Key performance indicators give you a roadmap of where you are and where you want to be. Victoria Wieck introduces Jeff Smith, an International Keynote Speaker, World-Renowned KPI Expert, and #1 Best-Selling Author. Jeff talks with Victoria about how key performance indicators are questions rather than answers. One key performance indicator is, what do you want? Successful people have specific goals they want to achieve. Working hard is not enough if you don’t know which direction to channel it through. Listen to this episode to discover more key performance indicators!
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Key Performance Indicators That Make Successful People With Jeff Smith
We have a real treat. I have an amazing guest. His name is Jeff Smith. We do a lot of transformation stories here, but his transformation story is amazing, nothing short of astonishing. Jeff failed in Math and English and didn’t have a lot going on at that time, but he’s currently living the dream life that he envisioned living at some point.
We’re going to talk about how he accomplished that and specifically his expertise in helping small businesswomen. Anybody who’s in small business who wants to elevate their business, who wants to bring visibility, awareness and increase your effectiveness working fewer hours and making more money. Stay tuned. I’m going to ask Jeff to talk about his life a little bit because I have a feeling that he can tell it better than I can. He’s a lot more to than I am. Welcome to the show, Jeff.
Victoria, thank you so much. You’ve given me a lot to live up to there, haven’t you?
Tell my audience a little bit about your background story. We’re going to unpeel and unpack the rich life story you have to offer to my audience.
I had a wonderful childhood. I was loved. We didn’t have any money. I won’t say poor because that’s a state of mind. We’re broke. That’s a state of pocket. I didn’t know blissfully. University was never on the radar. My parents were not mentors. I was allowed to be lazy. My passion when I was younger from about eight years old, I was a musician. That’s all I wanted to do. I was a keyboard player. I had no interest in English, Mathematics or anything at school. I wanted that bell to ring, go home and play music. That was it. I did okay at school, but I failed in English and in Mathematics.
You are British. How could you fail in English? Is that even allowed?
I can speak English. I failed at English. I failed at Mathematics. Here I sit, having written the best-selling book in the world on Mathematics, which is fascinating. How does that happen?
The KPI Book, Third Edition: “The ultimate guide to understanding the key performance indicators of your business” – https://jeff-smith.com/the-kpi-book-third-edition/
Let’s go back to that a little bit. I feel the year 2022 is an incredible year for many of you. You can rise to the top. This is an opportunity because, with massive changes, social change, financial change and political change come wrapped with incredible opportunities. This is why I have Jeff here. The point you’re trying to make is that no matter where you come from, no matter what economic status, social stratosphere you come from, you can accomplish anything.
First of all, you failed in Math and English. You could maybe be a great archeologist or musician. You went to writing a book about KPI. We’ll talk about KPI or key performance index and how critical it is for all of you running businesses. This is the one thing that a lot of people don’t talk about. We talk about marketing. We talk about digital marketing. We talk about social media.
People talk about all of these things to death. Without a measuring stick or a goal from the beginning, you don’t know. You’re wasting money and, more importantly, time. Let’s talk a little bit about how you came about discovering the importance of KPI. What is KPI? Can you explain a little bit for people who never heard the term before?
KPI means key performance indicators. What’s fascinating about them? We live in a world where everything is being measured with key performance indicators. You sit in your car, you look at the dashboard and they’re all key performance indicators. They’re everywhere. We rarely recognize them as such. KPI, key performance indicators, are predominantly recognized in business to give a roadmap from where you are to where you want to be. That’s what they’re for. There are lots of different measures in our life, wholly dependent upon what it is that we want to achieve.
If you want to know a little bit more about key performance indicators, it’s not like one thing. Everybody’s going to have different key performance indicators. Many of you are going to have different key performance indicators based on the particular ad. You might want to have different goals or different expectations, for example. If you want to get more information and get into this, you can visit Jeff’s website. He has a lot of information on this. Most of what he has there is free and it’s amazing information. It’s Jeff-Smith.com. You can check that out. Let’s move on a little bit.
Lots of people say, “Anybody can do anything. Fulfill your potential.” Yes, providing you have the right direction. More speed in the wrong direction doesn’t help. I found this out when I was eighteen, which is a long time ago. I decided to study what is it that makes successful people successful? I attributed to being millionaires. Being successful is not always about money. Money generally follows. We have callings, passion and these kinds of things.
I interviewed 325 millionaires on my journey. I found out they all do elven things in common. Some are aware of these eleven things, some are not, and it is quite fascinating. Going back to what you also said earlier is about having goals. The thing about goals is they have to be very specific. That’s where we can use key performance indicators as well. It keeps your eyes on the prize, if you will. You can work hard, but the direction must be in your chosen direction of travel. You don’t work hard in any direction. It’s about being specific.
You can work hard, but you must have a direction according to your goals.
I was talking to a lady about this. She ended up in tears. She’d written a book, and it wasn’t selling. I said, “What was your goal?” She said, “My goal was to write a book.” I said, “Your goal was fulfilled.” She was passionate about writing a book. Her goal was to write a book. I said, “Your goal wasn’t about providing transformational change to other people that would want them to buy your book. Your goal was about writing a book.” She was amazed and tears came into her eyes.
You have to be specific. If you want to grow a business, you also have to be specific. Successful business strategies are about sustainability. Can you keep on doing what you’re doing? It’s no good putting a lot of effort into something once or twice. That’s where key performance indicators help us. It gives us direction, sustainability, and a sanity check to make sure that we are obtaining what it is that we want to obtain.
I’m going to break this down into a language that I can understand. If you get in your car and you say to yourself, “I’m going to start driving. I want to travel.” Where you’re going to travel to? I don’t know. Someplace on the East Coast and you don’t have a GPS. You don’t have a specific destination. Therefore, you don’t know where you’re going to stay. You can’t go to New York in a car in a day. You don’t know how much gas you’re going to need. You can be taking a lot of detours.
Having key performance indicators is like having a GPS and a goal at the other end. It’s, “How fast can I get there?” Is it sustainable if you drive 90 miles an hour for 12 hours? It’s not sustainable if you’re going to crash. I completely understand that. I understand that everybody has different key performance indicators, but for small business entrepreneurs who are doing anywhere from 6 to 7 figures. What are some of the key performance indicators they should be looking for?
That’s a fascinating question. That’s the second most popular question. The most popular one is, “What are the top ten key performance indicators?” They touch upon each other. Here’s the fascinating thing. This is what I find when I speak to business people. You imagine where you were a few years ago, your state of development, and the state of your company at that time. Your dreams and aspiration years ago would’ve mapped out your future. You would’ve put together the key performance indicators that were right for that journey. That could be profitability and all kinds of things.
You would have your KPI dashboard. Move it forward five years. Are your goals and aspirations the same as they were five years ago? Probably not. Probably your beliefs have changed. You’ve transformed into something else, someone else. Your skills are better. You want slightly different things. Therefore, the key performance indicators you have will change. Here’s the big mistake that lots of business people make, they keep the same set of key performance indicators forever.
To give you an example of my journey, I completely agree with you. Your goals change. For example, when I first started my company, I didn’t have any money. I would say no money because it was under $1,000. I didn’t have any money. What are the things that I could do to keep track of? In those days, we didn’t have email because this was 1989. I wrote these direct mail letters. We didn’t have personal computers either back then. I typed them on my typewriter. I sent out 50 letters every single day.
Key Performance Indicator: The key performance indicators you have will change, so don’t keep the same set of key performance indicators forever.
I was hoping to get some traction, and that, for me, was 10% people saying yes or no response rate and the quality of the response. Looking at a response rate, a lot of times, they’re like, “We don’t need you,” so it’s a yes, no or maybe. I had these little goals there. You still had profitability goals. My goal at that time was making $2,000 a month. If I get many people coming back, how many people do I need to convert into customers and what does an average sale need to be?
I was tracking pretty well. My goal was $2,000 a month. If I could hit it out of the park and make $3,000 a month, I could maybe save money to buy a new car. That was my goal. I ended up doing over $1 million in that first eighteen months. The goals changed because, at that point, my performance indicators were not about getting more consumers to buy. It was more business to consumers because I needed to save time. I wanted to be at home with my kids. The metrics changed.
What I try to tell a lot of beginner entrepreneurs is that when you place your Facebook ads, when you place whatever marketing effort you have, make sure you understand why you’re doing that. As you said the lady with the book, said her goal was to write a book because she wanted to be a writer, not to help other people or add value to somebody else’s life. The way to do that was to write a book about X, Y, Z for certain people. That would’ve been the performance indicator. That would’ve helped her write a better and more targeted book for that audience.
There are some key performance indicators. The amount of money will change. A lot of the audience here are somewhat successful in sustaining their businesses for 5, 10 or 15 years. They’re consistently doing the 6 to 7 figures but they hustled. They out networked everybody, they worked hard. Understanding key performance indicators will help you work fewer hours and amplify your message faster because you’re going to be focused. Would that be correct?
Yes. The thing that’s common is not the key performance indicator themselves. It’s how you think about them. This is the transformation that I want to bring to you. Most people think that key performance indicators are answers. They’re not. They’re questions. Let me explain how we can use them to make transformational change. Let me use the example that you gave earlier. When you started, you sent out 50 letters every day, typing.
I became a very good typist.
You said your expectation there was to have 10% responses, so 10% of 50 is 5. The reason we have key performance indicators and how we make transformational change is to turn them into a question and say, “If I did type up 50 letters per day, and I am getting 10% response which is 5, what do I need to do to change that to 11%, 12% or 15% response? What are other people doing to achieve that?”
Every successful person knows exactly what they want.
It could be the style of writing. It could be the qualification of the people that you send it to. The key performance indicates, which is a 10% closing ratio, the response rate is a question of your activities. That’s what they’re for. You can use this with your jewelry. If we are looking at gross profits, if we buy something for $10 and sell it for $15, our gross profit is 33%.
The question then is, “To change my gross profit, I either have to change the buying price or the selling price. How do I do that?” Key performance indicators are about questioning the things that are important to you and then looking closely at the actions that you are taking in those areas. Can you make those actions sustainable?
We’re on the same wavelength here. It’s interesting because I expected five and I wrote these letters. I got somewhere between 10% to 20% response rate in response, not buying yet at that point. I wrote to them. I didn’t have a brochure or a website. I didn’t have anything because nobody had websites back then. Expensive catalogs were how people did business.
That was not an option for me because mailing a catalog was $3, and the regular first-class postage stamp was $0.09. Printing those catalogs was somewhere north of $25,000 every 6 months and I didn’t have that either. I had to work with a lower budget. Everything you said is true about when you increase your business. If you do it by lowering your prices, your profit margin goes down. While you are increasing your revenue, you might be making less money. You do have to keep that.
I would say your key performance indicators are not necessarily answers. Looking at them, understanding them crystal clear, they become a bunch of tools that you could use to get yourself focused on every effort you make, every dollar you spend to do it with the purpose and with the plan. That’s important.
I have an MBA. I went through a fabulous school. I went under a scholarship, and I did well. They teach you a lot of things about marketing campaigns. You may be reaching a whole different audience than you thought you were. When they come in to get the freebie or whatever you’re doing, it’s the wrong target audience. Your conversion may flow, or sometimes you do convert, but then you lose those customers. A new customer acquisition price at that point becomes very expensive.
Understand why you’re doing what you’re doing and think about your goals, the purpose for it and your mission for everything you do before. When you write down your key performance indicators or your goals for everything you do, it becomes easier to come up with your marketing campaigns. A lot of the people running these small businesses are scratching the surface of seven figures, or maybe mid-seven figures.
Key Performance Indicator: Key performance indicators are about questioning the things that are important to you.
They’re busy people. They don’t want to spend the time to understand. They don’t think they’re going to learn how to do the SEO, do the KPI, and do any of this stuff on their own. They hire people. No matter who you hire, understanding this will help you even hire the right people. The world is full of people who provide services never done before. We’re full of coaches that never ran a business, which I find odd. Anything else you want to add to that?
You made a great point earlier about the lady writing a book and what you thought. You’ve written a book, haven’t you? It’s more than one book, haven’t you?
I have.
I’m often asked how is it I’m successful with selling books. It’s because I do it the opposite way to anybody else that I know. If we think about goals and aspirations, if I work with people to help them get their mindset right for writing the book, and I don’t have anything to do with the book’s writing, that’s your job. First, I’d say prepare and put the advertisement together for your book. Sell it before you write a single word. I spent three months putting an advertisement together for this book that I had not written a word for. I showed it to other people. They were going, “I want this book.” When I was writing that advertisement, all the things in it were my roadmap for writing the book.
That is so profound. I read an article about a guy teaching golf for young children. He was a volunteer coach in the summer. Instead of taking the kids out on the driving range to hit the balls, teach them how to swing and all this stuff. He tells them, “Don’t worry about hitting the ball and any of this.” He starts them on the putting green because he says, “You’re going to do 2, 3, 4 shots to get to the green, but if you 3-putt it, you’ve got 18 holes. You’re getting somewhere between 55 and 60 strokes there.” That kills you. He understands the goal, and he is starting from the putting green. He said, “These kids have to learn how to putt before they learn how to hit the ball.”
I give speeches and hold these free workshops. A lady told me that she’s an aspirational, emotional and mental health coach, but she also does corporate financial advice and teaches financial literacy. I asked her, “If you were going to do a webinar tomorrow and you have to place a Facebook ad, what would that Facebook ad say?” She had trouble articulating what it would say because there were three different things that she was trying to accomplish.
I would say that doing the ad ahead of time and before we went on air, we talked about my book. I had the book all written. I knew what I wanted to give in terms of the value. It’s called Million Dollar Passion, the same name as this show. I wrote a simple seven-step book on how you can turn your passion and purpose into a dream business. I well overachieved my life dreams years ago.
Failure does not mean the end because failure gives great lessons in success.
When COVID hit, it’s not that difficult. What I’ve done wasn’t that difficult. It’s completely possible, and I want to share that. When I asked for feedback from agents, a lot of the agents told me, “You’re going to need to add you’ve had this incredible business, and you’ve dealt with everybody from all the different businesses.” I’ve done business with Delta Airlines, British Airways, all the duty-free people, and cruise ship people.
I’ve done business with Harrods. He said, “One of the things that would be natural to you would be negotiating skills.” I’ve done it without any lawyers. I go, “Yeah.” There was no chapter in that. They’ve made it infinitely better by adding and all that. I agree with you. You start from the end, your goal, and what you hope to accomplish. You got to start from there. These were great, valuable lessons. Tell me a little bit about your eleven steps to success. Give us maybe the top three you think are most important for my audience.
I’ll give you the first three because they’re sequential. Most people have difficulty doing what they want. What do you want? Most people don’t know what they want. I speak at conferences all over the world. I get people on stage. I’ll say, “What do you want?” Some people say, “More money.” I put my hand in my pocket, give them a dollar bill, and I go, “There you are. Your dreams are fulfilled.” They go, “No, I want more money than that.” I said, “All you asked for was more money.” You have to be specific. Every successful person I’ve interviewed knows exactly what they want. It doesn’t happen by accident. If you can nail that, then the rest is relatively easy.
What’s step two?
Step two, write it down with clarity. You would’ve written it down somewhere what you wanted to achieve. We’ve spoken about books, but it doesn’t matter about whether you want to write. If you want to write a book, that’s great. If you are the inventor of a new product, you want to buy and sell a new product or you want to buy and sell your services. Write the advertisement first and let that be the guide your new product.
I had a guy come to me with a book. He wanted me to help him to understand how to sell it. This will put things into context for everything we’ve said so far. I told him, “Can I see the advertisement for your book, please?” He’d written his book. It’s printed. It’s in his hand. He’s given me a copy. I said, “Can I see an advertisement for your book before I read it?”
He says, “I haven’t done an advertisement yet. I came to you for some help and guidance.” Here’s what I said, “You have a product that you wanted to create. You’ve written a book that you wanted to write, not necessarily what people wanted to buy.” Do you understand the difference there? Successful people understand what people want to buy, and they create it.
Key Performance Indicator: We don’t work for money. We work for what money does for us.
We have time for one more, step three.
Step three, review, react, revise. Know what you want. Write it down, but it’s not written in stone. You will take some actions, and then you might think, “Some things work. Some things don’t work. I need to change, revise, react. I need to be flexible on this.” Failure does not mean the end because failures are great lessons in success. You never fail unless you don’t get up again. Every time you fall over, make sure you pick up something.
At the beginning of this interview, you said that you interviewed all these people and successful people have these eleven steps to success. Some people know what they’re doing. They do this consciously. Some people don’t know what they’re doing, but they do it anyway. It’s interesting because the top three things you said are exactly what I have done. I do a lot of speeches. I try to help other women succeed because I feel women, females, moms and business moms have an extra challenge. That’s exactly what I preach.
I didn’t have any money. I knew what I wanted, and you are right. It doesn’t have to do with money. When I immigrated to America with my parents, I was the oldest child of the five. I was only thirteen. My parents both worked two jobs, seven days a week. I helped raise my younger siblings. I almost never saw my parents. I didn’t have a whole lot of quality time with them. They didn’t speak English. They couldn’t help me with my homework. I had to grow up by myself. When I became an adult, I decided that’s the one thing that I was not going to deprive my children of.
We talked about my goal is $2,000 a month. That’s to sustain me. The true goal was to spend unlimited time with my children. I built my whole business around their schedule. This is why I ended up with businesses in England. I sold to Harrods, Marks & Spencer, all these companies because I had to work in the Pacific time zone. At 6:00 in the morning is at midday for you, guys. I had to work from 6:00 to 8:00 AM before my kids went to school. For Asia, I sold to Takashimaya and all the major stores. 5:00 PM LA time was 9:00 AM their time. I worked these extreme shifts.
That was my goal and how I got there. I wrote my goals down. My husband was also broke at the time. We had like two match sticks between the two of us. I said, “One day if I’m successful, I’m going to forget where I started. When life gets rough, I’m going to have to remind myself that my goal was to make $2,000 a month.” When I’m making $6,000 a month, I’m complaining and things aren’t going well, I have to go back and say, “I’ve overachieved my goal by 200% to 300%. What am I complaining about?”
In terms of business, I’m a huge believer in learning how to crawl, walk and run. I try to tell people, “Test your product, tweak and test some more. Get your 80/20 rule, get the 20% best performance and get 20% out of the 20. You’re looking at the top four percent.” This is why the conversion rate was pretty high for me the whole time. Your top three are right on the money. I’ve done those three things pretty much throughout my life. My numbers have changed, but that is something that I can attest to the fact that it works.
Surround yourself with the right people who share your passion so you can get off the ground.
I’m going to give a painful one. Here’s one of the eleven steps. You must surround yourself with the right people. Some people do all of the ten steps, but this one will cause you to fail. If you don’t have the right people surrounding you, if they don’t share your passion, especially the people you live with, you’ll never get off the ground. If you do, it’s always going to be a fight. It’s always going to be a struggle.
I agree with you on that, too. Even if somehow how you get ahead in life, let’s say you had to look the other way for this. “I’m not cheating. The guy’s a little sleazy.” If you have to question this at the end of your journey, when you’re looking back and say, “I created this amazing business,” you want to feel good about that. You don’t want to have to go back and say, “I screwed over some people. I watched my partner screw some people over, but that’s part of doing business.”
I don’t think I could live with that. Either you build it for the right reasons, never bending on some of those issues, or you don’t have a business. You’re one disaster away from never getting up again. When my kids were younger, I used to tell my kids, “Compared to where I am from, you have everything a child could want.” We are living in America, one of the best places where no matter where you’re from, in terms of economic opportunities, you feel everything is possible. The only way you’re going to get in big trouble for life is when you get into big trouble and you never get up is if you surround yourself with the wrong set of friends.
That’s why I was there. I was the mom who drove the field trip cars. I volunteered in their school classroom to keep an eye on them. Of all the tips you gave, for me, that strikes a real chord because of all the other things you can recover from. I wish all of you would visit his website to get immersed in building a business.
Hopefully, you can build a nice little empire that you can hang onto. You could have a legacy from it. You can help other human beings. With a little bit of money, you can impact everything more. You can volunteer. You could help your family, yourself, your community and your world in very small ways, by very important ways, by building your passion, turning your passion and purpose into an amazing business that you could be proud of.
Jeff and I can both say that we’re living our dream life. That doesn’t mean we’re billionaires sitting here with our own jets. My dream life is to spend all the time in the world with my family, my children and my mom. My mom still doesn’t speak a lot of great English. She came here when she was a fully grown adult. My father is no longer alive. It’s spending all that unlimited time and being able to afford that.
I’m not a huge person on monetarily being successful, but having the health and the personal relationships and spending that time with them was my goal. That’s my dream life and I’m living that. Times are changing. I pitch a TV-radio segment on how to make money without trying. It’s like how to make money without trying to make money. If you do all these other things, the money will come. Do you have any last advice you want to leave my audience with as we close this interview?
I have two very short ones. We don’t work for money. We work for what money does for us. Money shouldn’t be the goal. It’s what you’re going to do with the money. As a closing thing, what I’d like to say is we live in a world where everything is being measured. Take care to measure the right things in the right way.
For people who want to connect with you, where would my audience find more of you and get to know you?
It’s Jeff-Smith.com/Chat. You can go there, or you can go to the website, Speak With Jeff. There’s my calendar there. You choose a time, and then we can hook up on Zoom or Teams and have an informal chat. Let’s see if I can help you.
Thank you so much for coming. Thank you so much for reading this episode. If you haven’t done it already, please share. Don’t forget to leave a review and rate the show because that’s how I get feedback. I’m not asking for anybody to give me a great review. I’m asking you to be honest and give me honest feedback. That’s how we grow, as painful as it may be. Until next time, I wish health and happiness for you and your family. Thank you, Jeff, for coming.
I feel blessed. Thank you, Victoria.
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About Jeff Smith
Jeff Smith is on record as the most successful author of all time on KPI and Business Strategy.