WEBVTT 1 00:00:00.000 --> 00:00:04.080 If you cut the lowest percent of the team and you have utilization like you have space, 2 00:00:04.080 --> 00:00:10.080 you lose the lowest closing percentage, people, and you gain more closes just by shifting the 3 00:00:10.080 --> 00:00:15.520 closing rate overall of the team. When you make those changes, in my experience, sales people get 4 00:00:15.520 --> 00:00:22.560 into a rhythm. Welcome to the game where we talk about how to sell more stuff to more people in 5 00:00:22.560 --> 00:00:26.320 more ways and build businesses worth owning. I'm trying to build a billion dollar thing with 6 00:00:26.320 --> 00:00:30.720 acquisition.com. I always wished pesos, musk and buffet had documented their journey, so I'm doing 7 00:00:30.720 --> 00:00:37.040 it for the rest of us. Please share and enjoy. I have 13 portfolio companies and I just doubled 8 00:00:37.040 --> 00:00:42.960 one of them in 60 days by solving five key problems. And what I'm going to do is show you the data of 9 00:00:42.960 --> 00:00:48.240 what it was before, why it was wrong, what we fixed, and what happened after. Enjoy. So this is 10 00:00:48.240 --> 00:00:53.440 the second smallest company on our portfolio. It's started by three young founders who are all 11 00:00:54.160 --> 00:01:00.000 sad because they were not making the amount of money that they wanted to make and they had 12 00:01:00.000 --> 00:01:04.400 these problems. And they were writing this very bad roller coaster that they were desperately 13 00:01:04.400 --> 00:01:09.360 trying to get off. And a lot of that was because they didn't have processes in place for each of 14 00:01:09.360 --> 00:01:12.880 the key functions of acquisition. There's not a lot of product problem, but I'll get to that later. 15 00:01:12.880 --> 00:01:17.280 As an investor, when I see a problem, I really do see it as an opportunity-increased value, 16 00:01:17.280 --> 00:01:21.520 and that's what I get excited about. That's where a lot of the value gets created anyway. So like, 17 00:01:21.600 --> 00:01:26.160 imperfect businesses are what we deal with. So before I show you the data, let me explain what 18 00:01:26.160 --> 00:01:30.800 each of these terms actually mean. So show rate is the percentage of people who have an employment 19 00:01:30.800 --> 00:01:35.360 who show up for their appointment. So in any business, if you deal with people, you will have 20 00:01:35.360 --> 00:01:39.760 sessions or appointments. Do you have a time slot that someone says they're going to show up, 21 00:01:39.760 --> 00:01:44.240 right? If it's a sales consult and they are a prospect and they're going to show up to get sold. 22 00:01:44.240 --> 00:01:48.720 So if I have 100 people with an appointment and 70 show up, that would be a 70% show rate. The 23 00:01:48.800 --> 00:01:53.360 second one here is offer rate, which we forgot to put in the rate. So let me just put that in for you. 24 00:01:53.920 --> 00:01:58.320 There you go. Offer rate, which is the percentage of people that we actually make an offer too. 25 00:01:58.320 --> 00:02:02.160 You might be like, well, why would I not offer everybody? Well, not everyone's qualified. 26 00:02:02.160 --> 00:02:05.600 And so for example, if I work with only gym owners and somebody comes on, it's like, oh, 27 00:02:05.600 --> 00:02:09.920 I'm a personal trainer. I'd be like, well, you shouldn't be here. And we had all these other things 28 00:02:09.920 --> 00:02:15.040 that said, don't be here, but you still came. Why are you here? I can't offer you anything. And so 29 00:02:15.040 --> 00:02:19.120 then that means that you don't offer them anything. And that's it. Now, if 100% of people who showed 30 00:02:19.120 --> 00:02:23.760 up show rate, you were able to offer to, then that means that your offer rate would be 100%. 31 00:02:23.760 --> 00:02:28.640 And that is an indicator of the quality of the lead flow that you have. The third is close rate. 32 00:02:28.640 --> 00:02:32.880 And this depends on how you can track this. So you can either do it based on percentage of people 33 00:02:32.880 --> 00:02:37.840 who show or you can do it on percentage of people who are offered. What I normally do is I'll just 34 00:02:37.840 --> 00:02:41.760 track both. I'm going to guess that this one is off of offer rate because it's what we have here. 35 00:02:41.760 --> 00:02:47.280 It's good to have both stats here is because let's say a salesman wants to artificially increase 36 00:02:47.280 --> 00:02:52.160 his close rate. Well, then he will just say, well, I'm not going to offer anyone unless I know 37 00:02:52.160 --> 00:02:55.920 they're going to say yes. And so then their close rates high. And then they'll show that there's 38 00:02:55.920 --> 00:03:00.560 a really low quality score. But if that salesman, this is why having team stats is so important 39 00:03:00.560 --> 00:03:04.880 and individually is because if the team is all saying that they're off rate 70 and one guy saying 40 00:03:04.880 --> 00:03:09.520 is off rates 30, but he has 100% close rate and they all have 30% close rates, we know where the 41 00:03:09.520 --> 00:03:14.320 data went. And this is why having high quality data allows you to see what the problems are. 42 00:03:14.320 --> 00:03:18.080 If I didn't have this percentage, then I wouldn't know it's because we have low quality leads 43 00:03:18.080 --> 00:03:23.680 or because my salesman suck, right? This data allows me to identify the problem and then fix it. 44 00:03:23.680 --> 00:03:28.160 So the fourth set here is percentage of cash collected up front, meaning if we're selling 45 00:03:28.160 --> 00:03:34.800 thousand dollar widgets and the average cash we collect today is $500 because people do payment 46 00:03:35.440 --> 00:03:39.600 then we would know our cash collected percentage would be 50%. Unit sold, this is also a great 47 00:03:39.600 --> 00:03:43.920 indication of how good your sales team is as well. If I have a low close rate but high cash collected 48 00:03:43.920 --> 00:03:49.440 percentage, that would tell me a different story than a really high close rate and really low cash 49 00:03:49.440 --> 00:03:54.160 collected percentage. I'd be like, oh, so they're just getting anyone to say yes and taking $10 50 00:03:54.160 --> 00:03:58.160 down if they can versus somebody saying we have a hard line. And so it's really trying to find 51 00:03:58.160 --> 00:04:01.600 the magic between these two and saying, how can I get as many people to say yes and get as much 52 00:04:01.600 --> 00:04:05.360 cash collected up front. The final one here is just unit sold and this is really just the output 53 00:04:05.360 --> 00:04:10.160 of these four. If we multiply these things together, how many we need to close it and that's the result. 54 00:04:10.160 --> 00:04:18.400 So let's reveal the data. So beforehand, we had 49% show rate. So let's say we have 100 appointments. 55 00:04:18.400 --> 00:04:23.600 Now we have 49 who actually show up for their appointment. And then of the 49, we're able to offer 56 00:04:23.600 --> 00:04:30.160 83% of them beforehand. So 80% of that is 40. 40 people now are getting offered out of our 57 00:04:30.160 --> 00:04:37.600 original 100 appointments. Of the people get offered 27% of them, which is 10 people, roughly, 58 00:04:37.600 --> 00:04:42.720 are actually buying in that closing percentage. And then our cash collected from those 10 people 59 00:04:42.720 --> 00:04:47.520 is we're getting a little less than half of the cash that we closed down. Now I gave you 100 as a 60 00:04:47.520 --> 00:04:53.920 number, but the actual number of units sold for this business in the prior month was 56 units. 61 00:04:53.920 --> 00:04:58.480 All right. So this is current state. If you don't know these numbers in your business, 62 00:04:58.480 --> 00:05:02.160 you should so that you can improve them. Like, let's say I invest in your business today. 63 00:05:02.160 --> 00:05:05.040 The first thing we do is get the data so that we can see what baseline is, 64 00:05:05.040 --> 00:05:08.880 so we can see where the discrepancies are and where we think the biggest opportunities for 65 00:05:08.880 --> 00:05:11.760 improvement are. And you're going to have to wait till the end for me to show you what happened 66 00:05:11.760 --> 00:05:16.880 after. So let's start with problem number one or opportunity for improvement number one. 67 00:05:16.880 --> 00:05:22.480 We had a low show rate as in based on our benchmarks of 70% for any kind of employment type business. 68 00:05:22.480 --> 00:05:26.240 We think that we should have at least 70 there. Allen, which is a company that I had, 69 00:05:26.240 --> 00:05:29.760 all we did was show rates. There is lots of data that we were able to collect, but we were doing 70 00:05:29.760 --> 00:05:34.560 4,000 appointments a day. We had a machine learning team to think like, what was the number of 71 00:05:34.560 --> 00:05:38.960 communications that we had to have with the prospect? What was the delay between responses that 72 00:05:38.960 --> 00:05:43.440 got the most people? How many questions would we ask? What was their tonality or the total number 73 00:05:43.440 --> 00:05:48.480 of exchanges? How far apart were the exchanges? And how far out would we be willing to book an 74 00:05:48.480 --> 00:05:53.040 appointment for the show rate to increase? And so when we have show rate issues, I feel very 75 00:05:53.040 --> 00:05:57.120 confident saying that these are the benchmarks that I can share with you. So they were low based on 76 00:05:57.120 --> 00:06:02.320 our benchmarks. So their number was 49% of appointments for showing it. Well, we wanted them to be out 77 00:06:02.320 --> 00:06:07.040 with 70%. This is our benchmark where we'd say, okay, this isn't a problem anymore. Now, 78 00:06:07.040 --> 00:06:10.320 do we want to improve things? Absolutely. But where are we going to allocate our effort at the 79 00:06:10.320 --> 00:06:17.360 constraint? This was a constraint. Now, to give context here, this delta is a 40% difference. 80 00:06:17.360 --> 00:06:21.840 40% is a lot. Think about the S&P 500. They're like, we try and grow 9% here. It's like, boom, 81 00:06:21.840 --> 00:06:26.080 I unlocked that. I get 40% growth. I don't have to do anything else for like four years in the S&P. 82 00:06:26.080 --> 00:06:30.720 All right. Big wins. That's what we look for. Lots of things can affect show rate. By the way, 83 00:06:30.720 --> 00:06:35.680 the number one one that affects show rate is number of total time sites available. Take that to the 84 00:06:35.680 --> 00:06:41.120 bank. But one of the other ones is the targeting and the offer itself. So targeting is who's actually 85 00:06:41.120 --> 00:06:48.400 seeing this promotion? If I'm targeting teeny-boppers, for example, I might get people to schedule, 86 00:06:48.400 --> 00:06:54.080 but then realize that they're not here for a laser hair removal. They're like, I don't even have 87 00:06:54.080 --> 00:07:00.400 area. So the targeting there would be off. And so that would affect our show rate. And that has 88 00:07:00.400 --> 00:07:03.920 nothing to do with our lead nurture sequence or our salesman or anything like that. It's just the 89 00:07:03.920 --> 00:07:08.880 wrong people we're seeing. So that was issue number one. For context for us, just imagine that's 90 00:07:08.880 --> 00:07:15.200 underneath. It was 25 to 35 year olds who were gainfully employed and love their job. And this 91 00:07:15.200 --> 00:07:18.800 targeting that when we came in to look at it was actually targeting 18 to 24 year olds. 92 00:07:18.800 --> 00:07:24.160 At acquisition.com at Holdco, we have media buyers. We have pros who do this for a living. 93 00:07:24.160 --> 00:07:28.880 And so when they zoomed in on how their media buyer was optimizing the traffic, 94 00:07:28.880 --> 00:07:32.160 they were optimizing. It's what a lot of people would initially think they should do, which is 95 00:07:32.160 --> 00:07:37.680 optimizing for the lowest cost leads and the lowest cost deployments. What we had to do was switch to 96 00:07:37.680 --> 00:07:42.720 optimize around cost per sale. If we can optimize around who we actually sell to or optimizing for 97 00:07:42.720 --> 00:07:46.880 the number of transactions will shift where the sale comfort. And just to give you how big of 98 00:07:46.880 --> 00:07:52.640 a problem this was, they had to cancel 75% of their appointments before the 49% show rate. 99 00:07:52.640 --> 00:07:54.960 The sales guys were spending much of their time just looking at their appointment, 100 00:07:54.960 --> 00:07:59.120 looking up the person canceling to get their 49% show rate. And that's about the closest thing 101 00:07:59.120 --> 00:08:05.840 to literally burning money. So the second big problem was multitasking. And this really goes for 102 00:08:05.840 --> 00:08:11.200 any role, but especially like sales driven roles, they had a setting team and a closing team. 103 00:08:11.280 --> 00:08:16.800 And the setters were both trying to call leads to get appointments and then also nurturing and 104 00:08:16.800 --> 00:08:20.560 doing the follow up to remind them of the appointment. And as similar as that may sound in your 105 00:08:20.560 --> 00:08:24.320 mind, it's two completely different activities. You're banging phones, you're calling people up, 106 00:08:24.320 --> 00:08:27.840 you're in that flow, and then you're like, oh, wait, Sarah hasn't appointment today. Let me go 107 00:08:27.840 --> 00:08:31.040 over mine. Sarah, just Sarah going to shut up to and they're like, wait, I'm calling and then you 108 00:08:31.040 --> 00:08:35.360 start like it is you go back and forth. So they had three big issues. Number one is that they 109 00:08:35.360 --> 00:08:38.720 weren't double dialing, right? Which is one of the most common things that you can do by the way 110 00:08:38.720 --> 00:08:42.800 for doing phone calls because a lot of initial screens will stop the first call. But if you dial 111 00:08:42.800 --> 00:08:49.280 twice, you'll get through. Number two is that the time to contact was too slow. So lead would come 112 00:08:49.280 --> 00:08:55.120 in and they would just like sit there for 30 minutes, 60 minutes, an hour, two hours, three hours, 113 00:08:55.120 --> 00:08:58.320 right? And they weren't getting contacted. It's like, what did this person do? They're like, oh, 114 00:08:58.320 --> 00:09:05.280 I'd like to find out more information. Nothing. And the third thing is that they didn't have the 115 00:09:05.280 --> 00:09:09.680 right time set appointments and they weren't nurturing correctly. So we go same day next day. 116 00:09:09.680 --> 00:09:15.200 I'm just giving you some secrets. And they didn't have morning of nurture, okay? Meaning, 117 00:09:15.200 --> 00:09:18.320 if you have an appointment today and you booked this appointment three days ago, 118 00:09:18.320 --> 00:09:22.640 if I don't remind you that day that you have an appointment, the likelihood that you show is lower. 119 00:09:22.640 --> 00:09:26.560 And so these are the problems that they have. No double dial, blow speed to contact, 120 00:09:26.560 --> 00:09:32.160 and they didn't have any morning of nurture. But wait, there's more. The second problem they had, 121 00:09:33.120 --> 00:09:38.560 or opportunity for improvement was that they had a low close rate. And this is based on our 122 00:09:38.560 --> 00:09:44.000 benchmarks. So I would normally give you a KPI, but it has so many different variables in terms of 123 00:09:44.000 --> 00:09:48.160 what percentage close rate is. Because if you're selling in person, for example, for a low ticket 124 00:09:48.160 --> 00:09:52.560 thing, you might be able to sell 80% plus of people walking the door. On the flip side, 125 00:09:52.560 --> 00:09:58.000 if you're selling an investment opportunity over the phone on, you know, first or second contact, 126 00:09:58.000 --> 00:10:03.600 you might sell 5%. But for this particular type of sale that they had, which was a two-call close, 127 00:10:03.600 --> 00:10:08.000 for like, I would say a mid-priced consumer service, in my opinion, they should have been about 40%. 128 00:10:08.000 --> 00:10:14.000 So 40% is what I wanted them to be at. And then current was 27%. So this is where they were. 129 00:10:14.000 --> 00:10:19.200 This is where we wanted them to be. And again, for context here, this is about a 50% improvement. 130 00:10:19.200 --> 00:10:23.760 Don't be fooled with small numbers. If the status was to be 10% and you're at 7%, you're like, 131 00:10:23.760 --> 00:10:27.760 well, we're pretty close. It's like, dude, you're 30% off. Right? Actually, 132 00:10:27.760 --> 00:10:32.240 shit, you're more than there, 50% off because half of 7 is 3.5. I don't get into the math for you. 133 00:10:32.240 --> 00:10:35.680 So problem number one is that they had service level discovery. And if you're not familiar with 134 00:10:35.680 --> 00:10:39.200 that terminology, in a sales script, there's different kind of phases that you go through in a 135 00:10:39.200 --> 00:10:43.760 conversation. And the opening part is often a little bit of rapport. And then right after that, 136 00:10:43.760 --> 00:10:47.760 you get into discovery. And discovery is where you're discovering what the problems that the 137 00:10:47.760 --> 00:10:51.840 person is going through. You're trying to understand why they are, where they are, why they're on the 138 00:10:51.840 --> 00:10:55.520 phone with you, why they decided to take time out of their day, why this problem is important to 139 00:10:55.520 --> 00:10:58.720 them, what they've tried in the past, et cetera, et cetera. Right? This is the discovery. 140 00:10:58.720 --> 00:11:02.720 This gives you all the ammunition that you're going to use at the end of the sale to close it. 141 00:11:02.720 --> 00:11:05.840 So the way that they were doing was simply saying, how much money do you want to make? 142 00:11:05.840 --> 00:11:10.640 Just asking the one question, which is the big obvious question. It's surface level. 143 00:11:10.640 --> 00:11:15.120 But the big thing that you always want to ask when you're selling is intention. Is why do they 144 00:11:15.120 --> 00:11:20.080 want this? Like, what changes as a result of this? How will your life look different? What can 145 00:11:20.080 --> 00:11:24.400 you not do now that you would be able to do as a result of this change? Right? Who else in 146 00:11:24.400 --> 00:11:28.480 that in your life would that affect? Why does that matter to you? Right? So these are all 147 00:11:28.480 --> 00:11:33.600 why questions. And it's to dig up their intentions. Because if you can understand why someone's 148 00:11:33.600 --> 00:11:38.960 there, it's much easier to get them to agree to getting them there. Right? But if you don't know 149 00:11:38.960 --> 00:11:46.160 that someone's trying to, let's say, replace their income versus quit their job versus just have 150 00:11:46.160 --> 00:11:50.640 side hustle money. Those are very different intentions. If I want to talk to side hustle money, 151 00:11:50.640 --> 00:11:54.960 I'm probably not going to be like, this is going to take a ton of time. Right? On the flip side, 152 00:11:54.960 --> 00:12:00.160 if someone's like, I hate my job, I just want to do something that's not this, then I might talk 153 00:12:00.160 --> 00:12:04.560 about what the day to day looks like in this scenario and ask them if that sounds better to them. 154 00:12:04.560 --> 00:12:11.360 And so if you think about sales process, what they were doing is they were asking questions 155 00:12:11.440 --> 00:12:16.640 that were here, service level. But this is where all the meat is. And that's where all the money is, 156 00:12:16.640 --> 00:12:20.480 is the questions that are below the surface is understanding why someone's even doing this to be 157 00:12:20.480 --> 00:12:24.640 in with. Look at that iceberg, fucking killer iceberg. And so the second issue is that they had a lot 158 00:12:24.640 --> 00:12:29.280 of objections coming up on the call. I'll say objections, but I also mean obstacles for those of 159 00:12:29.280 --> 00:12:34.320 you who are sales, sales sensees. Objections happen after you talk about the number obstacles 160 00:12:34.320 --> 00:12:38.000 happen before you talk about the number. If you come on the phone and I say, Hey, why are you here? 161 00:12:38.000 --> 00:12:40.640 And you're like, I just want to find out more information. That's actually an obstacle. 162 00:12:40.640 --> 00:12:43.520 Like you already have to confront that because like, no, you're not hopping on phone calls already 163 00:12:43.520 --> 00:12:47.520 trying to find information. We'll probably try to solve. And then they're like, well, and then you 164 00:12:47.520 --> 00:12:51.280 get into it, right? But if you don't address that up front, it'll blow up on you in the close. So 165 00:12:51.280 --> 00:12:55.360 objections and obstacles is what they were encountering a lot of. And part of that is because 166 00:12:56.320 --> 00:12:59.760 their discovery was wrong, right? They were talking to service level. So then lots of shit was 167 00:12:59.760 --> 00:13:04.960 blowing up on them in the close. Common objections that happen after you present price is this is too 168 00:13:04.960 --> 00:13:09.120 much. I need to think about it. I have to talk to my spouse. I'm not sure if this is for me. 169 00:13:09.120 --> 00:13:13.120 I'd like to get more data. Can you send me a brochure? Like these are all just to make believe 170 00:13:13.120 --> 00:13:18.560 things that people will say in order to not buy from you. And interestingly, a lot of times, 171 00:13:18.560 --> 00:13:22.400 if you stay in the service level, they'll even give you what we call smoke screens. But basically, 172 00:13:22.400 --> 00:13:26.800 they'll just come up with a reason that they're not going to do it. And it's not even the reason. 173 00:13:26.800 --> 00:13:32.240 They just throw a smoke bomb up and they're like, I don't like English. You know, walk away, 174 00:13:32.240 --> 00:13:35.120 right? It has nothing to do with it. They just want to get off the phone, right? So those are the 175 00:13:35.120 --> 00:13:40.800 two issues that we had on the sales. And that was getting us to this 27% close rate. And what this 176 00:13:40.800 --> 00:13:46.400 looks like is lots of argumentation and like hard closing. And it's because the sales have 177 00:13:46.400 --> 00:13:52.160 positioned properly and they were basically talking at people and not listening. If the sales 178 00:13:52.160 --> 00:13:56.400 person is talking more than the prospect in your sales, like these are likely issues that are 179 00:13:56.400 --> 00:14:02.240 coming up. I'm going to give you two examples real quick to show you how important delivery of 180 00:14:02.240 --> 00:14:07.440 a message is. So if I say, I have to think about it. And I say, Oh, like, what are your main concerns? 181 00:14:07.440 --> 00:14:10.560 Or what are the main, like, what are the main variables that you're considering? You're not thinking, 182 00:14:10.560 --> 00:14:15.520 wow, this guy's a douchebag. I sound like I just genuinely want to know. I call it childlike 183 00:14:15.520 --> 00:14:20.960 curiosity. And I use, I always cue it by tilting my head. I'm like, huh, what are the main things, 184 00:14:20.960 --> 00:14:25.520 right? Like, and I would, and I would increase my voice at the end there. And improperly train sales 185 00:14:25.520 --> 00:14:29.680 person might be like, well, what are the main concerns you have? And all of a sudden, 186 00:14:29.680 --> 00:14:32.880 that sounds like a very different thing. So they're saying the script, but the prospect isn't 187 00:14:32.880 --> 00:14:37.040 here in the same message, right? And these are little details that actually make a huge difference 188 00:14:37.040 --> 00:14:41.920 in ultimately how you close. There's a lot of things in tone, but I'll just say one is how you 189 00:14:41.920 --> 00:14:47.520 raise or lower your voice. And the second is where you choose to emphasize. If I say, I didn't say 190 00:14:47.520 --> 00:14:53.920 hit his wife. Now, if I say like that, I have neutral tone. If I say I didn't say hit his wife, 191 00:14:53.920 --> 00:14:58.720 then it's like, I'm not saying that. I didn't say he hit his wife. It's now saying that like, 192 00:14:58.720 --> 00:15:04.400 those weren't my words. I didn't say he hit his wife. It's saying he's the one to question. 193 00:15:04.400 --> 00:15:07.920 I didn't say he hit his wife. It means like he might have done something else, but he did 194 00:15:07.920 --> 00:15:12.320 something to his wife. I didn't say he hit his wife. It could have been somebody else's. I didn't 195 00:15:12.320 --> 00:15:16.480 say he hit his wife. It might have been his kid, right? And so it's the same sentence, but simply 196 00:15:16.480 --> 00:15:20.960 emphasizing different parts of it, communicate different things. And so the tone and emphasis 197 00:15:21.040 --> 00:15:25.120 create a altogether package of how we communicate. And for them, their tonality was way off 198 00:15:25.120 --> 00:15:29.280 as a team because they were missing the first five minutes of discovering and setting the frame 199 00:15:29.280 --> 00:15:36.480 properly. And so I'll give you the last set of problems. Hopped to do this for improvement. 200 00:15:36.480 --> 00:15:38.560 And then we'll dive into what we did to solve them and what happened. 201 00:15:40.480 --> 00:15:46.640 Still problem three, opportunity for improvement. People and org structure issues. 202 00:15:46.720 --> 00:15:53.360 So issue number one is that CEO was the sales manager. And that was because he was the 203 00:15:53.360 --> 00:15:58.960 best closer. He had a significantly higher close rate than the rest of the team, but 204 00:16:00.160 --> 00:16:03.840 he wasn't a very good sales manager. Even though he was a good closer, by the way, 205 00:16:03.840 --> 00:16:07.360 that's one of the main issues that a lot of sales teams have. They promote their best closer 206 00:16:07.360 --> 00:16:12.000 as the sales manager. And oftentimes those are two very different skills. And we could see this 207 00:16:12.000 --> 00:16:16.320 because the churn on their sales team was through the roof. Just to be clear, they were a 208 00:16:16.320 --> 00:16:21.440 group of young founders. It's not uncommon because usually when you start a business, learning how 209 00:16:21.440 --> 00:16:24.880 to promote and sell the product is usually the job of the founders. Like how do I get people to 210 00:16:24.880 --> 00:16:28.720 want to buy the thing? And so they end up getting the most reps early on and also understanding 211 00:16:28.720 --> 00:16:32.800 the prospect better than just about anyone. And so one of the big things, you guys have 212 00:16:32.800 --> 00:16:37.600 a little mini sales lesson today, is that companies will over educate on the product and 213 00:16:37.680 --> 00:16:41.920 under-educate on the prospect, right? The person that you should be educating yourself on is who 214 00:16:41.920 --> 00:16:47.600 we're talking to more than what we're selling. Because for me, if I know someone deep in their 215 00:16:47.600 --> 00:16:52.160 core, what their intentions are, I can tell them anything. I know someone inside and out and then 216 00:16:52.160 --> 00:16:56.160 someone says, sell this thing. And I know nothing about it. I could probably get them to buy. 217 00:16:56.160 --> 00:16:59.520 On the flip side, I know everything about this thing and I don't know when I'm talking to. 218 00:17:00.080 --> 00:17:04.880 Talking to a child, a man, a woman, you know, old, young, different language. Like, 219 00:17:04.880 --> 00:17:08.640 you're almost being possible. And so a lot of people talk like, hey, sell me this pen. When in 220 00:17:08.640 --> 00:17:14.240 reality, what we want to do is like talk to John, the majority of good sales trainers who try to 221 00:17:14.240 --> 00:17:19.280 do that gimmick, what they want the person to do is ask them a question. It actually has nothing to 222 00:17:19.280 --> 00:17:23.440 do with the pen. And so if they say, sell me this pen, what you do is you take the pen and you put 223 00:17:23.440 --> 00:17:28.480 it in your pocket and you say, how's it going? Well, brought you in today, right? Because I got to 224 00:17:28.480 --> 00:17:33.040 go from where they're at to wanting a pen. I'm not going to just be like, hey, buy this pen, 225 00:17:33.040 --> 00:17:37.440 give me money. It doesn't work that way. But bad salesmen do. So the second issue was the 226 00:17:37.440 --> 00:17:41.280 setting team expectations. One of the benefits of working with someone who has more experience 227 00:17:41.280 --> 00:17:45.040 is that we know what the benchmarks should be. And so a lot of times we can reset someone's 228 00:17:45.040 --> 00:17:48.560 minimum standard. And they're like, well, they're setting two a day and we're like, they should 229 00:17:48.560 --> 00:17:54.480 all be minimum setting three. And that sounds tiny. But again, two to three is a 50% increase in 230 00:17:54.480 --> 00:17:58.560 sets. And that's across the whole team. So that means a lot of productivity. But if you set the 231 00:17:58.560 --> 00:18:03.040 bar low, people will just naturally shrink down to that level. All right. So you understand the 232 00:18:03.040 --> 00:18:07.680 problems. And here is the data. This is before they had a low show rate issue. They had low 233 00:18:07.680 --> 00:18:11.200 flows rate and multiplicities around that. And they had people in organizational issues. So I want 234 00:18:11.200 --> 00:18:14.560 you to pause real quick. And you're like, what would you do? How would you attack these issue 235 00:18:14.560 --> 00:18:18.880 if this was your business? And then I'll tell you what we did. Now, there's two elements. The 236 00:18:18.880 --> 00:18:23.840 solutions element one is what would you do to attempt to solve the problem? And the second is, 237 00:18:23.840 --> 00:18:28.400 which one do we do in what order? The third problem, that was actually the first thing we decided 238 00:18:28.400 --> 00:18:33.520 to fix. We said, we hired a sales director. And the reason for that was because the CEO was 239 00:18:33.520 --> 00:18:37.840 overly involved. He was micromanaging. He wasn't a good manager and he also wasn't doing CEO stuff. 240 00:18:37.840 --> 00:18:42.080 And so we had to hire an experienced sales director, who in this instance had been a sales trainer 241 00:18:42.080 --> 00:18:47.200 for a similar type of sale and a consumer good. This guy ended up being exceptional and being 242 00:18:47.200 --> 00:18:51.360 able to implement the rest of the changes that we outlined. So this was in terms of order of 243 00:18:51.360 --> 00:18:55.200 importance. I think if we hadn't done this and had tried to do the rest of them, it would have fallen 244 00:18:55.840 --> 00:19:01.280 flat. This is like one of the most common errors that business owners and founders make is that 245 00:19:01.280 --> 00:19:06.400 they see the what and not the who or they focus on the how and not the who. And if you have the same 246 00:19:06.400 --> 00:19:11.360 problem that has recurred multiple quarters in a row in the same department underneath of the same 247 00:19:11.360 --> 00:19:16.720 who, it might not be a what issue, it might be a who issue. One of the reasons having experience 248 00:19:16.720 --> 00:19:21.760 is helpful is because you know what it looks like when it's right. And some of the biggest costs 249 00:19:21.760 --> 00:19:26.480 in the business are hiring incorrectly. You waste the time trying to find them. You waste the time 250 00:19:26.480 --> 00:19:30.080 onboarding them and training them. And then you waste the time of all the time it takes you to figure 251 00:19:30.080 --> 00:19:34.400 out that they're not the right fit and all the lost growth that you would have had to then start 252 00:19:34.400 --> 00:19:38.400 that process over again. That's tough. But a lot of businesses have to do with that, which is why 253 00:19:38.400 --> 00:19:43.360 picking personnel is so important. With this instance, we looked at culture fit, which is like, 254 00:19:43.360 --> 00:19:46.720 do we think that this guy will fit in, which we usually the founders picked out part out like, 255 00:19:46.720 --> 00:19:51.280 hey, does this guy fit in cool. And then we're going to hardcore drill on usually experience. And 256 00:19:51.760 --> 00:19:56.800 tactical knowledge. And so we have subject matter experts at Holdco, like MediaBuy, CRO experts, 257 00:19:56.800 --> 00:20:01.280 sales experts, finance experts, whatever. And we will then do tactical interviews. We talked about 258 00:20:01.280 --> 00:20:05.280 earlier, you can know that someone who's good based on the quality and quantity of the data that 259 00:20:05.280 --> 00:20:09.600 they collect. And so I would ask somebody, what data do you plan on collecting and how would you 260 00:20:09.600 --> 00:20:14.080 plan on fixing those things? Based on how vague they are and how high level they go in terms of their 261 00:20:14.080 --> 00:20:18.240 solutions, it'll tell you how nuanced they can be in their thinking and ultimately executing 262 00:20:18.240 --> 00:20:23.520 solutions. Sales director specifically, in my experience, when I have guys who are like, I just 263 00:20:23.520 --> 00:20:28.080 want to build up people, I want to give these guys skills. And they marry that with like, 264 00:20:28.080 --> 00:20:31.760 in these are the metrics that I track to know X, Y and Z. That's a good sales director. 265 00:20:31.760 --> 00:20:37.200 The next thing we decided to solve, boom, was fixing the ad targeting. And the reason we did the 266 00:20:37.200 --> 00:20:41.200 sales director first was because we're like, well, how do we know if anything else is going to 267 00:20:41.200 --> 00:20:45.680 happen afterwards if we fix this? And so what we ended up doing here, it turns out is that we also 268 00:20:45.680 --> 00:20:49.680 had another personnel issue. The media buyer was asleep at the wheel. They were optimizing around 269 00:20:49.680 --> 00:20:52.800 the wrong stuff. They were trying to split their attention and start their own side hustle. 270 00:20:52.800 --> 00:20:56.720 It was clear that they were negligent. They actually were doing the right thing and then they 271 00:20:56.720 --> 00:21:01.200 stopped doing the right thing. And it was clear that that type of behavior the founders felt was 272 00:21:01.200 --> 00:21:05.920 not going to correct itself. And so they let go of that person, hired a new person and boom, 273 00:21:07.040 --> 00:21:11.120 fixed the ad targeting problem. We were back to 25 to 35 real people who love their job. What did we 274 00:21:11.120 --> 00:21:17.760 fix next? Boom. We reduced the sales team. What? And we reset expectations for the setting team. 275 00:21:17.760 --> 00:21:21.680 We reduced the sales team. What we looked at is sales team utilization. If we know that guys can 276 00:21:21.680 --> 00:21:25.920 take 10 sales a day and they're actually only taking four, then we have too many sales people. 277 00:21:25.920 --> 00:21:31.440 And in this instance, it gives you an opportunity to cut the fat for lack of literature and reward 278 00:21:31.440 --> 00:21:35.920 the people who are actually doing their jobs and closing well. If you cut the lowest percent of 279 00:21:35.920 --> 00:21:41.120 the team and you have utilization like you have space, you lose the lowest closing percentage 280 00:21:41.120 --> 00:21:46.800 people and you gain more closes just by shifting the closing rate overall of the team. 281 00:21:46.800 --> 00:21:51.920 When you make those changes, in my experience, sales people get into a rhythm. If you don't take 282 00:21:51.920 --> 00:21:57.600 enough sales calls, you're too desperate to close the deal and then you start being too hard 283 00:21:57.600 --> 00:22:01.600 and not listening enough because it's about you not them. When sales people have more and more 284 00:22:01.600 --> 00:22:05.280 consults, they sell from the back of their heel. They're open-minded. They're asking questions. 285 00:22:05.280 --> 00:22:10.720 They're feeling good and they get into rhythm. The setting team, we both downsized and increased 286 00:22:10.720 --> 00:22:14.800 expectations. And you're like, how is it all these sales increased by having fewer people? We 287 00:22:14.800 --> 00:22:19.680 had better people. That's how. And that also helps recreate the culture of the team so that we can 288 00:22:19.680 --> 00:22:25.120 have a new standard set of high performers because there's nothing that demotivates a high performer, 289 00:22:25.120 --> 00:22:29.680 like a low performer, who's still on the team. And so we went from two to four in terms of our 290 00:22:29.680 --> 00:22:34.800 expectation per day for the team in terms of sets. Sales fix, new window, quarter roll. 291 00:22:36.800 --> 00:22:41.520 Oh yeah, I'm missing all my columns up now. It's going to have to deal with it. So we promoted one 292 00:22:41.520 --> 00:22:45.120 a setter to lead nurture specialist. I was saying earlier that they were multitasking, right? So 293 00:22:45.120 --> 00:22:48.720 they're doing some setting and they're doing some lead nurture. And that gets really hard for a team 294 00:22:48.720 --> 00:22:53.440 of six guys to split those things. We took one of the setters who was really good and made that 295 00:22:53.440 --> 00:22:57.680 person the lead nurture specialist who basically acted as the bridge for both the setting team 296 00:22:57.680 --> 00:23:01.280 and the closing team to basically coordinate and remind the people of their appointments. And we 297 00:23:01.280 --> 00:23:05.520 equipped that lead nurture specialist with one of our checklist for what that role needs to do 298 00:23:05.520 --> 00:23:08.640 to get the most people to show up. And I'm not going to give you all because of the long checklist. 299 00:23:08.640 --> 00:23:12.320 But I'll give you two quick examples. One of them is doing a three-way intro once you have 300 00:23:12.320 --> 00:23:16.800 this set appointment between the setter and the closer and doing a via iPhone if you can. Because 301 00:23:16.800 --> 00:23:21.200 now you have a known person and an unknown person and a person that bridges the two. They might 302 00:23:21.200 --> 00:23:26.000 no show on Johnny over here, but not on the guy that they just spoke with. And so the idea is how 303 00:23:26.000 --> 00:23:30.560 can I bridge that gap and kind of make the association for them at some trust. The other thing is 304 00:23:30.560 --> 00:23:36.800 that the closers morning of would remind them with either a voice memo or a video text personalized 305 00:23:36.800 --> 00:23:41.040 to them. You're like, Hey, John, really excited for our appointments today. I saw your profile. 306 00:23:41.040 --> 00:23:45.120 XYZ personalized to you. I'm really pumped for it. I think we might be able to help you out. So 307 00:23:45.120 --> 00:23:48.720 that's just a couple of things that we have on that list that we had them implement and all do 308 00:23:48.720 --> 00:23:54.720 consistently. And sales team fixed number five. Boom. Is we optimized the sales script? I said earlier 309 00:23:54.720 --> 00:23:59.120 that the discovery was two service levels. So we re-scripted the discovery, made sure we were 310 00:23:59.120 --> 00:24:04.080 asking deeper, more meaningful questions. And a part of that is also bringing some of the objections 311 00:24:04.080 --> 00:24:09.440 to the front. It's much easier. And this is the terminology that our team uses, which is killing 312 00:24:09.440 --> 00:24:13.360 zombies, right? But a lot easier to kill a zombie when it's far away than when it's on top of you, 313 00:24:13.360 --> 00:24:17.680 right? And so if somebody's trying to bring up a zombie in the close, another way of saying it is 314 00:24:17.680 --> 00:24:21.760 like you want to diffuse the bomb before it goes off in the close in your face. So we solved the 315 00:24:21.840 --> 00:24:25.600 problem before we bring it up. Now, this is actually something that we added to this part of the 316 00:24:25.600 --> 00:24:29.760 script, which is prior to the appointment, we say, Hey, is there anyone else who'd be required to 317 00:24:29.760 --> 00:24:33.680 make a decision about this thing? If they say yes, then you say cool. Well, let's push back the 318 00:24:33.680 --> 00:24:38.480 appointment. Let's get that person on, right? That way you have all the decision-makers present. So 319 00:24:38.480 --> 00:24:43.520 these are just little things, but like little 1% improvements over and over over again is what 320 00:24:43.520 --> 00:24:49.520 yield these 50% boosts. And the third main change we did was that we drilled the team on looping. 321 00:24:49.520 --> 00:24:56.000 And looping is just a sales terminology for basically when you encounter an objection, handling 322 00:24:56.000 --> 00:25:01.120 the objection, and then asking again, handle the objection, ask again, right? Because a lot of sales 323 00:25:01.120 --> 00:25:04.960 people are afraid to ask if someone says no, and they don't want to ask again, right? And I can tell 324 00:25:04.960 --> 00:25:09.040 you this is that the number of sales you make is direct proportional to how many times you ask. 325 00:25:09.040 --> 00:25:12.800 There's ways to do it wrong, and there's ways to do it right. The idea is that you should be able 326 00:25:12.800 --> 00:25:17.760 to resolve the concern, right? So if someone says, uh, I need to think about it and you say, well, 327 00:25:17.840 --> 00:25:22.720 what are your main concerns, right? And they say, well, uh, it seems really complicated. 328 00:25:22.720 --> 00:25:27.040 And you say, oh, what part specifically feels more complicated? They're like, it's the whole tech 329 00:25:27.040 --> 00:25:30.720 thing. And we're like, oh, we also have a vendor that can actually fill that in. I think it's a 330 00:25:30.720 --> 00:25:35.200 couple box extra, but like we can just handle that for you. Does that solve the problem? And they're 331 00:25:35.200 --> 00:25:39.040 like, oh, okay. So you guys will, you guys just handed that one part of it. Like, yeah, we 332 00:25:39.040 --> 00:25:44.560 handed that part of for you. Cool. Now this is where the salesman says, great. So what's up? 333 00:25:44.560 --> 00:25:47.760 Like, you want to move forward? Hey, like, do you have your idea on you? Hey, well, 334 00:25:47.760 --> 00:25:52.320 gradually, like, you can just make the ask right after that. And so then at that point, you might say, 335 00:25:52.320 --> 00:25:57.600 hey, ready to move forward then? And they might say, well, this feels like a fast decision. 336 00:25:57.600 --> 00:26:01.440 It's like, oh, well, what makes it fast? How long you been thinking about this? They're like, 337 00:26:01.440 --> 00:26:04.880 well, I mean, I just met you and you say, well, how long have you wanted to solve this problem? 338 00:26:04.880 --> 00:26:08.080 And then they would say, well, I mean, a long time. It's like, well, then it doesn't sound like a 339 00:26:08.080 --> 00:26:11.120 fast decision at all. If it sounds like you've already made the decision a long time ago, 340 00:26:11.120 --> 00:26:16.240 you want it to change. Now we're just acting on it. They're like, so now you want to move forward, 341 00:26:16.240 --> 00:26:20.560 right? Keep looping and continuing to resolve the concern, ask again, resolve the concern, 342 00:26:20.560 --> 00:26:28.560 ask again. So drum roll, please. What happened in the real world? So let's go to the data. All right, 343 00:26:28.560 --> 00:26:35.680 so in our first column, we had 49% show rates. And after we implemented sales fix two fixing the 344 00:26:36.400 --> 00:26:41.360 sales fix four, promoted one lead center to lead nurture specialist. And sales fix three, 345 00:26:41.360 --> 00:26:49.360 reduce the team size and reset expectations, survey says you get a 70% boost, which is almost 346 00:26:49.360 --> 00:26:55.760 exactly the KPI. And that's because when you do things that work, they work. All right, so that was 347 00:26:55.760 --> 00:27:00.240 a 40% improvement in sales. And to be clear, this was just over two months. All right, so some of these 348 00:27:00.240 --> 00:27:04.240 changes can happen real quick if you know what you're doing. All right, the second change we had 349 00:27:04.240 --> 00:27:10.320 is our offer rate. And so here's what happened. Survey says 80%. We actually offered just about the 350 00:27:10.320 --> 00:27:14.240 same amount of people, the offer, but what will what I will say changed is that the people were 351 00:27:14.240 --> 00:27:17.920 getting on the foot. Now realistically, what they were doing is offering people to work qualify 352 00:27:17.920 --> 00:27:21.520 because the sales you wanted to eat. And I get that. Like there's a human component here. They 353 00:27:21.520 --> 00:27:25.840 were offering people were not qualified. The deal because they needed commissions, right? Which is 354 00:27:25.840 --> 00:27:32.800 what we were trying to fix with the target. Now close rates survey says we went from 27% and 355 00:27:32.800 --> 00:27:41.360 60 days later, we were at 41%. So 1% above our benchmark. All right, this is a 50% improvement 356 00:27:41.360 --> 00:27:46.560 in sales. So 40 and 50 because they know next up, we have percentage of cash collected, 357 00:27:46.560 --> 00:27:50.560 a really good metric for knowing how strong the sales team in it. And this is especially important 358 00:27:50.560 --> 00:27:56.000 for that early discovery portion and how good they are at looping and closing because the deeper 359 00:27:56.000 --> 00:28:01.920 you get the discovery, the more convicted the buyer will be about the solution and the more likely 360 00:28:02.000 --> 00:28:07.280 they are to pay up front as a measure of their conviction in the solution. So survey says we 361 00:28:07.280 --> 00:28:14.800 went from 47 to 82%. So we almost doubled the amount of cash that we were collecting up front 362 00:28:14.800 --> 00:28:20.320 car sale in 60 days. Think about this. We had a 40% improvement and we had a 50% improvement, 363 00:28:20.320 --> 00:28:27.360 right? And we had a almost doubling of cash collected. So if we almost doubled the amount of 364 00:28:27.360 --> 00:28:32.640 sales that happened and we almost doubled the cash up front collected, what do we do to the 365 00:28:32.640 --> 00:28:42.080 cash for the business? Forexed. Much more enticing, right? And so after we added all these four 366 00:28:42.080 --> 00:28:49.200 changes together and we waited 60 days, what happened? Survey says we went from 56 to 93 sales 367 00:28:49.760 --> 00:28:56.720 a month, right? And that was just from a few of these fixes on one particular part of the organization. 368 00:28:56.720 --> 00:29:01.280 You can still apply all of these things to the upsell percentages on the back end. You're going to 369 00:29:01.280 --> 00:29:05.280 apply this to how you're creating ads, how you create the landing pages, how you make content, 370 00:29:05.280 --> 00:29:09.920 how you do outbound, the scripts that use all of these elements can be improved, but they take 371 00:29:09.920 --> 00:29:14.800 a hundred golden BBs and not one silver bullet. And you might think after we made all these changes 372 00:29:14.800 --> 00:29:20.560 that weren't done, we ride off into the sunset, but wait, there's more. There were even more problems 373 00:29:20.560 --> 00:29:30.560 in the business on the product and customer success side, which we will get to in the next.