The 7 Stages of the Perfect Customer Lifecycle – An Interview with Charlie McDermott

Charlie McDermott
The 7 Stages of the Perfect Customer Lifecycle – An Interview with Charlie McDermott


Charlie McDermott is the founder of the Business & Entrepreneur Network (BEN), helping small business owners put automated systems in place so that their businesses don’t rule them, they rule their business

In this interview Charlie reveals the 7 stages of the perfect customer lifecycle so that we can build a huge legion of satisfied customers who refer us to their friends

You can listen to the video below or read the transcript directly underneath…

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Joey Bushnell: Hey everyone, this is Joey Bushnell, today I have with me a special guest Charlie Mcdermott. Charlie, thank you very much for being with me today.

Charlie McDermott: Absolutely, thank you for the invite.

Joey Bushnell: Let me tell you a little bit about Charlie and what he has done in the marketing world…

Speaker, author, and founder of the Business & Entrepreneur Network, Charlie McDermott helps small business owners clear the path to building valuable, scalable and… saleable businesses via automation and the creation of direct response marketing assets.

Charlie started his first business as a college student at West Chester University located in Pennsylvania, and grew it into an 8-figure health club empire. Twenty-two years later he sold that business to focus his marketing expertise on Hollywood where he used over twenty different forms of media to breakthrough the clutter and land his son acting roles in feature films and television shows including, The Office, Private Practice, Medium, and a full-time gig as Axl Heck on the hit ABC comedy, “The Middle”.

Today, Charlie works with hundreds of entrepreneurs every month online from as far away as Australia and via live events held in the Philadelphia, PA and Wilmington, DE areas.

Charlie, thank you for being on the call with me today.

Charlie McDermott: Thank you I’m excited.

Joey Bushnell: Today we’re going to be talking about how sometimes business owners are working too hard. We are going to be talking about how people can increase sales with automation.

My first question is… Why is automation critical to business growth, success and financial independence?

Charlie McDermott: Great question. I started this business and entrepreneur group “The Business Entrepreneur network”. I created a monster because I taught our students, about 200 small business owners and we do live events and other things too, but the problem is I taught them how to be great marketers.

You would think how that would be an awesome thing, however when you get really good at marketing, you build your business, get a lot of customers and if you aren’t set up properly you can get very busy.

For many business owners it becomes a vicious cycle of marketing the way the business comes in. It’s like go,go,go and serve,serve,serve then you’re absolutely exhausted and they wake up the next day and say “Oh my goodness sales are down” do it again, market go,go,go and it ends up burning these guys out in many cases. Even in the best case it’s just not a fun way to live because they end up working 7 days a week and missing out on family events.

So about 6 months into the start of this group a light bulb hit us and what enabled me to sell my health club business and spend 2 years with my son out in Hollywood and help him in his acting career was that I was able to build systems in my business and sell.

If you have a choice of owning Joe’s pizza shop or Joe’s in the shop flipping the dough and is at the cash register with the white powder on his hair and on his fingers. He’s serving up your pizza slice and locking up at night and the morning and even cleaning the floors.

Or would you rather have a McDonalds? I have yet to go to into a McDonalds and have the honor of finding Mr Donald in a McDonalds. They don’t need to be there. Those businesses are set up with systems, as we know, that frees the business owner up to do other things to enjoy life and have a predictable cash flow versus Joe’s pizza shop, it’s all in Joe’s head. When Joe decides to retire or move on or take his son to Hollywood, Joe is screwed because it’s all in his head.

Bringing back our Business and Entrepreneur network, marketing is very important and certainly you need to have a good product or service. But if don’t have good systems in place so you aren’t doing the same thing over and over again, spending way to much time doing manual stuff, stuff that costs in our area $10-$12 an hour, when you are worth $500 or more an hour, you are not going to be able to grow your business.

Joey Bushnell: You talk a lot about building a valuable business versus what you call an ABCYT business. Can you give our audience some direction on how to build a valuable business?

Charlie McDermott: For our members from the start, everything we do should be based on selling our business at some point. It’s OK if you don’t want to but sometimes things change. When I got my Health club business I was a college student and 23 years later my kids are teenagers and I wanted to do some things and it just made sense for me to sell my business at that point.

Without those systems in place you don’t have a valuable business. 

So Joe’s pizza shop is worth maybe $50,000, if he’s got a good location or special recipe versus the McDonalds which is worth millions. The only difference is McDonalds has the systems in place, therefore that’s what you want to build a business that has the turn key operation possibilities.

The last thing you want to do is wake up in the middle of the night and say “Oh my goodness, if Joe gets hit by a bus or if Mary decides to leave or take maternity leave” all of a sudden as a business owner, many times our support people end up dumping their work on you. It traps you again from growing your business and that is not a valuable business.

The ABCYT is the “Always be chasing your tail” phenomenon that business owners do pretty much every day of the week. We get caught up in the fires, we end up doing things ourselves, no one else can do it as good as we can versus spending their time building the systems so the same thing happens over again consistently and you take as much of the human factor out of the equation as possible.

Joey Bushnell: What are the 3 gaping holes in the sales funnel?

Charlie McDermott: This starts evolving to taking the human piece out of the equation and especially in the areas where it is critical that we eliminate as much error as possible. When I say error it’s not that staff are screwing up, it’s that many times they forget, they get busy and stuff doesn’t happen when it should.

So when you look at a typical sales funnel you have your big top where people come on board. For an internet business they come in through the website, a retail store they are coming through the door and for other businesses they are coming through the phones. For many businesses they are coming through all of those areas and others.

Question number 1 is… Are we capitalizing on that traffic? Are folks coming to our websites, shopping, picking tyres and then leaving without giving information?

In my health club business, this goes back 8 years since I sold it, back then it cost us $350 to bring in a new sale. We had an army of sales folks and it would drive me crazy if I saw a prospect come through our doors and then 5 minutes later leave and then find out that they didn’t get their information. We have no way to follow up with that person and we either have to do expensive advertising to maybe get them back or just sit and wait. I didn’t like those options. So we made darn sure we had a system in place that captured that information.

The problem with most businesses and the difference between now and then is websites really weren’t that critical back then. Today a lot of folks start there. Especially in the bricks and mortar retail service businesses. They kind of get a feel for things then if they choose to visit, they’ll head to the store.

So if you are not capturing information on the website at the beginning of that funnel that is one of the 3 areas where you are missing the boat. That is a huge gaping hole. If you have 100 people at your website today and none of them give you information you’ve lost that big time. If people stop in the store and we’re not capturing information. Have something in place even if it’s only 10% or 5%, over the course of a year that’s a huge amount of dollars that could flow to your bottom line.

Then when we get those votes, who give us that information then what happens? If you are fortunate to have a sales staff, great, even if it’s yourself doing the sales you all probably have busy seasons. In my health club our busy season was January through to March/ April. People after the new years wanted to lose weight and had their goals and it was lousy weather so why not join a health club, it’s something to do. Then a few months later we slow down a bit.

What would happen with our sales staff during those months is they would become order takers instead of sales people. The difference between an order taker and a sales person is the order takers are sitting there waiting for the business to come in and hand them a check versus a sales person who is working their leads and prospecting.

What would happen in the first quarter of our business is a lot of the warm to cold leads wouldn’t get followed up on because my sales team was just living off the cream. People just walking in the door saying “Hey, sign me up, here’s my money”. The question there is, if I had to do it all over again, and we had 8-9 full time sales people, what if we could have automated all those warm to cold leads?

So there would have been follow up happening every single day or so many times a week and it didn’t involve our sales people, it was consistent and at the end of the week, 2 weeks, whatever the buying cycle is, we could bring them in as a sale and it wouldn’t cost us a nickel. Wouldn’t that be a great system?

I probably could have cut my sales staff in half or better yet keep them at 8 and let them do what they are good at which is sell. They spent probably 80-90% of their time on the phones and a lot of it was voicemail versus if we could free them up just to sell, our sales would have gone through the roof.

The businesses out there have the ability now where software is available to automate their sales and marketing so that they capture information when folks come on to the website. Then those prospects get what is called “Nurtured” along the way so you can identify those who are hot and want to buy today and we are going to pull them in as quickly as possible.

But it’s that bulk of folks who won’t buy for upwards of maybe a year or two. There are some statistics out there, Gartner research says 67% of prospective buyers that tell you no today, will be ready to buy in the next year. Unfortunately most businesses give up after a few days or weeks so they miss out on 67%. SiriusDecisions says 80% of leads you consider to be dead, will buy within the next 2 years. These are flat out dead leads that businesses give up on and 80% of those could become buyers. So another huge, huge hole there.

Joey Bushnell: Wow, definitely some food for thought there.

How can a business owner plug the holes that they currently have in their bucket and instead increase the sales, referrals and testimonials automatically?

Charlie McDermott: The best thing is to get us imperfect humans out of the equation as much as possible. One way is to have the systems in place obviously, and to have a program that leads a bread trail so you can lead your prospect from the beginning point to the end point, obviously being sales transaction.

The challenge is, where is the end point for a lot of businesses? If your buying cycle is a week, we’d all like it to be in 7 days but as we just heard in those statistics, it may take up to 2 years. So what if we had a system in place that went 2 years and beyond? You can do that, you can put that in place so you don’t miss sales.

Not to go crazy with statistics but here is one that will just blow everyone away. It was a question with my sales team because no one wants to be that stereotype pushy sales person who is trying to high pressure me, we have a lot of that in the health business industry.

Unfortunately that hurts businesses, they give up too soon and they miss out on the bulk of sales. 48% of businesses quit after the first call that’s almost half, 24% after the second and 90% quit after the 4th. So only 10% of businesses keep it going for 5 or more contacts. That is important because when you look at when these deals close 81% on or after the 5th contact. So 10% are tapping into the 81% that close.

The challenge is for business owners to stay front of mind, continually have a message and have those contacts without it costing them an arm and a leg. By doing things such as sending out emails but in an automated way so that you as an example have a “Thank you card” for some businesses as a way to say thanks for visiting. Then a series of emails that go out over weeks and months that continue to nurture that prospect and let them know that you are still there.

Occasionally give them an offer to bring them back in to see if you can close the sale. But to do it in a way that doesn’t involve a whole lot of time and energy is a huge advantage you have over your competition.

Joey Bushnell: I understand that one of the major services your company provides is business automation based on the 7 stages of the perfect customer lifestyle. Could you tell us about these 7 stages please?

Charlie McDermott: This is a way of looking at your business differently than most. The typical business is all about prospecting, bringing the traffic in, capturing that information, nurturing those prospects, converting them to print then what happens is they start all over again. They go back to generating traffic, bringing them in, negotiating, whatever that process is to closing the sales and starting over again.

The opportunity there, let me jump back to my health business again, 60-70% of our members, when I sold it we had about 12,000 members at the time, were referring new members to us. So most businesses have the ability to control that rather than just relying on “I give you a good job or product, you’ll tell your friends and family”. Unfortunately in this day an age with so much clutter and so much distraction that isn’t necessarily true.

What you want to do is put a system in place that reminds folks that you are there and you can help their friends and families and basically build referrals.

Going back to generating more traffic and closing more sales right after the last sale, the next step in the perfect customer life cycle is what we call the “Deliver and Wow” stage.

The wow stage is all about delivering the unexpected. So under promising and over delivering we’ve all heard that before. What if after someone purchases your product or service they got something in the mail or via email that was a digital download that didn’t cost you anything but was an extra added bonus that made them think “Wow these guys are really special”.

Every business out there battles with buyers remorse. I don’t care what product or service you are selling and certainly the more high end it is the more you are battling. This is also a great strategy to reduce that or eliminate that because now you are making these folks who were maybe thinking “Umm I don’t know if I made the right decision” then in the next day or the next hour there is something they get which was totally unexpected and totally takes their mind off “Did I make the right decision” to “Wow this is the right decision for me”.

So the wow sequence is exactly what is sounds like. It’s all about wowing your customer and it’s an automated sequence that starts form the moment they purchase. As an example when someone purchases something on a website or in your store the actual purchase would trigger a thank you card or email that says “Hey, thanks for purchasing”. Then a series of events could happen over the next few days, weeks, months or even years to make them feel great abut their purchase.

Here is what happens in most businesses, that I just had an experience with last year, we decided to get our house painted. Joey have you ever had a house painted?

Joey Bushnell: I haven’t had one painted but I painted one before.

Charlie McDermott: Right so after you painted you know it’s good for life. That is what my painting contractor thought too. However 3-4 years into it I noticed the paint was peeling. Did you ever see that on a paint job?

Joey Bushnell: Yes

Charlie McDermott: You would think that these guys would contact their customers after a period of time and say “Hey your house may be in need of more paint, or if it’s not maybe you want to change the color of it”. So last year I decided it was time and I liked the guys who did our house last time, fair price, did a great job. I didn’t even want to shop I just wanted to get them here. Do you think I could remember who they were?

Joey Bushnell: Probably not, no.

Charlie McDermott: No I couldn’t, I looked, I couldn’t remember. They sent us nothing, no phone calls, emails, nothing. So I end up shopping around and finding another painting contractor and it’s a shame because I lost out, they certainly lost out on about a $3,000-$5,000 gig there.

That is the way it is with a lot of businesses they assume they’ll remember us, we did such a great job and sold such a great product. I don’t care if it’s 3 years, 3 months or 3 weeks even, folks today have a short memory because there is too much stuff going on.

The wow sequence should happen and continue for a long long time. Especially if you are in a business like the car, real estate or things of that nature, you are dependent on them coming back 5-7 years down the road, you don’t want them to forget about you.

Then there is the point where after the sale, folks are either happy or not happy. Wouldn’t you want to know if someone wasn’t satisfied with your product or service?

In most businesses the only time we find out is if they are really ticked off and you get a nasty letter phone call or whatever it is. Thank goodness so we can fix it but it’s probably the 80-20 rule there. 80% of folks who weren’t satisfied never tell us but they are telling their friends and everyone else and maybe even going on social media and so forth.

Today more than ever it’s important to have a sequence in place even a simple email that goes out on an automated basis, let’s say 30 days after the purchase that says “We love having you as a customer, hopefully your product is going great for you doing everything it says and then some. By the way can you let us know if you are happy or not happy? Just click a yes or no button right here.”

The “yes button” saying they are happy, goes into a separate sequence and when I say sequence I mean a series of emails or it could be postcards, voicemail blasts or anything you can think of. The next email that comes out at a certain point in time could be “Now that we know you are happy maybe it’s a good time to ask for a testimonial, or tell you about our referral program”.

It would be kind of awkward to ask for a testimonial if they weren’t happy with the product or joining the referral program so they can blast it out to the whole universe. That is obviously important and good to know who is going to support you.

But more importantly it’s the folks who aren’t happy. The second they click that no button, you could trigger an email that goes out to your PA or receptionist to make a call right away and connect with that person. Have an email that goes out at the same time saying “we are sorry we are going to do everything we can to fix it…”

I did this back in the day with my health club business but we didn’t have email, we found that our unhappy customers end up being our best supporters because we were able to fix things and listen to them which no other business was doing. So when we got them back to being happy they were the happiest customers ever.

So there’s a huge opportunity to have something in place not just for the obvious, you don’t want someone negatively talking about your business but the extreme positive that those guys and gals are going to be with you for life because you are one of the only businesses that listens to them.

So to summarize the 7 stages in this perfect customer lifecycle are…

1. We want to attract the traffic

2. We want to capture them as leads in our business whether it’s with web forms on the website, phone calls and have those systems in place or if they come in to our business.

3. We want to nurture them in the 3rd stage. Whether they are ready to buy today or 2 years from now there is some kind of a system in place that keeps my business front of mind.

4. Then there is the convert the sales point, which is important. At some point we want to generate dollars from this group.

These next few stages are really critical and the ones that most businesses leave out.

5. The deliver and wow

6. The up sell customers stage there is huge opportunity there that most business forget to up sell and cross sell. Once a customer has bought your product, 30 days later they may be ideal candidate for your next product or service.

7. Then the final stage number 7 is focusing on getting referrals. Referrals whether you have 60-70% like I did in my business or 10-20% you can still build that business and that’s the best kind of business you can get. One because it doesn’t cost you an extra nickel and we tend to listen to our friends and family members when purchasing something than an ad in the newspaper.

Joey Bushnell: Brilliant, Charlie that is some great information and thank you for letting us know the 7 stages that was very cool and I was taking a lot of notes while you were talking there.

Charlie, where can we get more of this stuff from you and how can we learn more about you and your programs?

Charlie McDermott: Yes there are 2 places… The business and entrepreneur network you can find at Ben is the acronym for business and entrepreneur network and we branded it after Philadelphia’s best known entrepreneur. You may know this guy, Benjamin is his first name and he is a big time inventor

Joey Bushnell: Benjamin Franklin?

Charlie McDermott: Yes you got it. In the states Ben is a $100 so we give away Ben’s at all of our events and have some fun there.

But our automation you is is our automation services where we help businesses automate their sales and marketing. We get them from working so hard, back to some sanity where their profits are significantly more then they were and they can maybe go on a vacation now and then.

Joey Bushnell: Charlie, we’ll put both of those links where people are watching it. I’d just like to say thank you for your time today and the great information that you have shared with us.

Charlie McDermott: Thank you for the offer Joey