How to Create Raving Fans for Your Business - Fastlane Founders with John T. Hewitt - Fastlane Founders and Legacy with Jason Barnard

John T. Hewitt talks with Jason Barnard about how to create raving fans for your business.

John T. Hewitt is the founder of Liberty Tax Service and CEO of Loyalty Brands, an innovative umbrella franchise organization that oversees multiple franchise concepts. Drawing from his 55 years of experience building billion-dollar companies, John reveals why traditional customer satisfaction isn’t enough and how to transform customers into raving fans.

He emphasizes the importance of creating “raving fans” over just satisfied customers. Hewitt talks about his unique approach to measuring customer satisfaction and the practical steps his companies take, such as personally calling clients for feedback and referrals.

He also shares strategies behind retaining customers and ensuring they refer others, ultimately emphasizing the personal touch and customization in client interactions. This episode shows business leaders how to build sustainable growth through outstanding service and strategic customer engagement.

What you’ll learn from John T. Hewitt

00:00 John T. Hewitt and Jason Barnard
01:29 John T. Hewitt’s Brand SERP
02:08 How Does John T. Hewitt Pay Attention to How He Appears on Google and AI?
02:25 What Is One of John T. Hewitt’s Major Weaknesses?
03:23 How Many Billion-Dollar Companies is John T. Hewitt on Now?
03:38 Why Does John T. Hewitt Value the Journey and Fun in His Entrepreneurial Approach?
04:02 How Long Did It Take John to Build His First Company, Which Was Sold for Half a Billion Dollars?
04:20 What is John T. Hewitt’s Philosophy?
05:20 How Do Raving Fans Work?
05:50 Why is it More Impactful to Create Raving Fans Than Satisfied Customers?
06:26 How Do You Determine the Success of Your Business?
07:21 How Does John T. Hewitt Measure Success in Meeting Customer Expectations?
08:04 What Does John T. Hewitt Realize About His Two Biggest Companies?
09:48 What are the Key Steps You Can Take With Your Clients to Ensure You Exceed Their Expectations?
10:28 Why Does John Emphasize Businesses That Deal With Public or Consumers Often Get Taken Advantage of?
11:00 What Initiative Did John T. Hewitt Implement When He Founded Jackson Hewitt?
11:53 How Did Sam Walton’s Customer-First Philosophy Create a Legacy of Exceptional Service?
13:19 How Do Successful Businesses Factor Customer Service Costs into Their Pricing Models?
13:31 How Can Tax Firms Balance Money-Back Guarantees with Profitable Pricing Strategies?
13:49 What is a Spoilage?
15:26 Why Do Some Customers Don’t Get a Refund?
16:59 What Criteria Does John Use to Evaluate the Difference Between a Satisfied Customer & a Raving Fan?
18:08 What Are the Strategies You Can Use to Turn Retained Clients Into Getting Them to Refer You?

This episode was recorded live on video January 7th 2025

Links to pieces of content relevant to this topic:
https://www.youtube.com/@loyaltybrands
John T. Hewitt

Transcript from How to Create Raving Fans for Your Business – Fastlane Founders with John T. Hewitt

[00:00:00] Narrator: Fastlane Founders and Legacy with Jason Barnard. Each week, Jason sits down with successful entrepreneurs, CEOs and executives and get them to share how they mastered the delicate balance between rapid growth and enduring success in the business world. How can we quickly build a profitable business that stands the test of time and becomes our legacy. A legacy we’re proud of.

Fastlane Founders and Legacy with Jason Barnard.

[00:00:31] Jason Barnard: Hi everybody and welcome to another Fastlane Founders and Legacy with me, Jason Barnard. And a quick hello and we’re good to go. Welcome to the show, John Hewitt.

[00:00:44] John Hewitt: Thank you. I didn’t know I had to sing to be on the show.

[00:00:47] Jason Barnard: You can sing if you want to, but it’s not an obligation.

[00:00:51] John Hewitt: I have just never sang a note on key. Probably is not going to happen.

[00:00:56] Jason Barnard: Well, sometimes people singing out of key is actually delightfully pleasant to listen to. My daughter had a friend who sang perfectly out of key and out of time. It was brilliant.

[00:01:08] John Hewitt: That takes a lot of skill, I guess.

[00:01:10] Jason Barnard: I think it does. One well, my ex wife played the role of a yellow koala in a cartoon. I was a blue dog in the cartoon and she mastered singing out of key and out of time just the right amount.

[00:01:22] John Hewitt: Sounds fun.

[00:01:24] Jason Barnard: Brilliant. So we’ll start off with your Brand SERP, as we always do. Looking here, we have, when we search your name with entrepreneur in brackets in order to get you to pop up, we have that beautiful Knowledge Panel, the thing in blue on the right hand side. Looking good with those two questions. Who started Jackson Hewitt Tax Service? And who started Liberty Tax? Google has obviously got a really good grip of you potentially thanks to the books, but also the Wikipedia page, which is hugely powerful but interestingly enough, no longer necessary. It used to be necessary to get a great Knowledge Panel to have a Wikipedia page and it isn’t anymore. Do you actually pay attention to how you appear on Google and in AI?

[00:02:09] John Hewitt: I have people that do that, yes.

[00:02:11] Jason Barnard: Right. Okay.

[00:02:12] John Hewitt: Yeah.

[00:02:13] Jason Barnard: It’s intentional.

[00:02:14] John Hewitt: Yeah. They say people with great strengths have great weaknesses. Peter Drucker, my favorite business author, says people with huge strengths have huge weaknesses and I have a bunch of huge strengths. That one of my huge weaknesses is lack of detail. So I hire people to do detail.

[00:02:34] Jason Barnard: Right. That’s actually kind of very interesting because managing a Brand SERP, managing that Knowledge Panel, managing how Google and AI understand you, is all about joining the dots and that means incredible attention to detail. And luckily we found Allyssa who runs the Kalicube Pro team. She is super, super, super detail focused and she gets it right every single time. So your team presumably the same. And I get you. When you’re dealing with billions of dollars, the individual dollars, I would assume, are details and don’t really matter. Is that a reasonable analogy?

[00:03:09] John Hewitt: Absolutely. It’s big picture. It’s all big picture with me.

[00:03:13] Jason Barnard: Oh, right. You can teach me lots about that. Because you’ve had multiple companies with billion dollars, and I’ve had one company that hasn’t hit a billion dollars yet.

[00:03:22] John Hewitt: Good. I’m on my third one, so they say third time’s the charm.

[00:03:28] Jason Barnard: Oh, brilliant. So this is your third one, and so far you were saying on one of your podcast appearances that you’re in it for the journey and the fun. Can you give me a quick rundown of that?

[00:03:38] John Hewitt: Yeah. When I was a kid, when I was in high school, I was cocky. I was just as confident as I am now, except where I didn’t have it. I hadn’t proven it. When you’re a teenager in high school, you haven’t proven it. And now I’ve proven it. But somehow I knew even though I was poor, I was going to be rich. And I thought I was naive and I thought I’d make a few million dollars and retire.

Well, the first company that I built that sold for half a billion dollars, it was a 15 year journey. And the treasure at the end of the rainbow is anticlimactic. And then what do you do? So I realized that the journey is the joy. And also my philosophy is, find something you love to do. Work hard, persevere. I believe that on Monday morning, if you’re not looking forward to where you’re going, you’re going to the wrong place. So with me, it’s thank God it’s Monday, not thank God it’s Friday. If you live in a thank God it’s Friday life, you’re living the wrong life.

[00:04:41] Jason Barnard: Right. Okay, super. Well, I’m living in the same life you are, which is, thank God it’s Monday. And every day for me is a delightful Monday where I’m kicking off with lots of exciting things to do. I love the idea. You wake up in the morning and you think, I’m ready to do it. In fact, even better than that, like a child, I go to bed and I can’t wait to wake up in the morning to get started.

[00:05:02] John Hewitt: It’s a Christmas morning, 52 weeks a year.

[00:05:07] Jason Barnard: How delightful. So we’re gonna talk about raving fans rather than just satisfied customers. Can you give me an overview of how that works and how it’s helped your career so far?

[00:05:20] John Hewitt: Yes. Stan Phelps one of my, another one of my famous favorite business authors wrote in one of his books, he said people don’t arrive at a meeting exactly on time. If the meeting is nine o’clock they arrive after nine or before nine Almost no one arrives exactly at nine o’clock And he said, and that’s the same way with customer satisfaction. He said, that you either exceed a customer’s expectation or you fail to meet it. Very seldom, it’s rare that you exactly meet a customer’s expectation. So we have a novel way of evaluating our organizations.

Our success is we know we can’t exceed a hundred percent of customers expectation, but we know that we can. If we do a great job, we can exceed most of their expectations. So we measure our success by creating raving fans exceeding people’s expectations. The percentage of people that we exceed expectations tells us what kind of job we’re doing.

[00:06:38] Jason Barnard: And how do you measure it?

[00:06:40] John Hewitt: There’s only one way you can measure it and almost no one does it. Everyone that I mean, often I’ll go on a podcast or I’ll buy something from Amazon or American Airlines or what I’ll get a survey and how do we do for you? And blah blah, blah. So some of it, most of it is by email. In the old days, 25 years ago, before email there 30 years ago, they would do it by snail mail and sometimes they would give you a card when you’re at the location. But we do it the only way you can, and that’s to hear it from the customer themselves. We call every customer, so it serves. We do that for several reasons, not just to measure how we’re doing, but what we’ve learned in those making those calls is that they appreciate the call and they appreciate someone asking them how did we do for you? And just that we care that we care enough to ask because no one, almost no other company’s doing it. So we’re not irritated.

We’re almost never irritate them because they’re not getting calls from other companies. So we’re unique. We care. What I’ve learned also, Jason, is that in my companies and my two biggest companies are tax preparation and dog grooming, the tax preparers and the dog groomers do not do a good job of asking for referrals. So this very personable person asked how we did, 95% of people said, wonderful, we loved it. And we have a very personable person ask for a referral. And so it, it’s, that’s how we measure it is a one on one conversation, quick conversation, three minutes, three to four minutes, and that then that tells us how we’re doing.

[00:08:46] Jason Barnard: And what are the key questions if you’re going to keep it down to three minutes? Obviously nobody wants to spend hours and hours talking to you about their experience with you. But how do you get the most information, the most feedback from those three minutes? What are the key questions?

[00:08:58] John Hewitt: I’d have to give you, I’d have to send you the whole. Remember we off, off line where earlier we said that or I started this with saying that people with great strengths have great detail, have, have great weaknesses. And I don’t pay attention to that detail. That’s, that’s a detail point that others take care of. I don’t, I don’t get down in the nitty gritty I get. I just look at the results.

[00:09:26] Jason Barnard: Right. Okay. Yeah. And now it shows. As an interviewer, I wasn’t paying attention because I should have realized that. But next question is what are the key steps that we can do with our clients or in terms of serving our clients to ensure that we get there? Because obviously along the way there are ways for us to find out whether or not we’re going to exceed expectations or not.

[00:09:48] John Hewitt: Yeah. It starts from the, the very basic of understanding customer service. And most CEOs, they don’t understand the importance of the customer. They don’t understand that without customers there doesn’t need to be a CEO, there doesn’t need to be a stockholder, there doesn’t need to be a board of directors, there doesn’t need to be an employee, that all of them are useless without customers. And so customers need to be put on a pedestal and we do things for them that, that others won’t. And because what happens when you, you’re in a service business, you’re or in any business that deals with the, with the public or the consumers with millions or thousands of consumers, you’re going to get taken advantage of. And so most businesses structure rules that they can’t be taken advantage of, that if you try to take advantage of me, you’re going to be punished. So like back when we first, when I was, when I founded Jackson Hewitt, we made a initiative that within three years we would have locations in Walmart.

And so I got to learn Walmart. And back in, 33 years ago when we, when I made my first visit to Walmart, they had a money back guarantee on anything. And then, and then Sam Walton died. He had died a couple years before then, but then it went, began to break down. And now on this item you could only get a one year warranty on. On this item you only got a one month warranty. On this item you only got a three month warranty. On some, you didn’t get any.

You just got zero warranty. And so when I first met the first Walmart employee, went on our journey to go into Walmart, we had lunch with a guy that there was one store locally here in Virginia beach, and this is 1993, and we took him to lunch and he wore a cardigan sweater. I think we were all suited up back then, back in the days where we all wore suits every day and now we never wear suits. But he told a story. He said a man came into a Walmart And he had this old Ben Franklin stove from the twenties, little stove, and it was all melted and burned. And he said, he went to the section where they sold those little stoves and the employees said, oh, just pick, just leave it here and take one. Just take whichever one you want. And so he said, and when the guy told the story, he said the employee was Mister Sam He didn’t even call him Sam Walton, he called him Mister Sam And I thought to myself, the manager of this store, this is the way he thought customers should be treated. So they’re going to be, that’s going to be creating raving fans, right? And the guy was clearly taking advantage of them. But you, build that into your price. You build in. If you’re gonna have a 3% loss, like in the tax preparation business, we have a money back guarantee and someone will, some people will complain just so they can get it for free.

But it’s only 3%. If all you do is raise your fee 3%, then it covers the cost of the losses. To me, it’s sort of like in a grocery store. I assume that when you buy apples, you expect some of them not to be sold, right? If you buy 2000 apples, then 1400 of them are going to be sold, or 17, you know, approximately. They’re not all going to be sold. So you build that into your price. It’s called spoilage. And so that’s how companies with raving fans with great service get higher, higher prices than their competitors.

And you build the rate, creating raving fans into the price.

[00:14:26] Jason Barnard: So in fact, it’s the idea of spoilage is actually creating raving fans. So it’s the other way around. But the idea of spoilage is a really lovely idea. And as you say, you know, 3% increase for the price for the 3% of people who are going to take advantage, let’s say, isn’t such a huge deal. And once you do have the raving fans, in fact, you can increase your prices by more than 3%, I would imagine.

[00:14:49] John Hewitt: Exactly. And so we’re about the highest in the industry because we have the best service. There is a situation in you’re not in the United States too, sounds like. So if your listeners are. They don’t understand income tax preparation, but in income tax preparation, occasionally about our customers don’t pay upfront. They have the money with held from their refund. And so week after they file, they get their refund and we take our share out of the refund. Well, some of them don’t get a refund.

They have back taxes or child support or student loans. And so that money reduces their tax refund to zero. So what we do automatically is we give that tax to them for free. We say, okay, you don’t have to pay us. Sorry, you didn’t get your refund, you don’t have to pay us. And so the others, they put it on as accounts receivable and they go chase them down, they’ll send them letters, get debt collectors, go after them for that money, and they’re losing a customer for life. And what I try to explain to my team, because it’s hard for them, everyone to do that. I said, you build it into the brain, right? You know, before the season start that 5% of the your customers are not gonna pay.

So if your average fee is gonna be $300, you just need to charge everyone 315. And know that 5% are going to get it for free. It’s already paid for. And that’s going to avoid conflict. You’re going to avoid people complaining about you, you’re going to avoid negative publicity, and it’s going to create raving fans.

[00:16:50] Jason Barnard: Right. Absolutely. And can you define for me the difference between a satisfied customer and a raving fan?

[00:16:59] John Hewitt: Again, there’s almost no satisfied customer. So I evaluate customers on two things. One is do you return and do you refer? When I’m grooming a dog, you would think your job is to groom that dog and to do a great job on making the dog look beautiful and so forth. But that’s not your real job. Your real job is to get that customer to come back and to refer. Your job is a retention and referral source, not a dog groomer.

[00:17:38] Jason Barnard: Okay. And so from Kalicube’s perspective, we’re definitely looking at retention and referral. We’ve mastered retention now, I think we’ve got a very good foundation for retaining clients. And now what we need to do is get them referring. And I think it’s that aspect of raving. What are the techniques we can use, what are the strategies we can use to turn the client we’ve retained into one who’s going to refer as a friend, an amplifier of what Kalicube is?

[00:18:08] John Hewitt: You remember, I’ve been doing this for 55 years. And so for the first, for about the first half of my career, I spent a lot of time on working with employees to help them do a better job of asking for referrals. And I implored them, I taught them, I explained the value to them, I trained them, I showed them. But at the end of the day, 25 or 30 years, somewhere between 25 and 30 years into my career, I had not done a, not even one fifth of my preparers were doing a good job of asking for referral. So the only way I’ve done it is by making that phone call afterwards. So two days there after they’re in, we make that phone call. And someone that only 5% of the population feels comfortable asking for a referral, 95% are, it’s just an uncomfortable feeling and they won’t do it. And even if they do it and mumble it, they don’t do it well.

So I take one of those extroverts that, you know the type of people, the crazies that don’t mind, they’re friendly to everyone, they be friendly to the queen, they be friendly to the pauper right there, they’re friendly to everyone. And I just, I give them the tools and the timing to ask for that referral. That’s the only way. I’ve never been able to in, in all my now 55 year career, I’ve never been able to change the natural, figured out a way to incite them, to, to motivate them, to train them. I’ve never figured out a way to get them to change, to doing a good job for asking for a referral. So I’ve learned that the easy solution is get someone else.

[00:20:12] Jason Barnard: Right. Are there specific ways you can ask for a referral that might make it easier? Or are you simply saying, now you can put that to one side and say, let’s have one specialist person ringing up asking for referrals.

[00:20:24] John Hewitt: Now you’re getting into another detail.

[00:20:26] Jason Barnard: Oh, oh yes, I do apologize.

[00:20:30] John Hewitt: So we measure the result, not the activity. So you’re looking at activity, one of our principles is create raving fans. Another one is measure results, not activities. So we have scripts that you can use, but we like to turn people loose and then just measure and let them use their creativity and their pulse. Take a pulse of each customer because different customers have different moods, have different things they react to. So we allow this very personal person to be creative and ask for the referral. At the end of the day, your job is to get 25% referral, whatever the number is, right. That’s a detail.

So whatever the number is, 25, 30, 20, your job is to get that percent. And then if they’re not, then we’ll look at, we’ll listen to their calls and look at the verbiage and give suggestions. But if they’re making their numbers, you know, they may be doing it the way better than we could ever. Any script we could ever invent. So we don’t. We have scripts, but we allow the great, the great, the great refer askers to be on their own. And just as long as you get your numbers, I’m happy.

[00:21:58] Jason Barnard: Right. And so personalization is absolutely key. So you can have a script and I was trying to standardize everything, but you’re saying, have the script, it’s a basis, foundation, but go out there and do what needs to be done for the particular person. Personalization in terms of creating raving fans is key.

[00:22:14] John Hewitt: Absolutely. That’s. At the end of the day, that’s all that matters.

[00:22:17] Jason Barnard: Brilliant. That was a great ending to the whole show. Thank you so much, John. Thank you everyone for watching you get the outro song, A quick goodbye to end the show. Thank you, John from Virginia Beach.

[00:22:34] John Hewitt: Thanks, Jason. My pleasure.

[00:22:36] Narrator: Your corporate and personal brands are what Google and AI say they are. We can give you back control. Kalicube.