by: Yuri Elkaim

I’ve got another awesome episode for you, Healthpreneurs! It’s good to have you back on the Healthpreneur podcast. Today I’m chatting with Phil Caravaggio, the co-founder of Precision Nutrition, about what he did to make the Precision Nutrition brand successful for over 20 years now.

Phil is the man behind the madness. His systems and processes are the unsung heroes of the company’s success, and he’s going to reveal exactly what secret sauce he used to help the company flourish from the inside out.

Tune in to hear Phil dive into their business model and reveal how they market deep commitment so they attract deeply committed clients right off the bat. If you want to get – and keep – quality clients, you must offer a great product and experience. In this episode, Phil breaks down how to do just that.

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Click here to subscribe to the Healthpreneur™ Podcast on iTunes
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In This Episode Phil and I discuss:

  • Putting the customer’s needs first.
  • Content, product, launch marketing, and reputation.
  • The benefit of social momentum in training programs.
  • Improving the product experience by offering the service first.
  • How suffer and sacrifice fuel commitment and a desire to change.
  • Finding the people you want help and the problem you want to solve.

 

3:30 – 12:00 – The secret sauce to Precision Nutrition’s success

12:00 – 17:00 – The products, programs, system design, and building trust

17:00 – 24:00 – Marketing deep commitment and what makes a great product

24:00 – 35:00 – Client feedback; understanding why people become and remain clients

35:00 –  41:30 – Product development and the value of a meaningful conversation

41:30 – 45:00 – The key to lasting success

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What You Missed:

In our last episode, we talked about  a controversial Facebook post which spawned the question: Is it unethical to charge more as a health or fitness professional?

My post was titled, “Health Experts: How to Find Clients That Can Afford You,” and it clearly rubbed some people the wrong way. People were commenting that health and fitness services should be kept at affordable prices that are accessible to everyone.

What’s your thoughts on this topic?  Do you agree or disagree?

Tune in to be a part of this debate and hear what we’ve got to say.

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Transcription

Alright a couple of months ago we had a $40 million man on the show, John Berardi the co-founder of Precision Nutrition with a great conversation, and today we have his partner in crime, Phil Caravaggio on the show.

Now this is an interview I did with him about two years ago about what Precision Nutrition has done to become this amazingly successful recognized brand in the fitness and nutrition space over the past close to 20 years now, and in this interview he’s really going to give you the secrets sauce. He’s going to share exactly how they run their business, they business model they’ve chosen, why they’ve chosen it. We’re also going to get into how to create something really amazing, whether you talk about it as a product or service, how do you create something that is really, really amazing and really get that out into peoples hands so they can transform.

Phil is a good buddy. I feel bad that I haven’t even connected with him for the past year or so, we’ve both been super busy. But he also lives in Toronto, we were in strategic coach together, we’ve had lots of amazing conversations on business, philosophy of life all this great stuff. He’s a big thinker, he is a very, very big thinker. And side note, if you’ve read the book Principles by Ray Dalio, if you haven’t, it’s an amazing book. Phil is the guy who made that book happen. It’s a long story, but honestly just read the book and you’ll see how it all came about. He’s a really great person. So I’m really excited to bring this interview out of the archives to highlight the one and only Phil Caravaggio, so let’s welcome him to the show.

Phil Caravaggio:                It’s going great Yuri, how are you?

Yuri Elkaim:                         Very good, thank you very much. So I’m really excited to have you on the show because you and I have had a lot of conversations over dinner about strategic coach, about business developments and all this stuff, and you’re probably one of the savviest CEO’s that I know and you’re still young. I mean you’re not a 75-year-old Warren Buffet here. You’re a young guy but very sharp. So I’m really excited to kind of dive into your mind and bring some of that goodness out for our audience to kind of benefit from.

So for everyone listening, if you guys know about Precision Nutrition you probably know more about John Berardi who’s kind of like the content figurehead of the business, but you’re kind of the man behind the madness with your systems, and your processes, and your product creation stuff. So for you what’s been … How … What’s been the secret sauce to growing Precision Nutrition from where you guys started out as two personal trainers to where you guy are now, impacting hundreds of thousands of people with your amazing coaching programs?

 

The secret sauce to Precision Nutrition’s success

Phil Caravaggio:                Well I think the secret sauce is a commitment to really do right by the customer. That’s where we began. John and I have very different backgrounds, but they’re very complimentary and John the co-founder just a highly, highly regarded nutritionist who’s just brilliant. One of the brightest guys I’ve ever known. And his research acumen and ability to kind of suss out what’s really going on the human body was number one. So the subject matter expertise is the basis of it, and I can get into what I think that looks like in other subjects than the one we’re talking about right now.

From my perspective, my background is business and engineering, engineering primarily. So I thought about things in terms of systems, and products, and how do you create things that help people? And sort of the engineering degree that I was working on, although I eventually left because I was painfully bored by it, was called systems design. The design of working processes and systems that deliver a result. And from a business perspective, my dad was an entrepreneur, I king of grew up watching him sell. I mean I think I didn’t realize it at the time, but later it kind of clicked for me that’s what he was doing, and he was selling in a different way than I’d seen people sell before. He was selling by building relationships.

So between JB and I, I think we put together a sort of formula that I’d become fond of, and I think it’s the crux of PM, sort of four things. So the first is, superb content. When we got started we focused exclusively on how do we produce things that people can consume that will help them right away without them having to buy anything? I’m a real fan of Frank Currens, and Frank has this thing he calls Results in Advance. How do you actually deliver a result before you ever ask for something? And so that’s what we tried to do in our content. So number one was content.

Number two was product. Pretty early on we figured out that to get any leverage on life so that one hour of my time or John’s time now would be worth 100 hours that we spent last year, 1000 hours two years ago, was to create a product. It’s the only way to stop trading hours for dollars, which is the scenario that we’re all in when we begin. So we focused … As soon as we had content out in the world that people seemed to like, what kinds … how can we consolidate this into a product that can work while we sleep? And we can talk a little bit about product if you want to get into that, because I consider myself a product guy. I love building products and in fact I think that’s one of the things that I do best.

So number one content, number two product. Number three is launch. So we’ve kind of always had from the beginning, mostly out of necessity in the beginning, but it’s become a core capability of ours, which is launch marketing. So everything we do is about a launch event. Our coaching programs you can only get into them twice a year, you can’t come on an average Wednesday and just say, “Hey I’d like to become a client of Precision Nutrition”. You have a spot. There’s January and July, and it’s always worked that way. And I think the idea of orienting ourselves around a launch market where we create a big critical mass of attention moment in time, and then just kind of relax and the audience after that they just consume content, and they’re getting help, and we’re not asking for anything.

And then every kind of six months there’s this cadence of, “Hey you’ve learned a lot about us, if you like what we’re doing now’s the time to make a decision about whether what we do is appropriate to you, and no big deal if it isn’t. But if it is, you have to act now because there isn’t going to be another moment in which to do this.” So launch marketing for is the third sort of pillar of what we do. And a lot of people talk about this other than us. In fact, I didn’t know it at the time, but when we first started I realized a lot of how we approached launch marketing came from Jeff Walker. I’d sort of heard it third and forth hand from different people I knew, and kind of picked up little pieces of it when we started to build our own system. But as I become more attuned to the origins of these things, I see that Jeff Walker was kind of the King Pin of launch marketing.

And also Apple does a lot of launch marketing. That’s their whole method. And so they create this whole fuzz around the product, that you can’t actually buy, with their key notes and all this sort of thing. Then you go to the store and there’s this huge line up, and all the dynamics are advent or launch marketing.

So there’s kind of content, product, launch marketing, and then the fourth thing is reputation. So at PN we’ve always put our reputation before anything else. So if anything comes up, if we’ve accidentally done poorly by a client, or someone doesn’t like what we’re doing, or if we have a decision to make whether to take the short term money potentially at the expense of our credibility, or take no money, or the long term money while burnishing our reputation and sense of trust, we’ve always chosen the latter. We always put our reputation first.

So we’re very aggressive and guaranteeing our services, and customer service. If somebody had a problem it’s not like, “Hey can I try and convince you to stay as a client? Can I … Here’s all your money back.” We’ve done things where if someone comes to us, and for whatever reason, they don’t love the experience they had, we’ll actually buy them something else. Hey, if you think closely about what it is they were really looking for, not only give their money back but say, “Hey, you also invested a bunch of time in this that could have been better spent. Here’s … Let’s put you on the right track, you really should be going to this person or that person. Here’s their book or whatever.” Anything we could do to make our reputation stellar. So content, product, launch and reputation, it’s kind of in my opinion on top of the subject matter expertise, is the secret sauce for PN. And we can go into any of those if you like.

Yuri Elkaim:                         Well coming to stores near you. PN secret sauce. There we go.

Yeah but it’s, I think for anyone listening who’se followed Precision Nutrition for a number of years, you guys know that … I mean the reputation you guys have build, it really proceeds you. It’s incredible content, it’s trusted content. And as you said, because you are basing a lot of your coaching programs on a launch or event model, there really is a ton of goodwill that’s built up within your market place, or within your audience at least that really positions you guys as kind of a non-promotional typical kind of business. Which I think is very, very endearing to a lot of people looking to change, their bodies or their eating habits.

So with that said, let’s say somebody comes into PN, they’ve heard a lot about it and they want to lose 50 pounds and transform their body, and they have to wait four months, or five months, or however long it is until the next launch, or the next program begins, how do you guys … I mean have you dealt with people saying, “Listen I just want to get started now, I don’t want to wait four months.” How do you mitigate that and is there, or are there things other than your content that people can start doing before they get into the lean eating coaching program as an example?

 

The products, programs, system design, and building trust

Phil Caravaggio:                Yeah. So there are a number of things they can do. We have a whole host of products that they can purchase that aren’t kind of 12 months programs like our coaching programs, which are intensive and require a significant commitment. So we have books, and we have a gourmet nutrition cookbook, we have a product that was kind of the core of what we did before we got into building out programs, it’s called the Precision Nutrition system. It’s sort of somewhere between a book and a course, like a self-study course. So it’s kind of a binder and it covers every aspect of doing it on your own. So what we’ll typically do is say, “Hey, start here. I really appreciate your interest and we have these things available to you.”

And we try to be pretty honest about the rationale for the launch, which is that A, it works from a business perspective. Economically it makes the most sense, because it allows you to focus your coaches on one group of people all the way through to the end without having, “Oh here’s this person who’s one day in, this person’s been here for three years, this person’s six months.” It’s cognitively impossible to deliver a good service that way. But also it’s super helpful for the client because there’s a social momentum in coaching programs when everyone begins at the same time, and sort of progresses at the same pace, and ends at the same time. Then you’re forging these social bonds that are unexpected.

You can’t really market the social bonds. You can’t say, “Hey, one of the great benefits is that you’ll meet people.”, because I find that people are not really intrigued by that. And you can’t promise it, but it is what happens and it’s one of the things that people value the most. And that’s really difficult to do when people are starting at different times. They don’t have the sense of comradery or the sense of experiencing.

So with all of that said, I think every business has to make hard trade-offs and there are no easy answers, and our model is very different than other’s models. In fact, every time we hire a new executive or a new leader into the company at PN, one of the first things they say is, “Well wait a minute are you telling me that if somebody comes tomorrow with 1500 or $2000 in hand saying, “I’d really like to work with you” my answer’s going to be no? That sounds crazy to me.” And I have to explain every time it happens, because it’s a rational response that, “Yes that’s actually what we’re going to say. And it’s better for the client, it’s better for us, and it will still work.”

And one of the things you’d notice is that on a philosophical level I think people sense the authenticity and they start to build trust when they see this happen over time. When they see that the business operates in a very kind of straight forward, trustworthy way. And also I feel like the sales cycle for big products like this, like 1500, $1000, $2000 in that range and above, is the sales cycle is very long. A lot of times people will sign up for an interest list and say, “You know what I think I really … I think now is the time for me.” And they’ll go through a launch and they won’t sign up, and they’ll go through another launch six months later and they won’t sign up. And they’ll go through another launch a year and half later and finally sign up, or two years later.

It takes a long time, and I think that our system is designed specifically to build trust. And if you can do … you design a business where you can make enough money that you can eat, and you can pay the people you need to pay, the longer period of time you can build trust with clients, the better those clients are going to be. And the less you have to take the short money, the better your long term prospects are.

 

Marketing deep commitment and what makes a great product

Yuri Elkaim:                         Yeah. I mean that’s a great perspective on it, because it’s almost like planning a trip right. You plan a trip six months out and you’re excited about it, you’re almost budgeting for it as well. So I kind of feel that there might be a similar type of process happening with people on the early bird list, where they know what they’re getting into, or they have a sense of it, and then there kind of is this eager anticipation and there’s probably a greater stick as a result of that as well.

Phil Caravaggio:                Yeah, that’s a great point. I think that’s true that people … it deepens their level of commitment when they … And this is one of the things Dan Sullivan talks about and you and I’ve talked about over dinner, and it’s something that I’ve become more aware of. I didn’t know this kind of explicitly or consciously when we were doing it, but I think it’s true and it’s that, you sort of have to disqualify people rather than qualify them. And so the proc … The act of saying, “Here’s what we do, and here’s what we don’t do”, quickly allows people to decide whether or not they’re … this product or this service that you’re offering is right for them, and make a good decision. And those who end up wanting it even after you’ve laid out the who it’s for and who it’s not for, become so much more committed to the idea.

And in educational products, or in transformative products, which is the space that you plan so do we. We’re trying to help people change their lives and solve kind of intractable problems that they’ve been dealing with often for years, if not their whole life up to that point. It requires that level of commitment. You can’t just go in and read a couple of things, and then think that the problems going to be solved. If we’re talking about big problems like changing your … getting healthy, getting fit, dealing with money, dealing with whatever people are marketing. If it’s a transformative change that’s required, you’re going to need deep commitment from the client. And I think the way that we market that and an advance point about disqualifying actually deepens the commitment.

So it has this unanticipated consequence of making the product experience better, because the customer is so much more invested in it.

Yuri Elkaim:                         Sure. Yeah, that’s great. So speaking of products, you obviously self describe yourself as a product guy. What in your eyes, what really makes a great product, and whether that’s a book, or a course? For you, when you guys, because I know you spent a lot of time on this, when do you know like, “Yes, we’ve hit it, this is it, and this is what we’re looking for”?

Phil Caravaggio:                Yeah. I think it’s the … I think a great product is the intersection between real deep subject matter expertise, and deep listening and understanding of the customer. So the subject matter expertise can’t really be fake, you have to have paid your dues or really learned something here. And you have to … The saying goes, you can’t take someone somewhere you’ve never been. You have to have gone there in some form or another. So if it’s nutrition, if it’s fitness, if it’s finances, marketing, business development, you have to be able to lead the customer with real authority.

Yuri Elkaim:                         Sure.

 

Client feedback; understanding why people become and remain clients

Phil Caravaggio:                So that’s one. But the other one is the critical one, and that is a deep understanding and listening to the customer. Because I find that this is what typically doesn’t happen. You can sense right away when a product is great, because it feels as though it’s made for you. Like somehow it got in your head and knew what you really wanted. And I found that the most reliable way to do that is to have meaningful conversations with people who either have bought an early iteration of your product, or purchased a service from you. And even better to start with a service than a product, because one thing that’s often overlooked is that most great products are the synthesis of someone doing that work manually for someone.

In other words, before we built a Precision Nutrition product, we were doing Precision Nutrition coaching without any systems, without any technology, without any books, or videos, or anything like that, and you would just sit there and listen to what people were … what problems they were facing in their life and solve them however we could in dialogue, send them an E-mail, point them to other things, buy other products for them and say read this. You’re just scrambling to figure out what you can do to help that person.

So mostly products start as a service I think. Manually, not automated, not technology driven, they’re just, “Let me understand what this problem is this person’s facing by actually listening to them and hearing their story. And then let me just see what I can do without having planned it out in advance.” And then over time as you start to get some traction, figure out that what you’re doing is helping someone, you’ve figured how to simplify and automate it, and that becomes the product.

So that’s kind of what we did. The first thing we did was coach people. We didn’t have any … Now we have this incredible software that manages all our coaches, and manages our clients, and tracks their results, and delivers on the right program at the right time, it’s phenomenal and it’s super complex. But in the beginning all we had was a phone and an E-mail account. We started off working with the lead athletes, ones that were traveling around the world, and we would just talk to them, “Hey, what’s going on? Hey, what’s happening? What problems are you facing?” And then we would just shut our mouths and listen, and then we would just kind of convene and say, “What can we do for those people?”

And as we did that, we sort of simplified it. The act of actually listening and figuring out what people are going through that really catalyzes the whole thing, that plus subject matter expertise over time equals great products. But either one of them missing sends you off track.

Yuri Elkaim:                         Yeah, that’s great advice, and it’s so simple too. And I think it’s an area that I’m guilty of overlooking for the first several years of my business, because for a lot of creative types who are just, “Oh, I’ve got this amazing idea let’s just make it happen”, without really listening to what people want or where their problems lie. But I think there’s also, as you mentioned, there’s a huge benefit to those who for instance worked as a personal trainer, or worked as a one on one coach, because they’re actually dealing with people in person or on the phone. And I think a lot of people online, they miss that important element to that interaction which is so important, and now it’s like getting on the phone with somebody is almost like a huge chore and it’s like something people want to avoid. But I think, as you’ve mentioned, that’s where the real … that’s where the gems are kind of stored in terms of finding out what people need solved and really just delivering it to them.

 

Product development and the value of a meaningful conversation

A little while ago you were telling me about a really cool process that you guys had gone through with respect to getting feedback from your customers, and I remember it was a small distinction for instance a lot of people or business will ask their customers like, “Why did you get this program?” But you made a small distinction, you said something like, “What was happening in your life before you bought this program?” Something like that. Can you ..

Phil Caravaggio:                Yeah.

Yuri Elkaim:                         I mean that was so brilliant. You’re almost kind of creating a timeline of events leading up to the purchase. Can you describe that a little bit, because I think that’s invaluable for our audience to really understand?

Phil Caravaggio:                I think that’s such a powerful tactic. And the idea is to have a meaningful conversation with a customer in which you don’t ask them why they bought what they bought from you, or whatever, and you don’t ask them what they want in the future. Because both of those questions will … they trigger the part of the brain that makes things up, and that’s what you don’t want. You don’t want someone creating a story that doesn’t actually map the reality. So you ask someone why they did what they did, often they don’t know. They’re creating a story on the fly in their minds to explain this often sub-conscious desire. And so if you listen too closely to people’s answers as to why they did what they did, you get led astray.

If you ask people what they want, they often don’t know and they’ll kind of make things up, and they don’t know what’s possible either because they’re not the subject matter expert. So, “What do you want in fitness?” “Well I don’t know. I can give” … I’m going to answer the question. As a human being when someone asks me something, I’m going to answer. The question is, is that answer going to be any good, and as non-subject matter expert the likelihood of it being good is probably low.

So instead what we do, and I learned this from a guy named Bob Mesta, who is kind of a marketing genius in his own. He is a former engineer, but moved into marketing in major products. Like products for fortune 500 companies, like cars, consumer packaged goods, things that … We probably in our house, each of us, own four or five different products he’s developed as a result of this system. And this system is basically this, you figure out the action you want people to do more of, like buy your product, and you have a meaningful conversation with them in which you ask them what their story was.

You ask them not why they did what they did, but when did they do it. What was happening right before that? What was going on in their life at that time? And what about before that, what about before that? And you sort of reconstruct the timeline that led up to that decision, and figure out the events that were happening in their life. More like a journalist, or like a documentary film maker then like a typical marketer.

What you find when you do this is that, what drives peoples decision is often … It seems so obvious in retrospect, but you can’t possibly predict in advance. And I’ll give you an example of that. One of the reasons that people buy our coaching, for example one of the things that happens in their life is that they suffer a loss. A parent that they’re taking care of will pass away, or something like this, and you’ll see this … I’ve done so many of these conversations with clients, and you hear, it’s different variations on a similar theme no-one is talking about. And what does that have to do with nutrition? Well we didn’t know, except when we started to dig into it, what we found is that what people are looking for is someone to care for them the way they care for others.

In the act of caring for others, they do so at tremendous cost to themselves, their own health and well-being. If someone’s caring for an elderly parent, they’re often very proud of the effort that they’ve put in and the degree of love and care they’ve shown for their parent, and how much extra time they got to spend with them. But at the same time they also realized that in that process of maybe a year, two, three years of intense caregiving it comes at tremendous cost to their body, and health, and they often encounter … they gain weight, and encounter health problems that they hadn’t before and all this stuff.

So they’re looking for somebody to care for them. They’ve suffered in sacrifice to the person they were caring for, and when the person passes away they have this space and void in their life and their way of living that now is empty, but can be filled in a new way which opens up the possibility of an intense commitment in a coaching program like ours. And so when we in a certain segment of our client base, we were hearing this story over and over again. And you’re in the nutrition and health field, have you ever heard that in anybody’s marketing?

Yuri Elkaim:                         No. I mean that’s the thing. You would never, and even if you ask somebody they would probably never disclose that.

Phil Caravaggio:                They would never … They don’t even know. Even if they wanted to disclose it because they were a very forthcoming and honest person, they had never connected the dots on their own. And often at the end of these conversations when you get the story out of people, they’re like, “Oh my God, I never saw it that way.” Because it’s a different part of the brain, the kind of emotive part of the brain is different from the cognitive part, and the cognitive part creates stories for the kind of emotional part. And so so many of these decisions are driven by pain, and suffering, and things that people don’t have conscious access to. And they can only be gotten to by figuring out the story, and when you figure out the story and you talk to people and you see, “Okay here’s what’s happening.”

The why, the reason why they did what they did becomes obvious, you don’t have to ask them. You can see it clear as day, and they can see it clear as day, but only after you’ve asked the factual questions about when, where, how, with who, all this kind of stuff.

Yuri Elkaim:                         Sure.

Phil Caravaggio:                And this is what people don’t do. In terms of product development one of the best things that people can do is just go out and talk to people who have bought your product, if you’ve developed one. So the rationale for doing weight, what you were talking about earlier in your career, where you’re doing a first draft of something. You’ve got this real creative impulse and you create a product and you’re like, “This is great.” And some people buy it. I don’t know, maybe they didn’t buy it in the amounts that you wanted at that stage, but some bought it. And the best thing you can do is then go to those people and have this kind of conversation with them. What was going on?

And then do another revision. Build iterate on that product based on what you learned, or maybe even create an entirely new one, this has happened to us a number of times, based on what you learn in those stories. And if you don’t have a product, what you can do is actually do interviews like this with people who have bought products you like to compete with or emulate. They’re not that hard to find. If you were trying to get into personal training and figure out how to sell more personal training, you can actually interview people who have bought personal training and figure out what their story is, and then use that in the way that you sell. Those people are out there, there are already personal trainers out there. You can figure out … They’re not that hard to find.  If there’s a book you want to … you like, you can figure out why people bought that book.

And even better in product development is figure out why people stop using a product that you created. Figuring out, doing the same sort of interview, and this is very difficult to do. This is why people don’t actually do this. People don’t like to hear real challenging feedback about themselves. They don’t like … No-one … None of us like to … I don’t like to see my shortcomings in my character, or in my personality or in the things that I’ve made. But actually getting that access is so powerful. If you can figure out why people stop using something they bought from you, you can figure out what about it needs to be fixed in order for those people to keep consuming it, keep using it, and stay lifelong customers of yours.

So we do the same thing when people leave our coaching programs with a very low attrition rate. But it does happen, and one of the reasons it’s low and getting lower is that, when this happens we’ll often go to someone and we’ll say, “Hey, look I know you’ve made your decision. I’m not going to try and change your mind, I totally respect it. But what I would like to know do is learn about it. If I give you $100 Amazon gift card, would you be willing to speak to us in kind of a really casual way about your experience maybe half an hour, 45 minutes on the phone?” And most people are dying to be heard in that way. They don’t want to be challenged, they don’t want you to come in and try and convince them that they made the wrong decision. The decision’s already made and it can’t be changed in my experience, but they’re dying to share their story because often they wanted it to work out, and they have a pretty good idea of why it didn’t. And as long as you can create a safe environment where they feel like they’re not going to be judged or challenged, they’ll tell you exactly what happened.

And so in our coaching programs for example, we found that if someone wrote us an E-mail and got a long delay in the response, that was a huge predictor of them quitting. Or if they wrote us an E-mail and the E-mail overlooked something personal about them that they believed we should have known because they’ve been a client for six months or whatever, that was a big predictor of quitting. So for example if someone … We had one woman who was a vegan, or a vegetarian, I can’t remember, and she was sick. She wrote an E-mail to her coach saying, “Hey, I’m looking for … I’m getting bored with the protein that I’m eating, could you give me some more suggestions. What else would work for me?” And the response was … from the coach was, “You know what you should … Here’s some kind of things that people typically overlook, like” … I can’t remember what it was, turkey or halibut, but they included things that a vegan wouldn’t eat.

And the coach just in that moment made a mistake and didn’t connect this is a vegan, and they’re asking for more protein, here’s what … they just saw this E-mail that had a very specific question, and they answered the question but they just didn’t incorporate the context that they should have known about that person.

Yuri Elkaim:                         So a lot of times people just … it’s almost like they’re not feeling appreciated or recognized?

Phil Caravaggio:                Yeah. And that would lead to them dropping out. So that would be a predictor of quitting. And so that allows us to fix the experience for other people. You get in there, someone will tell you this in half an hour, 45 minutes. You give them 50 buck or 100 bucks and they’re thrilled, and they feel heard, and you get the information you need to go and re-engineer or redesign the product, and you prevent yourself from doing one of the classic product development errors, which is over engineering. You start to fix problems that people don’t actually have. Because it’s one of the worst things that can happen in product development is this idea of, “Wouldn’t be cool if, or we should, blank.”

Those are always … Whenever I hear that I ring the alarm, because I’m like, “This is … If we do whatever finishes those sentences we’re screwed.” Because we’re going to spend a bunch of money doing something that we don’t actually know makes any difference to people. Whereas when you see someone just stop using what you’re selling, you know if you fixed that they would have stayed. And if they leave with a bad experience it’s powerfully negative word of mouth. That person is going to tell 10, 20 people how much their experience sucked. So now you’ve got negative marketing out in the world.

So there’s such a powerful tool available to everyone. It doesn’t cost very much money, you do what you need to do to get them on the phone and that’s it. But you don’t need to have any special software, you don’t need to have any special training, you just need to have a meaningful conversation where you ask people what their story was leading up to the action that you’re trying to examine, and either get more of or less of. More of if they’re buying, less of if they’re quitting, and take what they say seriously.

Yuri Elkaim:                         So in your experience a lot of the, at least in our business, and I would assume a lot of businesses, the biggest reasons for refunds or cancellations is the money issue. Either it’s too much money, it’s cost too much, or I don’t have the time. Do you find that when you go deeper that those are BS, and those are just kind of like surface answers that cover up the deeper … the real reason?

Phil Caravaggio:                Yes, yes I do find that. I find that those are the things that people say. It’s like a break up, it’s not you it’s me. Like, “Oh the money, or I don’t have the time, or whatever.” But what we know is that at some point they thought that the money was fine because they bought, and at some point they thought they’d have the time because they bought, and at some point that changed, and it’s about figuring out the moment that it changed. And there’s always a moment, there’s some event that happened, an experience they had, not always with you. Not always something that you did in your product or in your service, but something that happened in their life that changed things.

And not all of them you can fix, but knowing what they are gives you the opportunity to do it if you can. And just accepting all the money or the time, because how many times have you probably said that to someone? I’ve said it to someone, “Well you know it’s a little too much money. Well I don’t have the time.” But it’s bull shit.

Yuri Elkaim:                         Well the thing that I’ve recognized with myself as well as some of the customers that have refunded some of our products, is the moment in time where they go from excited to this is not going to work out for me, is when they download or open up the material. And they’re just like, “Holy cow this is too much stuff.” And there might something else obviously going on in their lives, or they’re maybe hoping for a magic pill, or maybe they thought it would be easier to implement. But let’s just say that’s the case, if you have that intel then as you’re saying, it gives you a really good idea of how you can for instance craft a follow up sequence for buyers to help them consume the information–

Phil Caravaggio:                Yeah, absolutely.

Yuri Elkaim:                         — and use the products. Because if people aren’t using it they’re going to … it’s going to sit there and they’re like, “Well why am I getting billed for this if I’m never using it, and I might as well refund it.”

Phil Caravaggio:                Absolutely. And you know what, it’s exactly … that’s the kind of stuff we learn all the time is, “Hey that person at that moment felt like, “Oh my God” they were overwhelmed.” So can we go back and change that experience, so that instead of getting this massive download, they get one E-mail, or one one-pager, or one … Do you know what I mean? I don’t know. I don’t know what the answer is but I know that once I’ve identified the problem where I need to start experimenting. And often you also get to know in what direction. Like if someone feels overwhelmed the opposite of that is the feeling of kind of calm directed simplicity. So what kind of experiment can I run at exactly that moment in time in exactly that direction, and then bang there’s where you product efforts go.

Yuri Elkaim:                         Yeah, that’s brilliant. I mean there’s so much value in what you just said here in the last couple of minutes. Well the whole interview has been great. But for all of you listening, because I’m telling you this is probably the most common question I get asked is, how do I get my first product out there? And I don’t even know if that’s the right question.

I often tell people, the first question you should be asking is maybe, who? Who do you want to serve, and what are the issues and problems before you even think about what do I want to develop? But if you are in that product creation mode, or if you do have an existing product is, reach out to your customers, I think especially as a CEO of your business is they would appreciate if you’re the one who jumps on the phone with them–

Phil Caravaggio:                Absolutely.

Yuri Elkaim:                         — as opposed to just some customer service person, and to really show them that you care, like, “Hey, listen we want to make this better for what else can we do?” Stuff like that. So I think this is just really, really valuable Phil, so thank you so much for sharing. I mean we can talk about this stuff all day long.

I just want to ask you one more thing.

Phil Caravaggio:                Sure.

 

The key to lasting success

Yuri Elkaim:                         In your experience with … I mean you know so many amazing entrepreneurs and business owners. What do you think is the number one key to their lasting success?

Phil Caravaggio:                Well I think what the key is, is finding, maybe it’s your who question. It’s finding the who and the particular problem that is vexing to you that you really, really are consistently motivated to solve. Like there’s a person you want to help, there is a problem you want to solve and it gets you up in the morning. Because the path of entrepreneurship as you well know, is a challenging one. You don’t get to turn off your brain at the end of the day and say, “Okay, I’m done.” It’s really difficult to compartmentalize, and so the thing that makes it go is the constant fascination with helping. Doing something that makes a difference in someone else’s life, and seeing the change. That’s a … What you call heart centered entrepreneurs, that’s a I think what drives them.

I mean there are different types of entrepreneurs, there are sort of sociopathic entrepreneurs, there are all … But the types of things that … the people you and I like being around, the things that drive them is this fascination with being a service. Figuring how to take whatever gifts they’ve been given, whatever experience or talents they may have, and apply them to the benefit of someone else. If you can do that and find an area or problem which the work you do you’re really proud of, just you, you of your own accord, you’re really proud of it. And if you can do that in a way where you don’t have to get a real job, you can make enough money out of it, you can make a living and beyond, that’s the dream come true.

And it’s not easy but it’s possible. And I think the thing is you have a bit of a willingness to go places people aren’t willing to go, hear things people aren’t willing to put effort out in order to have that little bit of an advantage. And if you have that and you have the desire and the fascination, I think that’s the formula.

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Wrap up with Yuri:

So there you go. Pretty awesome stuff right. Again if you want to follow Phil and Precision Nutrition, precisionnutrition.com is the website can follow Precision Nutrition on social media. They’re pretty much everywhere, and if you’ve enjoyed this episode remember to subscribe to the Healthpreneur podcast on iTunes. Many more amazing interviews coming your way. If you’ve enjoyed the interviews that we’ve had, if you’ve enjoyed the solo rounds, if you’ve enjoyed the result coach sessions, hey this is just the beginning.

This is actually a pretty exciting time because we are what, we’re … Beginning of December, and we officially started this podcast last September, so we’re now what? 14 months into it, and it’s actually pretty cool to see how this thing is starting to take off. So I’ll keep you posted with some stats, and maybe I’ll share some of our stats in the beginning of January to kind of give you a sense of how our podcast has done from a traffic and download perspective. But in the meantime you’ve got to subscribe otherwise you’re going to miss that episode.

So Healthpreneur podcast on iTunes. While you’re there if you’ve enjoyed this, leave a five star rating or review. And for now have an amazing rest of your day, have a great weekend. I look forward to seeing you on Monday and continue to be great and do great.

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