally?
- Yes, we serve them equally, but we nurture them to be good customers. They receive credits if they rate us, regardless of the rate they give us. They also get credits if they write a review and recommend us. These are bonuses they can use towards future purchases or we have a gift catalogue of our branded merchandise and they can choose.
- How do you manage all these time-consuming customer care services?
- We have a potential, a current and a lost customer score on all of them. We just need to increase the score where we can. If the score goes down or stays still, we change something to test if we can increase it again. On top of that, we have an A, B, C category for hot, warm and cold leads and customers. This is based on the assumed and actual Lifetime Value - how much they buy from us.
- Wow. This is really amazing. Just two questions left. What do you measure and how do you calculate profit?
- We measure process throughput, so we can harmonise all our activities into a seamless flow. If there is more capacity somewhere, we still don’t increase advertising, as we could flood other areas that are not ready to take more load.
- So what do you do with the extra capacity? You waste it right?
- No, we always focus on optimising, learning and ideation in the free capacity. We have an idea register and everyone can submit one. We score these too and the best ones with the quickest and cheapest investment and highest return are approved and implemented.
- Smart. But you still do accounting and controlling right?
- Yes, we have a financial platform that does the accounting and we have a centralized analytics platform that gives us a bunch of dashboards and reports.
- Do you sometimes feel lost in these reports?
- Not at all. We have a single dashboard that is the control centre showing our volumes of products, leads, capacity and customers. Throughput is more important than growth. Because if we grow in one area, we might hurt the others. So we measure the smooth flow with volume.
- So you don't care about value?
- We do, but it is just a calculation once we know the volumes.
- How about the direction, where the company is going?
- This is the vector. Everyone is incentivised in the company to look into the direction of our strategy. Best behaviours are rewarded. Worst behaviours are corrected. We automated most of our processes and our people are not under stress. Last year cut back our workweek to 4 days and we work on a few nonprofit causes together as a team on Fridays. This is the feel-good part of our business.
- Amazing. What kind of causes do you support?
- We are a B-corp certified company so we respect the diversity, communities, healthy lifestyle, environment and society we live in. So we support local charities in these areas where we can contribute directly with 1% of our revenue and 20% of our time. Our time actually creates a huge impact as we can teach these nonprofits the way we run our business. We call it Freedom Autopilot. Because as soon as we can put the boring part of our business on autopilot, it can free us up to do the fun stuff!
- So what are your plans with this automated business? Do you sell it?
- Are you crazy? The best part is that I can keep it as a cash flow machine and equity, but I have time to build new ones. Actually, I am planning to travel to Mt Everest to do the 3 weeks loop on 5,400m and travel for a year to help local businesses and nonprofits around the world.
- Great plan! David, thanks for your time and your story.
- My pleasure, Laszlo.
About the Author
Laszlo Csite is a business/agile coach who helps gifted and keen leaders and teams to be extraordinary and fulfil their potential. He is also a digital/CRM product owner, who helps great ideas to grow into admired digital/physical products and brands.
If you enter a new field, want to grow, acquire, split, transform or want to exit - using proven methods can save you time and frustration.
When you are interested, I can show you how to put your business on AUTOPILOT, so you can enjoy the fun stuff. I will share my 25 years of consulting experience and my carefully selected network of professionals.
If you find these articles interesting, invite me for a coffee and ask any questions. lacix.co