WEBVTT 1 00:00:00.000 --> 00:00:06.000 We realized that obviously it was over and then we ended up having to cut 20 people, which was horrible. 2 00:00:06.000 --> 00:00:08.800 Welcome to the game where we talk about how to get more customers, how to make more 3 00:00:08.800 --> 00:00:12.000 per customer, and how to keep them longer in the many failures and lessons we have learned 4 00:00:12.000 --> 00:00:15.000 along the way. I hope you enjoy and subscribe. 5 00:00:15.000 --> 00:00:21.000 The next video in my million dollar mistake series, because I have made so many mistakes in my life, 6 00:00:21.000 --> 00:00:29.000 comes from a different period in our business career when we were launching our 7 00:00:29.000 --> 00:00:34.000 supplement company. And so this is two years or two and a half years in. 8 00:00:34.000 --> 00:00:38.000 And so at this point we had just in 20 million there before, so we were launching our 9 00:00:38.000 --> 00:00:41.000 supplement company. And we expected to do, you know, a decent amount of money. 10 00:00:41.000 --> 00:00:47.000 In the first month we did 1.7 million, next month we did 1.5, next month we did 1.6 I think, 11 00:00:47.000 --> 00:00:52.000 next month. And so it was just to give you perspective in terms of the business size. 12 00:00:53.000 --> 00:00:59.000 And so we took one of our heads who had worked up from the bottom. 13 00:00:59.000 --> 00:01:04.000 She was a front line customer service rep who had been a front line customer service 14 00:01:04.000 --> 00:01:08.000 about a different big company. So again, you know, we hired four experience at that 15 00:01:08.000 --> 00:01:10.000 point. They had experienced many customer service. So customer service, 16 00:01:10.000 --> 00:01:13.000 you could be a customer service manager and then she became director of customer service. 17 00:01:13.000 --> 00:01:17.000 So she was, you know, great cultural fit, great, great vibe, you know, really good, you know, 18 00:01:17.000 --> 00:01:21.000 a nice person. And so we were starting this physical product line, which is 19 00:01:21.000 --> 00:01:26.000 Prestige Labs. And so we obviously had the high value service, you know, consulting company 20 00:01:26.000 --> 00:01:30.000 with Jim launch. And so we were like, well, man, we did such a good job with that. 21 00:01:30.000 --> 00:01:34.000 Do you think you can handle the physical product size? You said sure, it's going to be awesome, 22 00:01:34.000 --> 00:01:37.000 no worries. And so she was like, we're going to do the same thing we do with Jim launch, 23 00:01:37.000 --> 00:01:41.000 totally over deliver, have, you know, white glove service, it's going to be amazing, right? 24 00:01:41.000 --> 00:01:46.000 So it sounds great. And so what we did was an anticipation of the volume that was going to 25 00:01:46.000 --> 00:01:53.000 happen. We hired 25 customer service reps. And, and we actually had done it a little 26 00:01:53.000 --> 00:01:56.000 bit of a beta launch before that. So I think we did like 600,000 in like December, 27 00:01:56.000 --> 00:02:02.000 just to like get things going. But it was like, oh man, we're like, these people are super 28 00:02:02.000 --> 00:02:07.000 overworked. Like we really need, you know, five times that amount. And there's a bunch 29 00:02:07.000 --> 00:02:11.000 of lessons that I learned from this. And so I'll give you the, the long story short. 30 00:02:11.000 --> 00:02:15.000 Right now, the company does about the same amount of money and we have four full-time people 31 00:02:15.000 --> 00:02:20.000 there. And she had 25. So the thing about that, the same amount of work that currently 32 00:02:20.000 --> 00:02:24.000 is done by four people is being done by 25. And by being done, I mean, not doing 33 00:02:24.000 --> 00:02:28.000 anything. And the thing is, especially in a remote setting, you don't, like, you 34 00:02:28.000 --> 00:02:32.000 have to trust people to a certain degree, right? And we didn't have transparency 35 00:02:32.000 --> 00:02:35.000 into the amount of work that people were doing. We just took their word for it. And they just kept 36 00:02:35.000 --> 00:02:38.000 saying, like, we're overworked, we're overworked, we're overworked. And reality is that 37 00:02:38.000 --> 00:02:42.000 like they weren't doing anything, like truly like theft. Like they were doing nothing. 38 00:02:42.000 --> 00:02:49.000 And, you know, that's really hard for you as a human being. But let me just show you the lessons 39 00:02:49.000 --> 00:02:54.000 that I learned from that. The first one was this, you know, individual had never 40 00:02:54.000 --> 00:02:58.000 grown, had never built a department, right? So they were, they had, they had no experience 41 00:02:58.000 --> 00:03:02.000 doing it. Number one, number two, the experience that they had in our service 42 00:03:02.000 --> 00:03:06.000 business was not relevant to a physical products B2C company. So we were a B2B 43 00:03:06.000 --> 00:03:10.000 service. And then we had a B2C product line. Those are two very different companies. 44 00:03:10.000 --> 00:03:13.000 You know, one is, you know, people are saying you thousands dollars a month so that you can 45 00:03:13.000 --> 00:03:18.000 make them hundreds of thousands dollars a year. And that's going to require a different 46 00:03:18.000 --> 00:03:23.000 level of service than somebody who's paying, you know, $40 for a supplement, right? 47 00:03:23.000 --> 00:03:26.000 Like you can't deliver the same level of service. Like it just doesn't make sense. 48 00:03:26.000 --> 00:03:31.000 And so, but, you know, we like to delegate authority, like to delegate decision 49 00:03:31.000 --> 00:03:35.000 making so that we can trust people to make good calls. That was a bad one. And it was 50 00:03:35.000 --> 00:03:38.000 because of me. It was my fault. I should have recognized that. But I didn't. 51 00:03:38.000 --> 00:03:44.000 And so, anyways, built this huge department. And then we then started real, 52 00:03:44.000 --> 00:03:47.000 we were like, I don't, I don't like, we're looking at the ticket volume. 53 00:03:47.000 --> 00:03:50.000 I'm like, can't take that long to do these tickets. Like there's only six main things 54 00:03:50.000 --> 00:03:52.000 that have to happen, right? 55 00:03:54.000 --> 00:03:58.000 Real quick, guys, you guys already know that I don't run any ads on this. And I don't 56 00:03:58.000 --> 00:04:01.000 sell anything. And so the only ask that I can ever have are you guys that you help me 57 00:04:01.000 --> 00:04:05.000 spread the word so we can have more entrepreneurs, make more money, feed their families, 58 00:04:05.000 --> 00:04:09.000 make better products, and have better experiences for their employees and customers. 59 00:04:09.000 --> 00:04:13.000 And the only way we do that is if you can rate and review and share this podcast. 60 00:04:13.000 --> 00:04:16.000 So the single thing that I have to do is you can just leave a review, 61 00:04:16.000 --> 00:04:20.000 but take 10 seconds or one type of the thumb. It means the absolute will to me. And more importantly, 62 00:04:20.000 --> 00:04:22.000 it may change the world. 63 00:04:25.000 --> 00:04:27.000 This we started peeling back and peeling back. And then, you know, finally, 64 00:04:27.000 --> 00:04:30.000 one person comes forward and is like, hey, like I'm really doing nothing like all day. 65 00:04:30.000 --> 00:04:35.000 Like, is my job safe? You know, I was like, huh, peel back a little more like, hey, 66 00:04:35.000 --> 00:04:41.000 like I responded like one email a day and I'm getting paid full time. And I was like, huh, interesting. 67 00:04:41.000 --> 00:04:47.000 And so we realized that obviously it was over and then we ended up having to cut 20 people, 68 00:04:47.000 --> 00:04:52.000 which was horrible. It's horrible. I mean, our glass door got slammed as a result of that. 69 00:04:52.000 --> 00:04:57.000 You know, you ruined my life and I'm like, weren't working. You know, and it's hard. 70 00:04:57.000 --> 00:05:02.000 And it was my fault. You know, it was 100% my fault. And so we got a new director in there 71 00:05:02.000 --> 00:05:07.000 who had experience and what she did to fix the department was she went in and did time studies. 72 00:05:07.000 --> 00:05:10.000 So she asked people to just tell me what you're doing with your time. 73 00:05:10.000 --> 00:05:14.000 And you can usually see very transparently when people are like, be asking. 74 00:05:14.000 --> 00:05:18.000 And so she was the one who realized where all the inefficiency was. 75 00:05:18.000 --> 00:05:23.000 She downsize the team to the best people. And then she created utilization tracking. 76 00:05:23.000 --> 00:05:28.000 And so we can now, in real time, always see what percentage of utilization of our force there is. 77 00:05:28.000 --> 00:05:32.000 And so the way that that worked was she looked at how much time it took to do each task. 78 00:05:32.000 --> 00:05:37.000 So how much time does it take to respond to an email on average? How much time does it respond to a support ticket on average? 79 00:05:37.000 --> 00:05:41.000 How much time does it take to change a credit card or change a flavor or change a address or cancel subscription or change a subscription? 80 00:05:41.000 --> 00:05:44.000 Whatever, right? Look to all those tasks. 81 00:05:44.000 --> 00:05:47.000 And then seeing how many of those things were coming in per day, 82 00:05:47.000 --> 00:05:52.000 she could make a time estimate of what a reasonable person would be doing, right, with their time. 83 00:05:52.000 --> 00:05:58.000 And then once we had that, we could see what the inflow of activity was supposed or inflow of actions that needed to happen. 84 00:05:58.000 --> 00:06:00.000 We could allocate the amount of time that it was supposed to happen. 85 00:06:00.000 --> 00:06:03.000 And we knew the amount of a lot of time we were paying for in terms of labor. 86 00:06:03.000 --> 00:06:07.000 And so with that, like every week, I get a report says we're at 72% utilization. We're at 88% at utilization. 87 00:06:07.000 --> 00:06:10.000 We get over 90. We're like, okay, we're getting close to we need another person. 88 00:06:10.000 --> 00:06:15.000 We usually try and stay in the high 80s because then you're not burning people out, but it's just well utilized. 89 00:06:15.000 --> 00:06:19.000 And so the lesson that I had from that, there were many, right? 90 00:06:19.000 --> 00:06:23.000 One is make sure that the experience that A, make sure someone's experienced, 91 00:06:23.000 --> 00:06:26.000 B, make sure that they're experiencing the exact same industry. 92 00:06:26.000 --> 00:06:30.000 C, sometimes you have to investigate and not take people's work. 93 00:06:30.000 --> 00:06:33.000 And it sucks, but it's part of business and that's called QA. It's quality assurance. 94 00:06:33.000 --> 00:06:37.000 It's making sure that the data you're getting is validated, right? 95 00:06:37.000 --> 00:06:40.000 You know, we a lot of people unfortunately who weren't, I was honest. 96 00:06:40.000 --> 00:06:42.000 And again, that's our fault. Everything's your fault as an entrepreneur. 97 00:06:42.000 --> 00:06:45.000 It's a my fault. You know, we should have looked closer. 98 00:06:45.000 --> 00:06:48.000 We had a lot of people who didn't say anything, who just literally clocked in. 99 00:06:48.000 --> 00:06:54.000 And just tried just not not not roughly any feathers and just get paid. 100 00:06:54.000 --> 00:06:57.000 And so that was, you know, horrible. It was terrible. 101 00:06:57.000 --> 00:07:00.000 And it was horrible to get our last or slam with that. 102 00:07:00.000 --> 00:07:02.000 And just it just felt like a failure. You know what I mean? 103 00:07:02.000 --> 00:07:06.000 But you learn these things. And so we let, you know, we had to let those people go. 104 00:07:06.000 --> 00:07:09.000 And we put somebody who was really metrics driven in place. 105 00:07:09.000 --> 00:07:12.000 And then you quantify all the tasks. The thing is once you quantify everything, 106 00:07:12.000 --> 00:07:16.000 there's no, there's no, there's no, there's no fluff, right? 107 00:07:16.000 --> 00:07:19.000 It's just transparent. How many activities are coming in? 108 00:07:19.000 --> 00:07:23.000 How much time does it take to do activities? How many hours do we have in terms of labor 109 00:07:23.000 --> 00:07:26.000 that's available to us to complete these tasks? That's it, right? 110 00:07:26.000 --> 00:07:30.000 And it just makes everything transparent. Everyone feels they don't feel like they're at risk. 111 00:07:30.000 --> 00:07:34.000 Because on some level, teammates can know if they're like jobs at risk, right? 112 00:07:34.000 --> 00:07:37.000 Like if they're not doing anything, they get stressed, right? 113 00:07:37.000 --> 00:07:41.000 And so like if you want to keep the culture good and you also don't want to have a culture 114 00:07:41.000 --> 00:07:44.000 of people who don't do anything, right? Because that's horrible. 115 00:07:44.000 --> 00:07:46.000 It's the biggest cancer you can possibly have in your company. 116 00:07:46.000 --> 00:07:49.000 If you put those, put those layers in place, you put the tracking in place, 117 00:07:49.000 --> 00:07:53.000 and you hire somebody who already has the experience to have built a team, 118 00:07:53.000 --> 00:07:57.000 not just been on one, but built a team for the specific type of business that you're in. 119 00:07:57.000 --> 00:08:03.000 You will be so much further ahead. And hopefully you avoid another million dollar mistake 120 00:08:03.000 --> 00:08:08.000 that I have made in my life. So hopefully that's why before you, hopefully you can avoid that landmine. 121 00:08:08.000 --> 00:08:12.000 And otherwise, have an amazing, amazing day. And keeping awesome. 122 00:08:12.000 --> 00:08:15.000 And I'll tell you the next terrible mistake I made in my life. 123 00:08:15.000 --> 00:08:17.000 See you in the next video.