Discipline leads results with eight key metrics to drive revenue.
Steve Whittington, Executive Vice President of the Flaman Group, is back for a second time! After getting plucked off the face of a mountain by a helicopter Steve gave up mountain climbing and decided to channel is passion into his work. We get the inside scoop on Whittington’s new book, Thriving in the Customer Age. The book lays out the framework with eight key metrics that can be applied and used to measure the customer experience initiative results, tied directly to the bottom line.
Whittington has over 25 years of experience in the (B2C) business to consumer, (B2B) business to business and (B2A) business to any space. From consulting, marketing agency work and as an executive and board member for manufacturing and retail firms. He is also Managing Director of a boutique digital agency, Graphic Intuitions. Steve’s current board work includes serving as Chair of the Board for Flaman Fitness Canada, a national retailer; President of the Glenora Child Care Society; and a member of the Marketing Program Advisory Committee for NAIT’s JR Shaw School of Business.
Outside his professional life, Steve is a leader in the mountains. An avid mountaineer, he has reached the summit of 50 mountains, including Mount Everest in 2013. On many of his climbs, he has been the expedition leader and/or lead climber. Steve believes his leadership in the mountains has a direct application to his successful leadership in his business life.
George: Welcome to the Conquer Local Podcast. Conquerors, we’ve got a treat for you. We have very few dual episode guests, but we’re bringing back Steve Whittington. If you remember Steve’s podcast from a little over a year ago, he was telling us about the challenge of climbing Mount Everest… This gentleman has summited 50 different mountains. It’s the thing that drives him. It’s his passion, and he talked about another passion that he had after… He learnt more in six months of doing parental leave than he had learnt in his entire time being a businessperson. There’s all sorts of nuggets in that first episode with Steve Whittington. Now, Steve phoned me the other day, and I’ve been getting advanced copies of a book that he’s been working on for the last while called Thriving in the Customer Age. And I love his insights around the customer-centric mindset that we need to have as business owners.
George: Steve is the chairman of Flaman Fitness, and Flaman is a Canadian brand, and it is a brand that is very well thought of. The Flaman family has been running that business for a number of years, over 1,000 employees, 110 locations. They run a very, very good business. And Steve is at the very pinnacle working with the executive teams, helping them to guide them into this new life of the business around being customer-centric, and he’s brought a number of learnings and a number of tactics into the organizations and strategies that he has deployed.
George: So he phones me the other day, and he says, “Listen, I’m going to send you an advanced copy of my book, and I’d love for you to have a look at it. And I do have to tell you that I almost left this earth,” and then went on to tell me this crazy story about how he pretty much has had to quit extreme mountain climbing because of one event that happened. We’re going to get him on the podcast in a moment. He’s going to tell us all about why his wife’s so bloody mad at him and what he learnt from almost not making it. And then we’re going to get into all of the great things that he’s bringing us inside this Thriving in the Customer Age, the new book from Steve Whittington, coming up next on the Conquer Local Podcast.
George: Steve Whittington on the podcast, we almost lost you here recently, and it’s a hell of a compelling story. Do you want to tell the listeners about one of the challenges that you faced here recently? And then we’ll get into why we have you on the podcast this time.
Steve: Absolutely. So when you chase high standards or high peaks as I’ve done in my life, what you do is you look for more challenging problems. And what I found in my climbing pastime, I was looking for more interesting, more difficult routes, and they were getting more dangerous, and more committing would be the term. And so all this sort of came into coming up with a wild and crazy idea of, “Okay, well, I’m going to do a 33-hour push straight to get to this Alpine summit. So I’m going to leave my vehicle at midnight, and then I’m going to hike in for four to six hours, cross a glacier, climb a 6,000-foot Alpine face, summit, and then get back down to my truck the next day after moving for about 37 hours.” That honest to God was the plan.
Steve: And it all went fine until the weather got too nice if you could believe that. The weather got too nice. So we were about 500 feet from the summit and trying to find our way to find a weakness in the route, and avalanches started going off. And the way we climbed, we weren’t directly above each other. We were spread apart so that if someone triggered an avalanche, it would hopefully miss the other fellow below, and that got us quite nervous. And then natural avalanches started to occur, and then an avalanche ripped above us, and my partner’s like, “What do we do?” And I’m like, “We can’t go down. We got to climb out of this.” And so up we went.
Steve: And because the weather had gotten so hot, when we got to the summit, we were literally about 12 feet from the summit, and we were blocked by these cornices, overhanging snow about the size of a bus. And if the weather was where it was supposed to be, it was supposed to be minus two at the summit based on the weather forecast we had looked at literally 11:30 PM the night before, and now, we’re at 11:00 AM the next day. So we’ve been moving for over 12 hours. And they were dripping and falling apart, so we couldn’t even touch them without them falling on us and crushing us. So we couldn’t go down. We couldn’t go up. And we had to try to find a way around.
Steve: So at that point in time, I unroped and free climbed over an 80-degree face for about 500 feet trying to find a weakness and came back, and we just had to make the call that we’re not going to get up this, and we can’t get down. So we down climbed on some rock to try to avoid some avalanche danger and slammed a piton into the rock and clipped in. And I pulled out my sat inReach device, and I hit SOS, which then put off a whole series of events, with me texting the search and rescue and my wife being notified once again that I’m in trouble in the mountains and a helicopter with a long line coming and plucking us off the face.
Steve: And you’re really, you sit there, and you’re contemplating that edge, that risk that you’re going to, that where you’re pushing, and you ask questions, “Why? Why do you push yourself so hard?” It’s to create an experience that matters. And right there and then I’m like, “Okay, I’m going to be done with extreme Alpine climbing, and I’m going to focus all this energy into creating experiences that matter back in the real world.” And so that’s where I am. I came off the mountain charged up full of life because I had been given a second chance to make experiences that matter back in the real world.
George: That’s an absolutely amazing story, and I can only imagine what was going through your wife’s mind. And you have a young family too.
Steve: I do. And there’s a lot of folks that rightfully say that the extreme climbing that I’ve done later in my life because I’m getting closer to 50 than I am 40, is very, very selfish. And they’re not wrong. I looked at the extreme Alpine climbing that I’ve been doing, and I’ve had a good career. I’ve summited 50 different mountains, and I’ll just pull on easy rock and easy ice to give me my-
George: Just a small hill from here on in. You said in the last podcast that you went on parental leave and it taught you more in six months than you’d learned in years, and I understand you’re about to do that again.
Steve: You bet. Yeah. The first time I went on parental leave, I learned what real equality in our society looks like. And what I’ve learned in the gap between, I’ll be going on parental leave again in December, is how quickly you can revert back to your defaults or society norms. Despite my enlightenment, I have found myself slipping. So I want to go on parental leave again to reconnect with what I feel is my responsibility and my desire to be an equal parent and raising my children equal with my wife. I fully admit shamefully that I slipped back into some of the defaults of the male and female traditional roles, and so that’s one of the main motivators for me going on parental leave again.
George: Yeah, I admire that you’re doing that, and I’m envious because I didn’t get to do that 30 years ago, but I will tell you that my oldest is having a baby any day now. I don’t think I’m mature enough to be a grandfather, but I’m going to have to figure that out pretty quick.
Remember the Most Important Thing as Businesses: Take Care of the Customer
George: So the reason that we’re here, and thank you for that very compelling intro, and I wanted to get that story out because Steve is not an ordinary individual. He does extraordinary things, and I’ve always admired that about you. And I want to talk about the extraordinary thing that you’ve done recently, which is you’ve completed your book that you’ve been talking to me about for quite some time. I had the privilege of seeing an advanced copy. It’s called Thriving in the Customer Age. Let’s talk about what led you to create this piece of content.
Steve: In business and in a lot of things in life, everything happens really, really slowly, and then all at once, things occur. So if you look at businesses that are going under, recently we just watched the retail brand Forever 21 going under, and people might be saying, “Oh, my gosh. That company just went under, and that seems like it’s a sudden shock.” The reality being is that they’ve been probably slowly dying for a long, long time. It’s been slowly then all at once.
Steve: And what I witnessed going on in our business culture, ‘cause I serve on lots of boards, and I’m part of different peer groups and talk with other business owners, and I have an agency on the side that has clients and stuff like that. And I see this across the board no matter the associations I’m part of in the States. Talking to other business owners there, it’s not just a Western Canada or Canada or North America thing. We have forgotten our most important thing as businesses, and that’s how to truly take care of the customer. And in this age of the customer, it’s been amplified by some of the internet darlings that have raised the bar.
Steve: And so if you’re a local business, your competitor used to be the local business down the street. We all heard this story, but now, your competitor, it is the local business down the street, but the bar on how you’re supposed to treat your customers is whatever is world-class. Your customers are expecting you to treat them like Amazon. And so how do you arm and equip all these local, small, medium enterprises, all the meat of our economy that… I’ve always lived in the small and medium enterprise space my entire career. And that makes up the meat of our economy, where 90% of private employees in Canada work. So I don’t want to forget about that 90%. I want to help them thrive.
Steve: So over the years, I was watching all this happening slowly. Then all at once, I’m like, “I really need to pivot my career and become an advocate for helping companies make experiences that matter, to help them thrive in this age of the customer.” Here’s an interesting stat. Did you know that 80% of customers believe they deliver superior customer service, and in fact, only 8% of their customers agree? That’s a massive disconnect. Massive. So how do we bridge that gap? How do we actually help companies rise to meet the expectation of the customer? And that’s what this book is all about. That was my why.
Measure the Metrics That Matter
George: You and I have had long conversations about this over the years, and when we started the podcast, this was one of the things that we were identifying. I look at the local seller in the market, that they are a small business themselves. And if they run their business properly and they treat it like it’s their own thing, they’re going to be successful. But the whole premise of the podcast is to raise the bar on what’s acceptable standing across the desk. And I’m glad that you’re bringing this topic up, and you really dig into some stats that actually should just stagger business owners. Now you look at it, it could look very daunting, but where there is a challenge, there’s an enormous opportunity if you just adopt a new mindset.
Steve: You bet. You bet. That’s the key is to really truly become customer-centric and measure the metrics that matter. The challenge is that it’s a challenge to have a paradigm shift where you’re like, “Well, what do we measure?” Well, everybody measures top-line revenue and the bottom line. They might measure margin and really dive into the margin by customer segment and all that kind of stuff. But do they measure different things about the various touchpoints in the customer experience? Do they measure how the customer feels during certain parts of the sale process or after-sale process? Or do they measure their actual customer churn? Or is it all about, what’s our revenue this month? What’s our revenue going to be next month? Or how many returning customers do we have this month? What is our subscription rate? What is our absorption rate of our business? So certain things like that that are all derived from how you’re treating the customers are new. I think basically, it’s the measure the metrics that matter.
George: We are in the middle of season three of the Conquer Local Podcast, and one of our guests, Mark Roberge, speaks a lot about the fact that if you want to figure out what’s wrong with your sales organization, start with customer success. Talk about what the customers you brought across the line are saying about the way that things are being delivered. And when you bring that up, it really hit home for me a lot of our business owners, all they care about is top line and bottom line, and those are lagging indicators. You’re just going to look at it, and you’re going to go, “Oh, yay,” or, “Oh, shit.” The things you really need to be looking at are the leading indicators that power those two metrics, and there’s way more metrics. And that’s one of the things. So I’m glad that you’re calling out that we need to be concerned about the metrics, but they all tie back to the customer is what you’re saying if I hear you correctly.
Steve: Yeah, you bet. I mean, when you look at broadly, when I look at any customer journey, there’s really four big stages, right? You have the awareness, consideration stage in which the customer is becoming aware of your organization, or they’re considering buying from your organization again because they already are aware of you. And then you get into the actual sale process. Then you have the after-sale process, and then you have retention and referral. What’s really interesting is when you look at people where they do their budgeting and they do their training requirements and all that stuff, they tend to focus on the first two stages, how do we acquire the people, and how do we close them? They don’t focus on, how do we actually delight them, and then how do we keep them?
Steve: And when you think about that, what if your training focused on those other segments, and what if your acquisition or your awareness phase was about not acquiring people from a transactional point of view but from a relationship point of view, you go in with a mindset that you’re going to make a customer for life? Your advertising will change. You’ll change the whole way you shoot it off.
Steve: And that’s what I’m getting at is that we’re showing up… Why are your ads not converting? Well, because you’re actually showing up in a way that doesn’t connect with a customer because you haven’t thought about your customer. You haven’t really tried to build a relationship with your customer. You haven’t found the metrics that matter to measure how you increase your customer experience. And really, you’ve got these four stages. And any business that looks at it, it’s like you smack yourself in the forehead where you’re like, “Yeah, I’ve been focusing on the first two stages, and I don’t worry about the other two stages too much.”
George: And that’s just where we came from. We came from all we had to worry about was getting top of funnel, getting somebody interested in our product, working like hell to close them, and then we’ll go find another one. And we weren’t really worried about the repeat. There were some businesses that did get it. So do you have anybody you like right now that’s really nailed down and focused on this customer-centric experience that you’re referring to?
Steve: Well, as chairman of the board of Flaman Fitness, that is one thing that we’re really heavily focusing on, our customer churn, and so we measure that. But we also measure the customer experience through a Net Promoter Score. And every review that we get, negative or positive, of course, we try to answer, but every negative review goes to a member of senior management so that it’s brought to our attention so we make sure that we address that customer concern.
Steve: So what we’re doing is we’re measuring those after-sale metrics in order to improve upon it, right? So our Net Promoter Score at Flaman Fitness, for instance, has gone up double digits since we’ve been focusing on it. So you have a 40, and it’s gone up to a 67, or it’s gone from a 50 to a 77 in some cases. And that’s by segmenting it and measuring it and getting people to focus on it and changing the culture and the mindset about how do we treat this customer afterwards because they know that we’re going to actually be polling that customer and asking them how their experience was. And then building out journeys with that customer, so they have a reason to reconnect with our brand instead of it just being transactional, come in and buy X and see you later. We want to change our purpose.
Steve: And that’s the big thing, George, is organizations really need to change their purpose. So if you look at some of the companies that are… guides that get it right, I’ve mentioned Amazon, but you can take Walt Disney for instance. They really are focused on creating experiences as opposed to a transactional relationship. And when that switch happens, and that can happen to any retail where you focus on making an experience, that’s when you’re going to retain your customers. That’s when they’re going to come back. That’s when they’re going to tell people about you, “Hey, I had this really great experience. They helped with X, Y, Z. They’re treating me afterwards. They’re connecting with me, making sure that everything’s going right. They’re following up to make sure that I’m on my path to reach whatever my journey might be. They care about me.” That’s when you don’t need to advertise as much.
Challenge the Status Quo for a More Customer-Centric Approach
George: You were telling me a story, as we did the preparation for the podcast, that you recently were in the audience with I would call one of the most famous and most successful businesspeople in Canada, Mr. Jimmy Pattison, who also is a Saskatchewan resident. He was born in Landis, Saskatchewan if I remember the history correctly, and moved to Vancouver, got in the auto business, and then built an empire. He’s a billionaire, and you’re in the audience, and you challenged Mr. Jimmy Pattison that his company needed to become more customer-centric. How did that go?
Steve: Well, he asked to speak with me afterwards privately instead of in front of the crowd, so I give him credit for that. He’s a sharp fellow. And I said, “Listen, I’m engaged with a number of your businesses. They try selling to us, but all they’re doing is they’re pushing a product onto us as opposed to actually looking holistically at what we need and creating a solution.” And what my challenge to him was you’ve got all these various different organizations that could unite and have a 360 view of the customer and do strategic account management and provide a solution that’s customized on a per-account basis as opposed to each various branch of his empire just trying to push the product down to that customer. And he felt that there’s something there. And so I’m friends with a senior vice president, and I think they’re working on it. I think they got it. Because the old way of business just doesn’t work.
George: I admire that you called it out. And I think that some of this has been happening as the consolidation of industries come together. But I think that when we first look at a consolidation, the bean counters get involved and say, “Here’s where we’re going to save a bunch of money,” rather than saying, “Here’s how we’re going to consolidate and serve the customer better.” It’s really two different tracks, isn’t it?
Steve: Yeah, well, absolutely. Absolutely. And some of the merger and acquisition talks that I’ve been involved with, with some of the organizations I’m involved with, I can’t disclose anything, but what I’m encouraged by is they are taking that customer-first view. They’re like, “Oh, okay, so if we merge or acquire this company, what that’ll be is a whole bunch of additional services that all our customers will get.” And so they’re thinking along those lines first. That’s the synergy that they’re talking about, which is opposed to cost savings to be able to reduce this overhead, this and that. And it’s been more about what additional services that can be wrapped around the customer to provide a better experience for said customer and keep longevity of the relationship. So there are organizations that are getting it obviously, and they’re the ones that are going to win.
Eight Key Metrics for the Customer Journey
George: So Steve, in the book Thriving in the Customer Age, you can get it on Amazon, and it’s in some bookstores as well. I noticed that you’ve posted about that. But you talk about eight key metrics. Can we just touch on those quickly so that listeners understand what they’re going to get when they buy the book and read through the content? So the eight key metrics can be applied and used to measure your customer experience initiative.
Steve: Yeah, so a lot of people look at a customer journey as it’s a line. It has a start. It has a finish. And I propose it should be a wheel where it keeps going around and around and around, so you have an ongoing relationship with a customer. And so at the beginning when you take the first stage, awareness and consideration, your first metric that you want to do is, what is your total reach? What is the amount of eyeballs that are being reached by your brand? Your brand could be an individual salesperson. It could be a small store. It could be a large multi-chain of retail locations. So you want to know what your total reach is.
Steve: And so when you get that number, once you have that, the next thing you want to understand with clarity is what your conversion rate is. And you can get granular on that by varied different channels or efforts, whatever, but you really want to understand what your conversion rate is. So how many of these people that were exposed to your brand actually converted into a lead?
Steve: Now, this is where it gets really interesting because that’s your third metric, which is your lead, is what’s the definition of a lead? Now, some people will say, “Well, a lead is when I have a phone number, and I have the name or ability to contact the person. They show purchase intent.” I would say that in most organizations, people don’t show up at an organization or call an organization because it’s something fun to do. You don’t just walk through the doors because oh, you want to hang out at retail shop X. You’re there for a purpose, and it’s the organization’s job to actually capture that lead. Now, measuring the amount of total opportunities that come across to either a sales floor or in a B2B space, all that stuff, is really important, and it’s capturing leads. But what you can find is when you measure the leads is there’s going to be the total leads that were available versus the leads that were captured.
Steve: After you move the lead, so that’s metric number three, you get to metric number four, which is your close rate. So you got 100 leads and you only close 10 of them, you got a close rate of 10%, and that’s really, really important to understand that. If you have different salespeople or you have different locations, you, of course, want to segment that so you can understand where your close rate goes up or down even by product line.
Steve: So if you can see that those four metrics are all awareness, consideration, the sales process, now what happens, we talked about top-line revenue. People don’t segment the revenue enough. Revenue is the next metric. What I would propose is to start real simple and segment your revenue between existing customers and new customers. Understand underneath that revenue what your average transaction size is, what your margin is, and your number of transactions within those groups. So for instance, you could understand that new customers come in, and they have a higher margin, and they have a higher average transaction size than existing customers. That’s important to note. So start by segmenting your revenue. And if you get that clarity of understanding, you can see the value of your existing customers versus new customers and vice versa.
Steve: So now you’ve dealt with the first two segments of the customer journey, you get into the after-sale, and you get into the retention and referral. And really, you’ve got your reputation metrics. Those are your Google reviews, Yelp, all that stuff. You have to aggregate that and measure that and understand what’s going on. The next thing is is a classic customer satisfaction type score, Net Promoter Score. And you can pick any customer satisfaction score you want. Pick one. You got to have something that goes out to your customers after every purchase so you can understand what’s going on.
Steve: And last but not least, you really want to know what your churn rate is, how many customers are coming back in a set time period. And until you know all this stuff and you can measure it, and you have to set goals. People sometimes, this is the… The software that’s coming out, we have all kinds of business intelligence, but most of it isn’t anchored to goals and what you’re measuring against. So take these metrics, map where you’re at, your current as-is state, and then set goals and learn how to improve. And it’s really that simple, but it takes effort. It takes understanding. It takes the ability to figure out how to measure those various different metrics, and it takes discipline. And that’s what really creates a great experience is discipline action equals results.
George: I love the way that that is laid out. It’s very simple to follow. You did it in about four minutes. And by identifying these eight stages and then bringing out the one piece everybody needs to understand, it takes an enormous amount of discipline to bring this thing forward.
Steve: Yep. Most the businesses I’m involved in look at a lot of these stats on a weekly basis.
George: Well, we really appreciate the insights, and there are even more insights in the book, Thriving in the Customer Age. And Steve, I noticed that you’ve been doing quite a bit of public speaking. If people were interested in having you come and do a keynote speech at maybe one of their conventions or one of their events, is that something that’s on the table?
Steve: Absolutely. Yeah. My personal website, stevewhittington.com, all the information is there. Sign up for my newsletter, CX Edge, which I’m publishing my thoughts on a monthly basis, and so you’ll get some insights into what’s going on in the world of customer experience. I really think that customer experience is the new battleground for brands. You have a hard time competing on products and price, but you can make a remarkable experience and create a branded experience that nobody can duplicate.
George: Really appreciate having you on the podcast once again. One of our very few dual episode guests right here, so thanks for joining us today.
Steve: All right. Thank you, George.
George: Steve Whittington, good friend, and I’ve always learnt something when I listen to that gentleman and his insights into running a business. And I’m talking a big business. Flaman is an admired company. You talk to anybody, they’ll go, “Oh, Flaman Man, they built Flaman superhero character that would get on a treadmill and they mounted it on the top of all their fitness buildings and you’d drive by and there’d be Flaman Man. And when it was Halloween, they put him in a pumpkin costume, and then they sometimes put him in a Superman costume. And it was just a thing that they did to build the brand. And they’ve taken that steps further.
George: It’s really interesting to hear a guy like Steve, who’s chairman of Flaman Fitness, the Executive Vice President of the board for the parent company, and he’s talking about how they had to change the business. I’m sitting back going, “This is Flaman. They got big buildings, and they sell lots of stuff, and they’ve been just this juggernaut in the space of shortline ag equipment and then in fitness in Western Canada. Just an unbelievable brand. And here he’s saying, “Not going to be good enough. We need to really rethink this thing. We need to think about the full customer journey.”
George: And when you get somebody with that brainpower that has been involved in the business, been super successful, super driven, super disciplined saying he’s basically in his book he is ringing an alarm saying that if we don’t start thinking about our businesses differently, we’re going to have a very big problem. Then he stands up at an event and challenges one of the most successful businesspeople in Canada. I like him. I like his approach. He calls it the way he sees it, and you’re going to love his book, Thriving in the Customer Age. Steve Whittington, our guest this week in season three of the Conquer Local Podcast.
George: Thanks to Judy who reached out to us last week on LinkedIn. She said, “Something’s happened. You’ve raised the bar this year. Just love the guests. I love the content.” It’s all producer Colleen. She’s really challenging us. I appreciate the work that she does. It’s another edition of the Conquer Local Podcast. My name is George Leith. I’ll see you when I see you.