Welcome back, and wherever you might be on this wonderful day, once again, I hope all is going your way and is an oil is absolutely superb in your neck of the woods. So let's rock and roll. Now, as I mentioned in the first module, we're going to be introducing and defining accurately new terms and words in thought engineering. And this module today is one of those. Now, a big component of thought engineering is quality. Obviously, that's what today is about.

And in thorough engineering unless something is operationally defined, it doesn't actually exist, because unless it's operationally defined, every individual everyone is working on their own their own idea or their own perception of what something is. So what that means is We need to define it so that we all have a fixed and consistent understanding of what it is that we're discussing or working on. Now. Most people would say that they they know quality when they see it or feel it, and you're probably the same. But that's not a fixed and consistent definition that puts us all on the same page now is it so let's define it with absolute clarity now, so we're all working in work in the same place. Now, according to Dr. Deming, qualities is defined by the customer, not by you, quality is defined by the customer as and there's a maximum and a minimum.

So we have we have a maximum and a minimum. So what is That that you want your customers. What is it that we generally strive for in business when we transact with our customers? We want maximum customer. What? Now, when I teach this in live seminars, I always get the answer, satisfaction.

We want maximum customer satisfaction, correct. That's what we aim for, because we want our customers to be satisfied yet. But let me ask you a question. Is there a difference between satisfaction and appreciation? Well, obviously they're different words. But let me give you an example to illustrate this ID.

Now one of my mentors shared this with me this example with me once upon a time so I can't claim credit for it but I use it because it paints such a crystal clear picture of the differences here. And I love the example because it always makes me laugh and I hope it does you as well. Imagine you jumped into bed with the respective other half and you put in the greatest Performance you've ever delivered. You roll over and say, oh, my goodness, that was incredible. How was it for you? And they looked over and said back, yeah, it was satisfactory.

Now, I know that sounds a little funny. But it wouldn't impress you now, would it? But if they rolled over and or looked at you and said, Wow, that was incredible. I'm really I really appreciate it that is there a difference? Of course series. All over the world.

There are companies that survey customers focused on measuring customer satisfaction, and then they deliver a cat Satisfaction Index of some kind or another for the businesses. The problem is, what's the fundamental issue with satisfaction? The fundamental issue is that people defect, they leave, they go elsewhere. satisfied customers don't stay in place. With your business, what you want is raving, raving loyal fans. loyalty is the ultimate goal.

Now many business owners when I share this with them say yeah, I know I know that what I want is raving loyal fans. But when I asked them why never did they truly understand the actual reason, the driving force of why you want this and and with almost everything that human beings do in life until they understand the why really do they embody the action? That's why I spend so much time you'll see in this course in every course and seminar that I run in explaining the why because I know that unless you truly comprehend the underlying why you won't body the action. You're so your time to learning and my time teaching will have just been wasted. Anyway, back to the question. So why do you want raving load feigns what's the why.

It's because loyalty produces predictable behavior. loyal customers return. loyal customers want to transact with you again and again. loyal customers will send you their friends and family to transact with you. loyal customers will that will give you feedback and they will help you develop new products, and then they'll buy them from you when you do. And when you do stuff up loyal customers will tell you and allow you an opportunity to fix it.

And loyal customers will do all of this predictably. satisfaction doesn't create loyalty. Last year, I believe it was the JD Power satisfaction survey in the US that detail that 55% of customers who defected or went to a new supplier or another supplier, were actually satisfied 55% we're actually satisfied with the product or service that they received, but they left anyway. So if we're looking for predictability, which we are satisfaction doesn't give you any predictive value and creating loyalty. Yet for most business owners, they, they focus the theory, even if they're not consciously aware of it is on developing satisfied customers, but they aiming for the wrong target. The theory of satisfied customers is flawed.

So the first component of quality and what you need to immediately readjust your focus on or from is from customer satisfaction to developing maximum customer appreciation. Now, the whole point here is this if you're measuring satisfaction or aiming for sex satisfaction, and let's be honest for a moment, most businesses aim for a transaction not aiming satisfaction. But if you're measuring or aiming for satisfaction, and your competitors, measuring or aiming for appreciation, when are you going to catch up? And the answer is never you And how are you gonna compete, let alone thrive and build abundance prosperity and freedom. You're not, you can't, because you're simply not even in the same ballpark. And, and this is where this is where a satisfactory business, satisfactory business syndrome has its foundations because business owners are operating in making decisions based on knowledge in theory that is flawed, even though it seems perfectly logical and perfectly race rational based on the knowledge that they've had access to.

As a result, they end up stuck in the cycle of being overworked and underpaid, and fundamentally unhappy and unfulfilled because their lives are controlled by the underperforming and unpredictable businesses. Mostly businesses invest incredible amounts of money in in getting customers and invest little of anything in developing appreciative customers that they can keep and predictably rely on to transact again and again. And again. Aiming for satisfied customers is like mining for cubic zirconia. In a valley filled with diamonds, you don't want satisfied customers, you want customers who was so appreciative of the service and the goods and the experience that you provide, that they not only want to engage and transact with you again and again and again. But they are compelled to tell everyone they know about the services and products that you provide.

And if you do screw up, if you do make a mistake, they happen to provide you the opportunity to fix it. So you get to still keep them as a customer. And, look, achieving this is relatively simple. It's just a matter of of adjusting the theory that you're working with. Now, the goal here is this, that what you're learning here, less than half of 1% of the population are even aware of it, let alone practice it effectively. Go and ask 10 people in business, what is it that they aim for with their customers or what they want their customers to feel after a transaction?

Ask them the question. You want your customers to have maximum walk, and don't answer it for them, let them answer it. You'll struggle to find anyone who answers with anything other than the word satisfaction. So the opportunity to get above the pack and dominate your market is absolutely unlimited. There is no ceiling to the upside of this once you embody the principle in my bestseller, think unlock the secrets of a super business. I discuss the following in detail but I'm just going to give you a very short version of this story he can really understand it now.

Not long after the GFC I shimmy No, that is I looked at actually selling my finance company. Industry parameters had, let's just say tightened as you can probably imagine during that time, and getting a good price for finance company was not easy. The average purchase price that was being offered for finance company at the time was somewhere between 1.3 and 2.1 times the trial book value, excluding obviously any tangible assets on the balance sheet that you set those aside. So, for example, if your trial book was generating a million dollars per annum, brokers were paying between 1.3 million if your business was mediocre, and 2.1 million if it was absolutely exceptional to buy. So I marketed the company myself to a shortlist of companies who I knew would be interested in it and are Received offers from six of the nine potential buyers that I put it out to.

Now, three of the highest offers I received were 5.4 times 5.8 and 5.9 times the book value. So I was offered almost three times the average sale price for an exceptional business in the industry. But why? Why was I offered such a premium? Well, there's a number of reasons why I was offered such a premium for the for the business but the main ones with ease. The business possessed a vast Bank of appreciative loyal customers because of the way that we interacted, engaged and treated them.

We, we didn't have competitors because no one in the industry was going for appreciation. We were out on their own. Our customer retention was not only off the charts, but those customers fed us a cascading wall. four new customers that came flowing into the business every single month. And I could show through measure data that this was in fact, a predictable reality. This impacted on the prosperity potential, or the growth rate of the business with very little investment required to achieve that goal.

So from an acquiring commercial perspective, the risk level of buying the business was incredibly low, because revenue streams into the business had an incredibly high level of predictability, reliability and steady growth now. So my company's focus on delivering extreme value and deliver and developing appreciative customers meant that every month our bank of customers grew. Not only that, but the Bank of customers sending us more customers grew, it became an exponential equation. Now, let me ask ask you. Do you think investing in such a structure that delivers that kind of predictable result increased or decreased my levels of confidence and certainty? Do you think knowing that my customer base and profitability was predictably growing month on month made me more or less stressed, or made me more or less likely to invest in the expansion and security of that business?

Now, obviously, they're rhetorical questions. But the point here is this, that but none of that would have been achievable if I had been focused on satisfaction. So the top half of the equation of quality is maximum customer appreciation. So what's the bottom half? All right. So the bottom half of the equation, what do you think the minimum side is?

What do you think it could be? Everybody should learn to spell my name is teacher would be sort of proud anyway. What we want to do, it's variation by the way. What we want to do is we want to minimize the variation in our product delivery. Why? Because we want our product or service delivery to be consistent and predictable.

You may recall I mentioned in I think it was module two, that human beings are naturally comfortable around and they gravitate towards consistency. Excuse me. Human beings inherently don't like change. You may also Recall that I mentioned that the optimal method for production in anything is to use the existing reality. So don't try and fight the existing reality work with it. Now, think of it this way.

Do you drink coffee? Now, if you don't, because I don't, I'm sure you will still understand this example because we all have that special friend who is an absolute coffee connoisseur. But anyway, think of where you go and get your coffee every day. Now, do you go there because the coffee is different every time you order, or do you go there because they make coffee exactly as you like. And it's the same way every single time. I would hazard a guess that it's because the variation in the production of your coffee is minimal.

And you like that consistency. Another list we'll call it culture and others cultured example of this is McDonald's. Why do customers keep going back to McDonald's? Think about it. Is it the quality of their food? debatable, we won't go there.

Or is it the fact that when you go to McDonald's, in any country, anywhere in the world, the variation in the product is almost non existent. You can buy a cheeseburger in North America, in Germany, in in Australia, or in China, and it will be basically identical. There is no variation in the product. And when you walk in the doors of a McDonald's store, you have trust, faith and confidence that you will get exactly what you want. Correct. And you like that consistency, as everybody does, and I apologize if you don't eat ate McDonald's, but I'm sure you can still understand the point I'm illustrating So what you want to do, what we all want to do in our businesses is we want to minimize variation in your product delivery.

So your customers know what they are getting every single time. So you can, I mean, you can surprise and delight them with extra service and bonuses or whatever you want to do. But being predictable, but by being predictable, I should say, your customers faith, confidence and trust in us skyrockets, and what's the basis of any healthy relationship? Trust? Just ask yourself, would you refer a friend or a family member to a product or service that was unpredictable in its delivery, that every time you bought the product or service that one day was great, and the next day it was average, or that it was different one day from the next. Now you wouldn't because when you refer some to anything, whose reputation are you putting on the line?

Yours, and the same goes for your customers. Now, where is the only place that perfect is found in the dictionary, right? So you're never going to get zero variation, you're not going to get to that point. But that doesn't mean we don't strive for it. And that doesn't mean we we shouldn't measure against it. So we don't go for 80% we always go for perfect.

That way, we're always improving and staying ahead of the game, because improvement, it's a never ending process. improvement is the breakfast of champions. And improvement is not a it's not a destination. It's a journey with no finish line. This is how we stay ahead of the game. Remember, every single thing speaks.

So quality is defined by the customer, as maximum customer appreciation over minimum variation. Because at the level of appreciation, our customers behavior becomes predictable. And with minimum variation, we're able to build trust as the dominant supplier of our good or service in our market. Together, we begin the process of customer banking. You must create appreciative customers and measure against this parameter. You must educate and train this, this principle into your teams so they can think, act and interact in terms of appreciation and minimizing variation so that you can become the only option for your customers.

Train yourself and your staff to think and operate in terms of this principle. And I guarantee you, your business will go through through the roof. Okay. So please sit back and take a breath, because that content was pretty heavy. What we just covered is so important that I suggest you possibly go back and listen to this module. Again, go over your notes, listen to it two or three times, there's incredible gold in this particular module.

And freedom begins really begins in this module in your business. But before you do that, just close your eyes for a moment, just allow it the opportunity to sink in and integrate. We introduced two new words into this module, appreciation and variation. And while you may have heard these words before, you may not have heard them in the context in the specific context that we've used in here. So if it's a little unclear, please relax. We'll cover much more on this as we go on and it will all start To clarify and tie in with the rest of the program.

So just take a breath, relax, rewatch this program again and just allow this knowledge to sink in and integrate with where you are at this point in time. In module six, we're really going to prime the rest of this course and outline the most critical role that you as a leader are responsible for. So be prepared for that one. Until we meet again in the next module, please basically, think clearly, and have an absolutely incredible day. Thanks for your time.