The Most Important Algorithm For Entrepreneurs

Photo by Stephen Dawson on Unsplash

In September of 2016, researchers at Google gave away the keys to the kingdom (at least that’s what I think and what I’m about to explain).

They released a paper that — for the first time ever — revealed how the YouTube algorithm works in its entirety.

Anyone who was able to get their hands on that document spent the next week trying to dissect the highly technical vernacular their explanation was couched in. And the few that were able to decode it were then able to systematically catapult their YouTube channels.

For example, I was able to grow my own channel to over 1.7 million subscribers and 167 million views:

Over the next two years I took that algorithm and used it to help numerous clients and partners grow their own channels — literally increasing their views and subscribers by hundreds of thousands.

What’s Inside the Algorithm

But what I want to share with you isn’t just about growing a YouTube channel.

You see, there’s an important secret embedded in the depths of the algorithm — the value of which extends well beyond helping YouTube creators increase their channel views and subscribers.

It’s an insight so powerful that if entrepreneurs or business owners harnessed it, they would literally revolutionize their business.

That’s because the ideas captured by the algorithm result in a transformation of the relationship between businesses and prospects. If implemented they would exponentially expand the customer base and drastically impact the overall health and longevity of your business.

Many people try to build a successful business without leveraging this algorithm. Doing this is like trying to get over a cold by taking Tylenol — you’ll mask the symptoms, but deep down you’ll still be sick.

I call these insights the Empathy Algorithm. Understanding what it means and putting it into operation could be the single most important thing any entrepreneur could do for themselves and their business.

The Impact of the Empathy Algorithm

What precisely would be the result of implementing the Empathy Algorithm?

Imagine what the effect would be on your business if prospects engaged with your content and loved what you created for them. Imagine the impact of customers returning over and over again and you becoming a respected and sought-after authority in your market.

This is just a taste of what could happen when you put the Empathy Algorithm into effect.

Even more impressive is the fact that anyone can implement the Empathy Algorithm in their field. From digital marketers and fitness trainers all the way down to local mom and pop shops — there’s no limit on who can benefit from it.

But just because everyone can use it doesn’t mean everyone will. In fact, most won’t. Which makes it that much more powerful.

In a second I’m going to walk you through the three phases of the Empathy Algorithm and how you can start incorporating it into your business today.

But first let me explain how I even stumbled upon it, because that story actually tells you a lot about how the algorithm works.

Unconventional Discovery

April 11, 2013 was the day I uploaded my first video to YouTube for my channel ILoveBasketballTV. I’ve been adding videos nonstop ever since, and the number of total views will reach 170 million later this month.

None of the success I’ve had on YouTube would have been possible, however, if they hadn’t made a critical algorithm change in early 2014.

Back when I started smaller channels like mine stood no chance against the bigger businesses in our markets. That’s because YouTube’s old algorithm favored view count.

Larger corporations were able to hack this algorithm by sending large amounts of traffic to their videos as soon as they were released. This would inflate the number of views and YouTube would then rank them highest over all other videos in their category.

There was no way that little channels like mine could compete. Or that was the case until YouTube announced their change.

YouTube said they would no longer focus on view count, but instead switch to using “Watch Time” as their measuring stick. Essentially this meant that if people spent more time viewing your videos and your channel accumulated more hours of “eyes-on” watching, then YouTube would send you more traffic.

This changed the game for people like me who were creating content-rich videos but whose channels had a limited number of viewers. Even though my videos were created with nothing more than an iPhone, I had a small but devoted following.

YouTube’s shift allowed entrepreneurs like me to compete for the very first time with larger businesses. Simply put, if you provided quality content on a consistent basis then you would get traffic because your Watch Time would outperform the generic videos that bigger companies usually uploaded.

YouTube was no longer a traffic competition but a content competition.

YouTube’s New Look

No one using YouTube in early 2014 actually saw the algorithm itself, but everyone recognized the shift. That’s because the main beneficiaries of YouTube’s algorithm shift were the “Suggested Videos” and “Browse Features” traffic sources.

Studying them was the key to unpacking just how the Empathy Algorithm works.

If you’ve used YouTube before then you are familiar with what Suggested Videos are (whether you know it or not). They are the videos that appear next to (and after) other videos.

Here are some of the Suggested Videos showing up beside one of my videos.

Anytime someone is watching a video, sees your video in Suggested Videos section, and then clicks on it, YouTube registers another “Suggested Video view” for your video.

Browse Features works in a very similar fashion. It is the default homepage/home screen for both signed-in and signed-out users, and too serves up a grid of recommended videos for your viewing pleasure. Clicking on one of them registers a “Browse Features view” for the selected video:

As soon as you go to YouTube.com, these are the videos YouTube recommends based on previous videos you’ve watched.

For a long time YouTube was primarily viewed by users as a search engine (and it’s still used that way today — second in the world only to Google). But driving the switch in algorithms was the realization that they could become more than just a search engine by changing the way they delivered videos to their audience.

Although YouTube is free to use, it’s important to remember that it’s a business. They generate revenue from advertisers displaying their ads on the videos that appear on YouTube. The simple fact is that the longer YouTube can keep people watching videos, the more ads they can serve up, and the more money they can make.

From a business perspective, it makes no sense for YouTube to encourage searching for videos. It’s much better from their vantage point to have you watching videos. In other words, the new algorithm was designed to do the searching for you.

Eyes on the Prize

After scouring the paper on the YouTube algorithm and researching the analytics of numerous channels, I discovered why Suggested Videos and Browse Features have become the main drivers within their algorithm.

It goes right back to Watch Time. People watch videos from those traffic sources longer than any other traffic source on YouTube — including the search engine traffic.

For example, here are the analytics for the last month for my ILoveBasketballTV channel.

As a “how-to” channel, the numbers for our “YouTube Search” traffic still outweigh the other traffic sources from a view standpoint.

But look at how much longer viewers are watching when they come to our channel from a Suggested Video or a Browse Feature Video. Their eyes are on my videos for nearly two minutes longer when they “find” them though “Suggested Videos” than if they searched for them organically.

To give you a little background, a few years ago over 65% of our traffic on YouTube came from YouTube Search — today that number is just a little over 40%. But it’s not the case that the number of YouTube Searches has gone down — in fact the number is higher than it’s ever been.

But the reason we grew exponentially these past couple of years was through the rise of Suggested Videos and Browse Features — and the algorithm changes that drove them.

YouTube discovered that if they could serve the right videos to the right people then they could keep viewers watching on their platform longer — which would lead to more advertising revenue.

The Golden Goose

Over the years YouTube has continually optimized this algorithm, and they’ve done a damn good job at it.

Surfing on YouTube today reminds me of the Pringles slogan: “Once you pop, you can’t stop.” There’s been numerous times I’ve come to YouTube to watch a quick clip of something, only to find myself still watching videos an hour later.

If this has happened to you — congratulations! — you’re human like the rest of us. Indeed, it’s no exaggeration to say that YouTube built their algorithm to capitalize on this human weakness to binge watch.

What’s remarkable about the algorithm is how good it is at predicting what you’ll want to watch next. Based on what you’ve watched and searched for previously, YouTube can forecast with uncanny accuracy what videos you’re most likely to click on next — and serve them up to you while you’re watching a video or as soon as you log into their platform.

They try to get you to go down the “rabbit hole” as soon as possible for one reason only — because they know that if they can deliver videos you’re likely to engage with, you’ll stay on the platform longer — in some cases hours upon hours longer.

This isn’t only a YouTube thing either. Many other media platforms — including Facebook, Instagram, LinkedIn, and Medium — use similar algorithms to get you to stay and generate advertising revenue for them.

Social media platforms in particular have stopped showing content from your friends chronologically and instead now serve you posts they think you’re most likely to engage with. Indeed, the number one factor in Instagram’s current algorithm that determines which posts you see is how much they think you’ll “like” a post.

They know what YouTube understood back in 2014: if they do this right then you’re much more likely to stay on their platform much longer. And the longer you stay, the more ads they can put before your eyes.

None of this is confusing or surprising unless you’re a United States Senator. Everyone chuckled along with Facebook CEO Mark Zuckerberg when he explained to the befuddled Senator that Facebook makes its money from running ads.

But in reality the joke is on us. The bottom line is that these algorithms exploit our attention so that platforms can run more ads at us.

Ethical Rabbit Holes

Regardless if you like social media or hate it, if you’re a creator it would be stupid to ignore the algorithms it uses.

Especially when we can use this framework to ethically help people.

You see, business is a marketing game, and marketing is nothing more than a battle for attention. As entrepreneurs we are in a constant battle to grab and hold the attention of our prospects.

These algorithms have proven that the best way to get and keep that attention is to predict what someone wants to engage with and serve them quality content based on that prediction.

As humans, we can’t process millions of pieces of data per second to figure this stuff out like a computer-based algorithm can.

But there’s something we have that computers do not. Something we can tap into that they can’t. Empathy.

By empathizing we can discover our target market’s wants and needs so well that we can predict what they will want to engage with — allowing us to grab (but not abuse) their attention.

Through empathy we can offer solutions to their problems — helping them while providing an experience they won’t be able to find anywhere else.

In fact, your ability to empathize could be the difference between your company flourishing in the future or withering on the digital vine.

I learned that this was true for my own businesses when I began using what I call the Juggernaut Method.

I discovered that if I created content based on topics people within my target market really wanted they’d engage with me more; if I sent emails to people based on topics they were really interested in they’d read more; and if I created products they really needed they’d purchase more.

It’s the simple idea of giving people what they want — and if you can do this effectively, they are much more likely to engage with you and your business — and keep coming back.

Overcoming the Roadblock

But this is much easier said than done.

The problem I’ve found is that most entrepreneurs and business owners don’t know what their target market truly wants.

We spend so much time worrying about the bells and whistles of our own products and accolades that we forget what really matters — the consumers’ desires.

And the only way to truly know what our consumers want is to empathize with them.

Because only by truly empathizing with our audience can we provide them with the information that they want in a way that they can relate to.

The Empathy Algorithm offers a step-by-step way to do exactly that: to determine what the customer wants and provide it better than anyone else. And once you do that, from the customer’s perspective the competition becomes…. irrelevant. There’s simply no need for them to look anyplace else when everything they need is right at their fingertips.

I’m almost ready to explain the Empathy Algorithm to you. But first I need to say a little bit more about empathy.

Why Empathy Is Misunderstood

Empathy is one of those words that sound good, but few entrepreneurs and business owners understand exactly what it means (much less practice it).

As a starting point, consider how Helen Riess (author of The Empathy Effect) describes empathy:

A dynamic capacity that allows you to share experiences with others, feel concern, take the other’s perspective, and motivate a caring response. The full empathic circle leads to an empathic response: You go back out in the rain in reality and offer the unfortunate freezing person a warm raincoat and umbrella.

Empathy therefore isn’t sympathy or good customer service, although those could be aspects of empathy. It’s about being able to feel what others feel and see what others see.

By understanding what your prospects and customers feel and see, you can better meet their wants. This allows you to take the guesswork out of content creation.

Of course we can never fully empathize with someone, because we haven’t been in their shoes every step of their lives. But the goal should be to gradually close the gap between where you are and where they stand.

And empathizing helps close that gap because it allows you to cater your content and pitch to target specific emotions.

This is important because humans tend to make purchase decisions based on emotions rather than logic.

You shouldn’t try to sell your prospect on what is logically best. You should help them discover for themselves what feels best and most advantageous. Their decision will ultimately be based on their internal wants and desires.

That’s their emotions at work — and that’s what you need to connect with as the problem solver.

Empathy therefore can’t be an afterthought or a tactic you turn to when everything else stops working.

It must be the foundation of your business strategy.

What’s Good for the Heart is Good for Business

Studies have shown that leading with empathy is not just the right thing to do but good for business as well.

For example, in 2016 Harvard Business Review measured different companies’ empathy by looking at their leadership, company culture, brand perception, and public messaging through social media.

The researchers found that the top 10 most empathetic companies — which included Alphabet, Southwest Airlines, and Whole Foods — increased in value more than twice as much as the bottom 10 and generated 50 percent more earnings.

What they said about the importance of empathy was equally as revealing:

[U]nderstanding our emotional impact on others and making change as a result is more important to a successful business than it has ever been, correlating to growth, productivity, and earnings per employee.

Even famous entrepreneurs like Asheesh Advani and Elon Musk recognize that the right business decision can be driven by empathy. Advani, who sold his first start-up (Virgin) to Richard Branson, said in an interview that demonstrating empathy has been a major catalyst to his business success.

And Musk is rightly famous for the steps he took last year during Hurricane Florence. Tesla decided to activate more battery capacity in the cars and provide free Supercharging to help drivers evacuate the hurricane:

This wasn’t the first time Musk had done this either — he also did it a year earlier during Hurricane Irma.

But Musk not only empathizes with his customers; he’s also emotionally attuned to the experience of prospects.

It’s no great secret that most people hate the car buying process, with salespeople buzzing around you like gnats on a hot summer day. Pretty much everyone would agree that buying a car would be so much more enjoyable if you could simply arrive at the dealership, find the exact car you wanted on the lot, pay for it, and leave.

By empathizing with his audience, Musk was able to figure out a way to create a better experience for his prospects. Instead of settling for what’s available, Tesla allows you to create and buy your perfect car online, and then simply go to the nearest Tesla store to pick it up.

That’s truly putting yourself in your prospects’ shoes, understanding their problem, and providing them not just a solution but an amazing experience.

These are just a few of the many examples I’ve found of businesses putting empathy at the top of their priority list.

And if some of the most successful entrepreneurs in the world can take time out of their day to empathize with their target market, there’s no reason why the everyday entrepreneur can’t.

So Why Are There So Many Scrooges?

The overall idea is simple: Be empathetic and improve your chances at running a successful business.

But then why do the vast majority of entrepreneurs struggle with truly empathizing with their prospects and customers?

Now I’m sure if you asked business owners if they thought they ran an “empathy-first” company, they’d say that they do. After all, we’ve come to expect the companies we do business with to empathize with us.

But if you look a little deeper you’ll see that the actions of these companies don’t match their rhetoric about empathy. For every Tesla during Hurricane Florence there were ten companies who were raising their prices and gouging consumers to take advantage of shortages.

It’s simply a fact that putting others first is not natural for us — particularly in the west where individuality is prized and communal “we’re-all-in-this-together” solutions are labeled as anti-American.

It’s not that we don’t care about others, or don’t want to see others succeed. It’s just that we care more about ourselves and our success than we care about the success of others. Thanks to evolution and the survival of the fittest, we’ve been hard-wired to look out for ourselves and do what’s in our best interest.

When you think about it like that, it’s easy to see why empathizing with others is so hard. It requires us to slay our ego, abandon our ambitions, serve others first, and ultimately leave money on the table.

In the end it’s the difference between aspiration and ambition.

Ambition is usually selfish. It’s the search for what benefits me, makes me rich, and puts me on top of the world.

Aspiration on the other hand is usually selfless. It’s the search for what can I create that can benefit others.

Ambition makes us want power over others, while aspiration makes us want to empower others. While only a few can ever satisfy ambition, everyone is capable of fulfilling an aspiration. As Charles Dickens said, “No one is useless in this world who lightens the burdens of another.”

Empathizing is one way to protect ourselves from making the mistake of confusing ambition for aspiration. Empathy allows us to enjoy the sight of seeing others succeed. And aren’t the best businesses the ones where their customers feel success after using their products?

And that’s where the Empathy Algorithm comes into play.

How The Empathy Algorithm Works

The Empathy Algorithm is a three step process to connect with someone on such a deep level that you understand their deepest hidden wants, and can communicate what those are in the same language they would use.

Using the algorithm, you’re able to better serve your prospects and customers with the content, products, services, and experiences you create. It’s how you can build organic empathetic relationships with your audience.

The Empathy Algorithm is broken down into three phases:

  1. Affinity Analysis — Measure influences that sway people one way or another and assess what it is that people truly want.
  2. Creation Mastery — Become a solution creator and help solve the biggest problems that you find.
  3. Unforgettable Experiences — The journey you give your prospects and customers that keeps them coming back.

Now let’s dig in deeper to each of the three phases.

Phase 1: Affinity Analysis

The first phase of the Empathy Algorithm is to perform an affinity analysis — researching the influences that sway people one way or another and assessing what it is that people truly want. This is not unlike search engine optimization but directed at the needs of prospects and customers.

Doing it right requires various types of extensive research (which we’ll break down into more manageable “buckets” based on the problem). It’s a critically important step that is both time consuming and necessary to make the rest of the process run smoothly.

Abraham Lincoln once said, “Give me six hours to chop down a tree and I will spend the first four sharpening the axe.” In phase two you’ll chop down the trees that you prepared for in phase one — by formulating solutions to the problems based on the information you uncovered through your “sharp” research in phase one.

You must spend a significant amount of time doing as much research as you feel is needed — usually more than you think — to truly understand your prospects’ thoughts, ideas, feelings, and wants. Once you have a clear understanding of them you can begin to allocate your time to the other phases.

But one thing I’ve noticed in business is that people don’t know or understand their audience enough to do the thorough analysis that is needed. They go into the research with pre-determined ideas about what they’ll discover. As Stephen Covey has said, “Most people do not listen with the intent to understand; they listen with the intent to reply.” Phase 1 is a time to listen.

As I mentioned before, usually the focus is on the product or brand we are creating instead of the people we’re looking to help. But it can’t be like this. The audience must come first. Because no matter how great the product is, if we don’t have anyone to tell about it, then it’s useless.

In other words, a failure to research is a failure to empathize.

The Three Buckets

In-person data collection is performed by listening to your ideal prospects and customers. Listen fully and openly to what they are saying without bias, defensiveness or thinking about what you’ll say next. Pay attention not just to their words but their body language as well. Actively listen “through the words” to the deeper thoughts and feelings that you sense from the speaker. Ask follow-up questions that are open ended yet specifically connect to what they are saying. 
 
As a former basketball player and coach, I’ve had lots of practice listening to what others are saying. In the online marketing and small business space, I’ve had to do much the same. But instead of viewing it as work I see it as an opportunity to learn. I am always listening to fellow entrepreneurs, prospects, and customers. There’s no method of collecting data that can beat face to face interaction for granular detail and the ability to pursue additional lines of inquiry when you discover something you didn’t know.

Digital exhaust like emails, chats, and social media comments are another excellent source of data that you can empathetically mine for information. Start with customer support emails, email conversations, and social media private chats between customers and prospects. Identify trends, passions, and friction points, and use these to fuel your conversations with others.
 
Of course it’s good to collect what’s said in comments on your posts, but it’s also essential to research the posts and comments of people that do something similar to you. This is research after all, and it’s going to take some effort to look for the data you need. Happily the digital world is awash in feedback people leave on social media posts. Mine them for insights into the nature of the problem that you can solve.

Search engine inquiries are a great resource that people can turn to who are just getting started that don’t have many prospects or customers yet. Rephrase the problem half a dozen ways and search Google and YouTube for posts that come up for your searches, and then scour the comment sections of the most popular posts and videos.

You’ll be amazed what you find, and while 99% of the comments will be useless, somewhere in everything you’ve researched you’ll discover…
 
The diamond in the rough. This will be the comment where someone pours their heart out and tells you what they need — and the solution you can provide. I’ve found these comments in all sorts of forums, but especially in the comments on blog articles and YouTube videos because they are not associated with a personal profile like Facebook — and people tend to be more likely to reveal their true feelings and insecurities on those forums without the fear of being judged. 
 
 This process of performing research, collecting data, and sifting through it to find diamonds was one of the ways I was able to significantly grow my own YouTube channel. I would search competing channels’ videos that were based on the topics I knew my audience needed help with. From there I’d investigate the comment sections for common themes and note the pains they were going through. I’d then create the videos the audience was asking for, filling in the gaps of competitor channels with my own content.

Soon enough people were coming to my channel because they knew that they would find the videos they were looking for. They’d even ask me to produce additional videos specifically addressing their needs. Over time my channel became the most dominant authoritative full spectrum channel that covered the areas my competitors failed to fill and “predicted” what my target market truly wanted. While they were busy showing off their skills to prove they should have made it to the NBA, I was focused on discovering and solving the true problems my audience was experiencing.

This method can work for any platform you’re uploading content to, as well as influence the products and services you create.

Here are a few questions to ask yourself before you move to phase two:

  • What are your prospects and customers feeling?
  • What are they saying to themselves?
  • What are they saying to the public?
  • What are the themes running through all three buckets?

Phase 2: Creation Mastery

The next phase of the Empathy Algorithm is to become a solution creator, helping to solve the biggest problems that you found in your research — leading with empathy in ways that educate, entertain, and inspire your audience.

Here’s the thing: as humans, we all suffer from many of the same problems, insecurities, and feelings. Just because only one person mentioned a particular problem they are having, if the way they said it singles their comment out as a diamond in the rough, you can pretty much guarantee that more people are suffering from the same problem.

Think about in school when the teacher would ask a question like, “Who’s having trouble understanding this?” and no one would raise their hand — until one student did then more hands would follow. That’s what will happen when you solve what might appear to be just one person’s problem.

But the real power of your research lies in the way you communicate the solutions to your audience.

You want to relay the information back in the way that it was written or spoken by your prospects and customers. You should speak to them in the language that was written in the Affinity Analysis data you collected.

For example, let’s say you’re a fitness trainer for women and through your research you find that many women don’t just say they want to lose weight, but they want to lose a certain amount of weight to fit their wedding dress. When you create your content to help them, don’t say, “Today I’m going to show you how to lose weight so you look better,” because that’s not what they really want.

Instead say something like, “I know how important your wedding day is. I remember the day I got married and there was no better feeling than being able to fit my dress perfectly and feel beautiful in it. That’s why today I want to show you three tips that can help you lose 10 pounds within the next three months so that you and your perfectly fitting dress shine on the most important day of your life.”

Do you see how much more powerful that is?

Specificity isn’t just good — it’s essential. My good friend Andre Chaperon says that when you can describe their problem (pain) better than they can, they’ll believe you also have (and know) the solution. At that point you’ve won their business.

You should be starting to see why the Affinity Analysis is so important and why it’s the foundation to the entire Empathy Algorithm. Unless you do the research, you won’t be able to empathetically connect to your audience.

To Pay or Not to Pay

We are living in a golden age when it comes to actually relaying the information back to our audience, because it’s never been easier to publish content that has the chance to be seen by tens of thousands (and maybe even millions) of people. The question instead becomes how you’re going to let them see it.

Whether you choose to deliver your content as free or paid is essentially up to you. There are benefits to both, and because of that I recommend both.

The ultimate goal is to build an organic, empathetic relationship with your prospects in order to make them a customer. You’re trying to find the retention point — where a prospect becomes a customer because you meet their needs.

The foremost authority on retention points is Robert Skrob. In his book he explains how Netflix show creators try to “hook” their viewers early in a series so that viewers stick around to watch every episode. He himself focuses on providing a “hooking episode” early in his monthly subscription memberships to lower the churn rate.

I couldn’t agree more with Skrob about hooking your prospects, but respectfully disagree about when that should happen. You shouldn’t wait until a person becomes a customer to get them hooked.

Instead, you should hook them before a transaction ever takes place.

The metaphor I use to explain what I mean comes from cooking. Think of it as giving away your ingredients for free but charging for your recipe.

Look at it this way: if I’m in a cook off with Gordon Ramsay, he can give me the same ingredients to cook with as he would use, but I’m sure in his hands the meal will come out perfect, whereas I’m still going to undercook the chicken and burn the vegetables.

Over the past seven years I’ve literally created over a thousand free YouTube, Facebook, and Instagram videos for my prospects. It’s probably hard to fathom being able to make a living when giving away all that free information, but it’s actually been a catalyst to the success of my businesses.

All those videos are my ingredients. And I’m more than happy to give these basic, helpful pieces away for free. But in order for my prospects to get the upgraded plan and fastest results, they’ll need the recipe — and that’s what I keep behind a paywall.

The “ingredients” should have a sharp look and feel and be easy for people to interact with. This keeps both non-buyers and buyers happy because it helps everyone on a basic level while encouraging the more serious people (customers) that there’s real substance to the system if they take further action.

Here’s another secret: as great as free information is — and can be — people just don’t value it as much as the information they spend their hard-earned money on. People like spending money on things they think are worth it. Your job is to convince them with your ingredients of the value your recipe will provide.

Your recipe could be a product, service, mastermind, event or whatever it is that you are selling. It isn’t just the free content packaged together — the audio (podcasting), text (articles), video, or a combination of all three (the best option in my view). It’s the step-by-step system that shows them how to most efficiently integrate the ingredients to produce the meal they’ve been dreaming of.

The mistake I see many entrepreneurs make is they either are afraid to sell their stuff because they don’t want to piss people off or they don’t want to give away anything for free because they feel it will devalue their work. What they don’t appreciate is that the free information is how you build an empathetic relationship that becomes the gateway to your paid information, product or service.

Businesses depend on the revenue they generate, but it’s hard for many entrepreneurs to understand that this revenue depends on our relationships with our prospects and customers. And there’s no better way to massively build and grow those relationships than through free content.

Phase 3: Unforgettable Experiences

The last phase of the Empathy Algorithm is how you wind up providing your prospects and customers an unforgettable experience that keeps them coming back.

The experience starts at the free content level. By creating high quality content that educates, entertains, and inspiresyou give prospects a taste of what interacting with your business is like. And remember what I said above — prospects should cross the retention point as they interact with your ingredients (after all, how else will they ever become paying customers?).

But where we really want to focus on the experience is with our customers, because these are the people that keep our lights on. You need to create an unforgettable experience with them because their word of mouth about your recipe is pure gold to your business.

And ironically, the best way to show them that you really care is to give them something that is exclusive but free.

Imagine you were them, opening the “box” of paid content that you just bought. You’ve been an avid user of the free content for a while now but are ready to put down your hard-earned money to take the next step. You undo the bow and reach inside, only to discover there was another gift in there — just for you. Not an “exclusive” bonus they promoted on the sales page but a genuine surprise. Something useful, helpful, and even meeting a need they didn’t know they had till they received your present.

In other words, something that showed that you really, truly empathized with them, and are grateful for their business.

Think about how that would make you feel. Probably pretty great, right?

Now think about how you could do this for your customers.

Don’t get me wrong: your product still has to be amazing itself. You can’t disguise a bad product with extra gifts. But it’s important to think about how you can you go above and beyond to make their first interaction with you as a customer one hell of an experience.

I already mentioned how Elon Musk and Tesla empathize with their prospects and customers. But what I didn’t mention was that on the day I bought my Tesla, they also gave me an umbrella, a pen, and a key chain.

The sale was already made, and the product was more amazing than I could have ever imagined. It was a done deal. I was already a paying customer. But the gifts they added were like the cherry on top.

They didn’t have to give me those things, but they did. The gifts I received weren’t promoted anywhere and I had no idea they were coming, but they were both useful and helpful, and I still have all three to this day.

It didn’t cost them much to do this — and at that point the price doesn’t matter. It’s not just the thought that counts — it’s the thought that attracts and retains customers.

Another example I like of “going the extra mile” to create an amazing experience for customers comes from Sean Covey’s The 4 Disciplines of Execution. He discusses a luxury hotel chain that wanted to achieve the highest level of customer retention. They did this through what I call “individualized personal service.”

Staff members carefully recorded each individual guest’s preferences so they could make sure to provide the same services each time the customer came back to any hotel in their chain. One guest specifically asked that the housekeeper not throw away his half-smoked cigar in the ashtray because he wanted to finish it later.

To his surprise when he returned there was a brand-new cigar of the same brand sitting on the ashtray next to his half-smoked one. He thought that was a nice touch, but what really shocked him was that when he booked a room at another hotel in the same chain his favorite brand of cigar was already waiting for him in his room when he arrived.

This is not something the hotel had to do but they went out of their way to do it anyway because they knew the effect it would have on customer retention. In fact, the customer was quoted saying “Now I have to go back just to see if the cigar will be there. They own me!”

You can see how going above and beyond like this far outweighed the slight additional cost of providing the cigar, and in the long run allowed them to make even more money from that now lifetime loyal customer. Or as Naval Ravikant (the CEO of AngelList) put it, “Play long-term games with long-term people.”

It’s the Little Things That Count

In my own businesses, I always look for ways to make the customer experience better. I try to provide that “above and beyond” individualized personal service to every customer.

Last year we held a small event, and everyone that arrived had a box of “goodies” waiting for them on their bed in their hotel room. Nothing extraordinary, but still useful things: a t-shirt, coffee mug, notepad and pen, candy, etc. It didn’t cost us much, but it was something that everyone enjoyed, talked about, and remembered.

If you’re a business owner, think about how you can go above and beyond for your prospects and customers. How can you seduce them into coming back?

Remember: empathy requires leaving money on the table. But leaving a few bucks on the table at the beginning of the relationship is a small price to pay when that customer comes back to you for life — and recommends your services or products to others.

Phase 3 is also where having great customer service comes into play. John Boccuzi did a fantastic Ted Talk explaining why customer service (as opposed to traditional marketing strategies) has the potential to be the greatest form of marketing for a brand. Great customer service doesn’t just mean refunding when people ask — it means having support that truly cares about the betterment of your customers.

As an entrepreneur, you aren’t only in competition with those brands that overlap with your product or service. The experience you provide is going up against every other company your audience engages with.

Sometimes customer service is just issuing a refund, but it doesn’t always require you to lose money. The best businesses in fact are just as creative in their customer service as they are with their products — offering (for example) a new product or service that provides the best solution to help customers grapple with a particular problem. You can end up doubling or tripling your income just by providing unforgettable customer service to your prospects and customers.

But good customer service is just one way you can create an unforgettable experience. Through theEmpathy Algorithm you continually focus on the “little things” that create those experiences — the kind of things that most entrepreneurs and business owners overlook. It’s these little things that make all the difference and make you stand out in a world full of competition.

My high school basketball coach used to tell me that offense brings fans to the games, defense wins games, but it’s the little things that win championships. In business, the quality content brings people to you, your products convert them to customers, but it’s the little things you do that keep them coming back.

What’s Next

Starting from scratch and being a full-time online business owner for over seven years, I can relate to the difficulties many business owners are currently going through. But the experience of watching my business grow from nothing to what it is today — due to a lot of hard work and following the Empathy Algorithm — has been more gratifying than I could ever have dreamed.

I hope those of you reading this continue to dream big. Whether you are on the cusp of starting your own business or the CEO of a company on the verge of designing a new product, the secrets embedded in the Empathy Algorithm can help you revolutionize your business and transform the relationship between you, your prospects, and ultimately your customers.