Becoming High Performance and Building A Sales Machine

Below you’ll find the first ever “guest re-post” on Life-LongLearner as well as a new podcast with my buddy Ryan Denehy. The post + podcast combo effectively  makes this a Denehy centerfold.

Ryan-Denehy

Ryan is a close friend who most recently co-founded Swarm Mobile which was acquired by Groupon. In the podcast episode, we riff on the mental and emotion journey of getting there. In the post, you’ll see all the things he learned building the local sales machine that fueled their growth.

Enter Sensai Denehy….

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“Building A Startup Sales Machine: 64 Things I Wish I Knew”

Newsflash: I had no idea what I was doing when I first started running sales and distribution teams almost 10 years ago. Some would argue that I still don’t. But the hard lessons taught me more than anything I ever did correctly on the first attempt.

Lately, a number of folks have been asking me for advice on sales-related topics so I thought it’d be fun to put down 40 or 50 things I’ve learned that I wish I had known over the years. My pain is your gain.

Most of what’s here is relevant to angel/seed stage companies, and some is applicable to a scaled company looking to hone a new strategy. This is just a rough first pass but hopefully someone out there finds it useful!

Getting Started

1. Everything is an infuriating catch-22 – getting your product and team off the ground is a series of tasks with missing ingredients. “I can’t get money from investors until I have customers, I can’t get customers until I have money to build a product.” Blah blah blah. You’ll never have what you need so just accept that. It’s your job as an entrepreneur to figure out how you’re going to spin something real out of thin air.

2. When the pitch doesn’t work you will feel hopeless – in the early days you hit endless cold call and cold pitch cycles to figure out what’s going to work. During that time you’ll get nowhere and have very little motivation to continue. This is totally normal.

3. When the pitch resonates, you will know right away – some interns and I cold called hundreds of small businesses trying different pitches and value props. We were banging our heads against the wall for weeks without getting a single sale. After two months we finally nailed the script and the sales started tumbling in. More sales in two days than in the past two months.

4. If the product doesn’t respond to an existing need (e.g. credit card processing) or deliver phenomenal, game-changing results (e.g. Groupon, Yelp) then you’ll need to shove it down the customers’ throat – this isn’t necessarily a bad thing if the product delivers real value, but selling something that people don’t actively want or need can be an abrasive and challenging road to go down.

Product Market Fit

5. Local sales is all about distribution and it’s really really hard – in general, selling to SMBs is capital-intensive and involves a lot of manpower (think stateside call centers). You have to get the small business owner on the phone and that alone is really tough. Making a product they are willing to pay anything for is even harder. Making a product they will pay for that can support a direct sales team is harder still.

6. The enterprise sales cycle is typically longer than your runway – meaning, as an early stage company you will run out of money before your clients start paying you.

7. Enterprise products are typically too complex and costly to build on an angel or seed-stage budget – start down-market first since you can always move up. It’s rare to start upmarket and successfully move down.

8. Bark up the right tree – it’s important to be 100% clear who your ideal outbound prospect is before making contact and crafting a pitch. Your best bet is to craft a pitch for two to three different potential decision makers (e.g. marketing, operations, owner) and see what sticks.

9. Don’t confuse product benefits with existing demand – just because your product can theoretically create value for the customer does not mean that there’s demand for it. Take for example loyalty and rewards platforms for small businesses. Yes, every merchant wants to increase customer loyalty and can benefit from that, but the market as a whole is not actively seeking out these solutions every day.

10. Look at search volume on Google to gauge organic demand – Google makes it easy to look up search volume for different terms in different geographic markets. This is a simple and free tool to see if folks are already searching for the solution that you want to provide.

11. Is your product already on the “shopping list?” – point of sale, wireless networking, CRM, loss prevention, HR software, payroll etc.. budgets already exist for these solutions and therefore the sales process comes down to getting a crack at the business. Eventually the head IT or CMO is going to buy something. With entirely new technologies and solutions….you guessed it….budget don’t exist. Dollars you could spend getting a prospect over the line will instead be spent convincing your prospect that they need it in the first place.

12. Pre-selling is effective but dangerous – pre-selling is when you sell a product that you haven’t built yet, then build it after you’ve closed sales or validated the demand. Some people call this “vaporware” or “slideware.” That’s OK. Pre-selling allows you to prove the product/market fit without wasting dev cycles and cash building stuff that people don’t want to buy. Done correctly you will accelerate your speed to market and achieve significant cost savings. More often than not though companies screw this up. Now you’ve got pissed off clients, no credibility and no product.

13. Start with extremely small markets first, and dominate them – when you have a product with seemingly broad appeal you’ll be tempted to sell nationwide, or to move into multiple verticals. This works if you’re a well-resourced company but in general it’s best to identify the smallest market where you can have success and knock that shit down. You’ll find that your efforts in a constrained market have a force-multiplier effect: word of mouth becomes a lot more effective, PR happens organically, and your product team can stay focused on a single set of narrow challenges. Once you dominate there you can expand geographically or by category or both.

Lead Generation

14. Inbound leads eventually dry up – constantly invest in new lead generation strategies to prepare for the day when your existing lead sources run out.

15. Running multiple acquisition channels is like running two separate businesses – if you’re an inbound sales organization looking to get an outbound strategy off the ground, be prepared to run this as a separate team with a separate budget and CAC.

16. Don’t blend CAC across acquisition channels – for example, outbound cold-calling can be really effective but you can’t factor in your inbound marketing expense. If you do you’ll get an insane CAC and your CFO will shut it down : (

17. Outbound sales is the only way to have 100% control of your destiny – acquisition channels like inbound or referral will eventually plateau and then you are screwed. Building a process whereby you go out and get the customers in a repeatable manner is the only way to control your revenue growth over the long term.

18. Closers need leads too – common misconception that hiring great closers will create significantly more sales. This won’t work without leads.

19. Tradeshows are a waste of money – well, at least until you can quantify how many decision makers in your target market will be there and the anticipated conversion rate. The fully-loaded cost includes your time out of the office, marketing materials and travel expenses. Closed sales from tradeshows typically don’t cover these costs.

20. Traveling in general is a waste of money – unless you’re selling to large enterprises that require face-to-face meetings you should avoid leaving your office. In many cases you should be able to get to your first $1-3MM in revenue without hopping on a plane.

TEAM

21. Do the job yourself – you can’t start delegating or effectively managing until you’ve done all the jobs yourself. Cold calling sucks but you just need to do it. Packing and shipping boxes sucks. But you need to do it.

22. Keep your comp plan brain-dead simple – nobody will be motivated to sell if they don’t clearly understand how they get paid. You should be able to ask every rep to explain their commission in two to three sentences or less.

23. There is nothing scarier than a sales team with no leads – just sitting there, f*cking around at their desks with nobody to call. Nightmare! Don’t scale the team until you have the lead-gen to support the headcount at least 6 months out.

24. Opportunity creation is key – how many opportunities are the reps creating weekly?

25. Any customer interaction role in your company is a great “farm team” for cultivating new salespeople.

26. Don’t build out the team too early – I have challenged all of my assumptions HARD before hiring. I thought we were selling to the enterprise and a few initial pilot agreements told me that I was right. We were even about to make a CRO hire. After pinging over 1,000 enterprise prospects to double-verify my assumptions it became clear that we actually did not have an enterprise product.

27. Don’t hire great salespeople to be managers – I did this at Swarm and it worked, but generally this tactic fails. The best salespeople trained by the best managers will often want to join a startup and build the sales team. The problem is that managing people and closing business are two completely different skill sets.

28. People tend to leave managers not companies – managing through motivating is all about keeping your team engaged and mapping their career path. Even if you have no clue how your company is going to make it to the end of the year (your team obviously can’t know that) you need to work one on one to develop an individual path from entry level sales hustler to team lead, to manager, to director and so on. This will change over time but you have to start somewhere and give your team a career roadmap to work toward.

29. People leave managers because they’re not growing professionally and their manager is a dick – so don’t be a dick and invest in the training and education of your team on a regular basis.

30. Reflect on success and failure – rather than saying “close more sales” or “make more calls” dive deep into why your best reps are succeeding and why others aren’t.

31. Sales team attrition is high so get used to it – even in large companies like Oracle 25% yearly attrition is common for sales. In 2013 Salesforce had 3,000 salespeople and LOST 700 in the same year. Your early-stage startup will likely see turnover that’s even higher than that. It’s important to just accept it and condition the rest of your team so that they don’t freak out and think your company is a revolving door. Proactively manage the psychology of your entire company so that morale stays high.

32. No generalists! – once you have two or three people on your sales team it’s important to separate out the different functions. For example: lead gen, pitching/closing and account management are three completely different jobs, with different KPIs and different required skillsets. A closer who’s spending half their day managing existing accounts won’t close nearly as much business as they possibly could. And someone who’s better suited for an account management role trying to close is a waste of time. Teams as small as two can separate functions and start realizing some efficiencies.

33. Discipline is everything – a young inside sales team bears more similarity to pop-warner football than a Fortune 500 company. Establish daily start times, weekly status meetings, rewards/consequences, and a metrics-driven culture. You cannot scale if your team trickles in at9am or asks to work from home.

34. Ban working from home or remote for inside sales – this really only applies to inside sales. It runs counter to the startup “campfires and koombaya” culture but the reality is, nobody is working with the same intensity when they are sleeping in, throwing in a load of laundry and texting with their friends.

35. Recruiting takes a lot longer than you think – plan on a solid 2-3 months to get job postings up, interview, make offers, get turned down and rinse/repeat until you have the right folks.

36. Employee referrals almost always yield the highest quality candidates.

37. Always be recruiting – every happy hour, industry event, whatever. Constantly plant the bug in people’s ear that you are hiring and want the best people to come work for you. Until you start annoying everyone you are not advertising your desire to hire great people hard enough.

38. Consultants rarely work out – but you will probably end up hiring one. and the most important thing is to look at your full funnel and say “where’s my problem?” is it a lead generation issue? is it an appointment setting issue? pitch and close? retention? CRM? Ask yourself what you are trying to get out of hiring this person before you commit to their engagement.

39. Don’t hire a VP of sales too early – a great VP of sales has experience “owning” the entire sales org – hiring, managing, providing strategic direction etc.. You are not ready to hire a VP sales if you aren’t 100% sure who you’re selling to, how your product is priced, how your channels are set up. If you are still in GTM phase it’s too early.

40. Do what is required to lead your team, not what you read about leadership in a book somewhere – you’ll know right away if your leadership tactics are working. The team either listens and is engaged, or they roll their eyes.

41. Learn how to read people – if you think someone is disengaged and not as motivated, it’s because they probably aren’t. Are they requesting more time out of the office than normal? Is their performance sliding? They are probably on their way out and no they will probably not tell you. Point is, if you think something might be up it probably is. Humans are great at avoiding conflict. When you get off your ass and have some hard conversations you’ll be one step closer to a solution.

42. Entry Level Employees are Great – because you can get them right out of school, they are cheap to hire, and the good ones are a sponge for new information. Over time, they can take on significant roles in your organization and serve as mentors to the next class of kids.

43. Entry Level Employees are a Nightmare – because they don’t have any context or perspective, and can grow extremely entitled. As your company grows some will feel that they deserve to take on roles they aren’t ready for or compensation that just doesn’t make sense.

44. Entitlement is the “point of no return” – once an employee develops a toxic attitude they need to be moved out immediately. In almost every case, letting someone go results in a collective “I wish we had done that sooner” refrain from the rest of your team.

Performance

45. The process you build is #1, not the salesperson – tell me if you’ve heard this before: “if we can just find five more guys like Alfredo then this team would be blowing it out of the water” *points to star sales guy* – every sales team has their rockstar or rockstars. And everyone is quick to say “if we just had more of them….” but this is a rookie move. You will never find and retain a full team of those people. Ever. And I hate to say it, but at a certain point your rockstar is going to get entitled and hold you up for stupid money and he/she will leave. The star of your sales team needs to be your process not your performer.

In the sales machine your leads are the input and revenue is the output. Nothing else should be left to chance. When you have rock-solid lead gen, a great pitch, a metrics-driven culture and thoughtful management ALL of your b-players can produce A results.

46. Set up a zombie sales death squad – once the team grows past your first few sales reps pick one or two of them to go on top-secret “sales missions” to test new strategies. For example, pick the stage in your pipeline with the lowest conversion rate and test three new scripts or approaches. Every element of your sales process should be open for debate at any time.

47. Don’t let salespeople move to non-sales roles – this sounds harsh but a salesperson, particularly entry-level, can’t think they can just move over to account management or support or biz dev if they miss their number. What happens if they crush their number and want to move to a different part of the company? Sure then you might consider moving them…but it’s highly highly unlikely that a top producing rep will make equal or greater pay moving to a non-sales role.

48. Shitshow or “moving target?” – set expectations at time of hiring that the role your reps are being hired for could change in an instant and they should be ready/excited for that. Startup sales strategy is a moving target that should be embraced.

49. Set your quotas LOW in the beginning – you can’t motivate or manage the team if the bulk of them are not hitting their goals, and nobody will respect your authority if they know they can get away with missing plan. As a sales leader it’s your job to own the number. If 10% of your team is off quota that’s their problem. If half or more is off…that’s your problem. Set low at first, make sure everyone is hitting, then increase a little more the next month

50. Sleep with your pipeline under your pillow – and tattoo it to your face. This is the most important thing you can ever do in sales. It all comes down to a properly understood and managed pipeline. Crawl in there with a microscope and seek out every single conversion rate, cycle, lead source, objection. Know it all.

Sales Strategy

51. Channels are really hard – reseller channels are a common way to sell most products. For example, small to midsize liquor companies work through a distributor to get their products onto store shelves, IT software and hardware companies work through VARs (value-added resellers) to sell to IT guys and many web publishers sell their advertising inventory through open exchanges rather than directly to the advertisers themselves. Here’s the problem – teaching and motivating anyone to sell your product is really, really hard. Shit – motivating your own employees to sell your product is hard enough! Regardless of what product you are selling, you will get offers from resellers to sell your stuff. It will seem like easy money at first – but avoid it! Until you have a really buttoned up internal sales process – things like lead-gen, marketing collateral, sales training, fulfillment and RMAs you are not ready to start selling through the channel.

52. Resellers will not bring you leads – at least not early on. a common misconception is that resellers will go out and proactively bring you business. In most cases, they will not. They might put your logo on their website, send email blasts to their customers, even throw events. In some cases they will promise you large slugs of business. I can promise you that this is almost never the case. They can already feed their kids with the stuff they’ve been selling for 10 years. It’s your job to send them a lead. and then another lead, and another. and five more. You have to prove to them that they can make money selling your product and that it won’t explode in the hands of a customer, only then can you expect resellers to go out and bring you new business.

53. There is very little room to pivot with a channel sales model – pivoting is hard enough with your own team. The process of changing your product, rewriting collateral, rewriting technical documentation and training materials can take months. Imagine how difficult this becomes when you have a group of loosely-engaged third parties selling your products in their spare time. Every pivot cuts their desire to engage and results in lost sales.

54. Webinars are a generally ineffective tool when you’re starting out – until you’re able to invite thousands of prospects at a time to your webinar you should not expect it to drive any meaningful number of leads. Here’s how this story usually goes: spend countless hours putting the slideshow together, writing the script, rehearsing, setting up the feed, doing email campaigns and building landing pages. And then three people attend the webinar. Sweet.

55. Don’t go international too early – Once you start getting some PR you’ll start getting a flood of inbound leads from outside the US. Asia! Dubai! Denmark! Everybody wants my product! In many cases half of your inbound will come from folks outside the US. Similar to getting interest from resellers, it will seem like free money. But the complicated nature of non-US selling is immense. What you’ll find is that you start shipping some orders to Australia, then to Denmark, then a consultant in Japan wants to get you into some big clients over there. And before you know it you’re staying up all night creating non-US price lists and marketing collateral for each region, adding new fields to your CRM, worried about whether or not you have the right certifications to sell in those countries. Then you actually make some sales and you have pissed off customers because….surprise….Australians need support too. Except their Monday is our Sunday. And then your sales prospects in Australia “need” to see case studies with Australian businesses. So your marketing team now hates you. Focus on your home market first.

Operations and Scaling

56. Get ready for constant interpersonal problems – once the team starts to grow you’ll find that somebody is always leaving, somebody is always about to get fired, somebody always wants to “have a minute” with you. That’s just the way it is so you should be proactively establishing tight bonds between everyone on your team rather than waiting to put out fires.

57. Build an operations plan that’s aligned with your CAC – for example, a $50/month product technically can’t support any direct salespeople. Unless each salesperson can sell 100+ accounts a month the numbers just don’t back out. Really analyze the fully-loaded cost of bringing on a new customer. If you don’t, your investors will do it for you in due diligence and make you look stupid.

58. Don’t overinvest in CRM too early – until you’ve truly established a repeatable sales process – not just five or 10 sales in a row – but actually built a business around your ability to sell your shit over and over and over, only then should you invest in a heavy-duty Salesforce implementation. Your CRM will be your greatest asset or biggest waste of money depending on how you approach it. At Swarm we used a cheap CRM first (Zoho) and customized it ourselves. We worked through five or six different sales models until finally hitting on the winner. And even then we spent probably three or four months using it until we were damn sure things weren’t changing. Only then did we call up Salesforce and spend $200,000 getting our 12-person sales team properly outfitted. CRM design and implementation (if you do it right) is mission-critical to scaling your business. But if you do it too early you will be stuck with a system that nobody wants and is difficult to change.

59. Most biz dev is a waste of time – I say this because I just haven’t met that many great BD guys out there. At it’s core, BD is a scalable way to reach lots of customers through a partner, whereas sales involves going to each customer one by one. Generally speaking the only time you should think about biz dev is if your model relies on a partner ecosystem to work, or if you can pick up a distinct competitive or strategic advantage by capturing value through a partnership (that you can’t otherwise do yourself). Really work to understand and quantify the scope of your opportunity with a partner before going down that path.

60. Establish an internal knowledgebase or wiki – and delegate somebody to own this. it will need to be updated almost daily. But you won’t be able to retain customers or scale your support operations if nobody knows how the hell anything works.

61. Remote offices and expanding beyond HQ too early is a huge time suck and waste of resources – It took me the same amount of energy to manage one guy in NYC as it did to manage 20 people in California at both of my past companies.

62. Establish a ticketing and support infrastructure early on – as soon as you start selling. Even if it’s just an intern supervising and responding to the tickets, it’s better than nothing. Customers will roll down the assembly line and into the trash heap

63. Worry about churn once you prove you can sell – you’re going to have insane churn early on. that’s OK as long as you address it eventually. establishing the repeatable sales model should be priority numero uno.

64. Live in truth – part of a much larger concept by Ray Dalio. You’ll be tempted to make excuses or justify failures when things get really really hard. The worst thing you can do to your team and your investors is to lie to yourself. Your success will come by solving the problems that get in the way of getting what you want. And in the startup vacuum nobody can hear you scream, so don’t bother. Take an honest look at the problems you need to solve and divorce yourself emotionally from the possible failures.

 

If you have any questions for Ryan, let him know here in the comments or reach out to him on twitter at DenehyXXL

Casper: Innovating on The Sleep Industry with Philip Krim – TCE 053

Click here to get exclusive access to this conversation on Itunes

So I just moved to a new apartment and I had to haul my mattress from my parents house in PA all the way to New York City…

The whole process was a pain and trying to fit my queen size bed up the stairs into my place was an experience I don’t wish on anyone.

Fortunately there is a company out there called Casper that is helping fix that. Today we have Casper’s CEO Phillip Krim on the show.

We’re going to talk about how Casper is innovating on the entire buyer experience of purchasing a mattress. The thing that really caught my eye when I first saw casper was that the mattress was delivered in a box the size of mini fridge and actually unfolded out when you finally got it to your home.

That would have been nice about a week ago…

Anyways after chatting about the evolution of Casper, we’re going to touch a bit upon this growing trend of direct to consumer companies and what entrepreneurs need to know if they’re interested in building a brand to disrupt commerce companies with traditional offline distribution models.

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What You’ll Learn By Listening

  • What Casper is and why it’s different
  • The story of how the Casper team landed on the idea of innovating in the sleep industry
  • The evolution of their idea to bringing a product to market
  • How they decided on which prototype to launch with
  • Their process for innovating on the entire customer experience
  • Thoughts on the growing trend of direct to consumer commerce and what market dynamics make this model work

Don’t miss out on all the strategies we’ll be sharing in the future. Subscribe below to get access to future episodes. subscribe-to-itunes-black-325x118

For more on Casper check them out at Casper and on Twitter at @Casper.

Questions On This Philip Krim Interview?

 Leave your questions and responses to this Philip Krim interview in the comments section below:

LLL Mindshare

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Don’t Forget to Leave a Rating in iTunes. It helps more people find our show.

**Music Credit: Carousel Games & Stay Awake

The Recipe for Explosive Growth Behind Onnit Labs with Aubrey Marcus – TCE 032

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Onnit Labs definitely is a company I have a huge man crush and today we bring on the Founder Aubrey Marcus to talk about how he’s been able to make it one of the fastest growing companies in the human optimization market.

You’ll learn the clever marketing strategy that catapulted Onnit sales out of the gates and how you can apply this to launching new products.

We’ll also discuss some other marketing tactics and must know information for everyone creating physical products.

This is a goodie. Enjoy : )

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What You’ll Learn By Listening

  • How Aubrey got started with his first product
  • The launch strategy for their premier product alpha brain
  • A primer on podcast marketing and why this is such an effective channel
  • The role of authenticity in the company’s success
  • Must know information for anyone looking to launch a physical product

Watch the episode here:

Don’t miss out on all the strategies we’ll be sharing in the future. Subscribe below to get access to future episodes.

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Links & Resources Mentioned:

For more on Aubrey check him out on Twitter @WarriorPoetUS and Onnit Labs.

Questions On This Aubrey Marcus Interview?

 Leave your questions and responses to this Aubrey Marcus interview in the comments section below:

LLL Mindshare

Twitter

Don’t Forget to Leave a Rating in iTunes. It helps more people find our show.

**Music Credit: Carousel Games & Stay Awake

Aaron Ross on Building A Sales Machine – TCE 020

Listen to this episode on Itunes

What’s better than great sales people?

A predictable sales machine that is completely independent of whether you have an army of people with the gift of the gab and ability to close.

Aaron Ross, Best Selling Author and Founder of Predictable Revenue, comes on the show today to discuss how to create a sales “system” using principles that he discovered while building out a 100 million dollar recurring revenue stream at Salesforce.com.

I found this conversation really interesting because it contradicted many things I see even effective companies doing. I guess the question we have to ask ourselves is how can we be most effective!?

You’ll learn a ton about sales and lead generation in this conversation and Aaron is an awesome dude.

I came away with some new tactics and also some ideas on why maybe scaling back my work week might be a good idea…

Aaron Ross

Aaronism: “People leave managers, not companies” (tweet this)

What You’ll Learn By Listening

  • Some of the most common mistakes that sales teams and sales leaders are making today
  • Why sales people shouldn’t be managing the entire sales process
  • The ideal sales system for creating predictable revenueThe most important component of creating an amazing sales system
  • Where can you find great sales people?
  • How to keep sales people motivated and happy
  • An amazing voicemail tactic and framework to think about using voicemail to get meetings
  • The best way to start out a cold call
  • How Aaron has been able to be more creative and produce better work by limiting his work to around 30 hours a week

Listen to the episode here:

Subscribe on Itunes for more interviews or Listen on Stitcher

Thank Aaron for dropping knowledge on us (tweet Aaron here)

Mindshare segment at the end:

My personal thoughts on how young people can take a lean approach to their career and finding what the heck they actually want to do with their life. I’m still trying to figuring this out just as much as everyone else, but here’s whats worked for me.

Links & Resources Mentioned:

For more on Aaron check him out at: Predictable Revenue, on Twitter @motoceo, and his new book.

*You’ll find a full searchable transcript below

Music Credit: Carousel Games & Stay Awake

Searchable Transcript of This Aaron Ross Interview:

Scott: Aaron, what’s up man?

Aaron Ross:  Hey Scott!

Scott:  So, Aaron I want to dive right into the meat here and I just told you a little bit about how I just got done on your book and learnt a ton of new awesome stuff and I think that we’re all going to learn a ton of amazing insights in this interview today. And I want to start out by just talking a little bit about some of the common mistakes that you see amongst sales-leaders and companies with outbound sales teams.

Aaron Ross:          Okay, sure. We can talk about sales, for a second I thought you were going to — everyone wants to know about my eight kids but —

Scott:  I mean dude, I want to know about your eight kids too because that’s a pretty big feat in itself. I mean —

Aaron Ross:  Maybe a little later.

Scott:  I’m not quite ready for that in my life but I’m sure there’s people out there who would find value in that.

Aaron Ross:  Well, when you get kids and a big family, that’s when you need for sure a “Predictable Revenue”. But the sales mistakes, I must say there are a lot of them. And there’s different kinds of companies — so let’s start with the kinds of companies that actually have a sales team of more than a few people because I know there’s a lot of solopreneurs out there who are — who are people who sell. But typically with sales team or companies with sales people, I’d say the most common mistake is having a sales team of everyone is doing everything; generalists. So it’s a team of sales people where they are doing their own prospecting, they are closing their own deals and they are managing their own book of business or their own customers.

Scott:   Now, why is that a problem?

Aaron Ross: And that is the number one problem but why it’s a problem is because it’s like you don’t know what’s working and what’s not when they are juggling everything. They are multitasking all the time and so they are not really good at anything and the biggest problem is that you end up with a revenue rollercoaster system where sometimes things are going great and you blow out your month or your quarter but other times, you missed your number and you’re never really sure why. And there’s no predictability because there’s no system and so it’s a little bit like ‘every man for themselves’. And if you do well, great and if you don’t, you’re out but there’s no system or a process that increases or makes success certain. It’s a lot of guess-work.

Scott:  So let’s dive into this a little bit. I mean would it not be possible to have a sales rep measure the lead-generation activities than their meetings and their closes and sill be able to provide accurate metrics?

Aaron Ross: No, it’s not actually. I’m being totally serious because once in a while, you get the unicorn, like the sales person who can prospect and close and sort of keep it all together consistently but you can’t build a team of them. I mean, that’s like the one star that you get out of maybe every ten or twenty people.

Scott:    I mean hypothetically, if you had eight kids and there are [Inaudible 0:03:02] it might be possible.

Aaron Ross:  I don’t know. I can’t say — they do use my own techniques on me but — so, what happens and the reasons why it doesn’t work, so first — as I say sales people shouldn’t prospect because sales people or the men or women who close deals shouldn’t because usually they are not any good at it in the first place, they don’t want to do it the second place and the third place it’s not sustainable and predictable because even if you should get that rare person who can prospect effectively and they fill their pipeline, then they get so busy closing deals that they stop prospecting. And then they get into this [Inaudible 0:03:41] famine mode and once in a while, I mean there are people out there that can consistently prospect and close but they are so rare that you can’t build a team around them and you certainly can’t build a predictable, scalable team around them. That’s the exception. But what you can do is you can build a system or a process — you don’t want the sales person to be the star, you want your system to be the star because if you have a good system or sales systems, we can go into what that means, you can hire any good person and they will be successful. So in other words, let me give you an example like prospecting or lead generation; so a lot of companies or people are obsessed about their sales process. How do we move people through from proposal — or from qualification to proposal to close and objection handling and so on? But I say, if you are — you get the most perfect sales process in the world, but if you lead generation lags or is crummy, you are going to struggle. On the other hand, if you have great lead generation, you can get pretty much everything else wrong and you are going to do well.

Scott:    There’s a higher margin of error, I’d imagine.

Aaron Ross Interview:          Yeah, lot of slack, you get stuff wrong that way. And so going down to what’s one way that a lot of sales teams and companies expect lead generation to happen is through their sales people to do their own prospecting. Maybe, either to fill most of their funnel or even half or some significant portion, sometimes companies get inbound leads, sometimes they don’t, but this goes back to okay, if lead generation is what drives your company’s growth, it’s not the size of your sales team, it’s the size of your lead generation or your pipeline. And if it’s pipeline or lead generation that drives growth and not sales people, one of the more predictable ways to actually create leads consistently is with [Inaudible 0:05:44] answer to the problem, is dedicated prospectors. So for example, what do you do? Sales people should not prospect, what do you do? We have prospectors who prospect, they don’t close and they don’t respond to inbound leads. They prospect and closers close. They do a little bit of prospecting, like five or ten strategic accounts or key partners but most of their time should be filled up with deals that the prospectors are maybe marketing — where the leads would be coming from isn’t really that big a deal as long as they are any good but they should be closing, working their pipeline, not banging the phones or cold-calling. Why would you have your most expensive people doing — it’s valuable but it’s the work that cheaper people could do. Who are less experienced and hungrier and do it better.

 

Scott:                     Yeah, so in an ideal world, you have people out there finding all the people that it potentially makes sense to sell to or do a partnership or whatever it is and then you have the same people qualifying those opportunities to make sure that they are a good fit before they bring in the closers? Can you kind of paint the ideal system?

 

Aaron Ross Interview:          Yeah. So ideally you start with — and there’s a lot of details in the book but at a higher level, you start with who is your ideal outbound customer and this could be done whether you are prospecting directly for customers or lots of times companies prospect for partners or channel partners but who is ideal to go after, step one; step two is you build a list and whether that is — sometimes you can get a list from places like online databases, like data dot com or sometimes you have to hire a firm to go build it by hand or you have to build a list. Third step is you run campaigns; so you have a prospector, they could either call, they can email; I found a lot of success through email, cold email. But they are doing campaigns and they are doing AB test campaigns; ‘let’s send this email and then let’s send this other email; it’s the same except for a different subject line and let’s see what they get’. So run campaigns and they get responses, at least step four is the conversations where you want to sell the dream. Why they should be interested; again, if the customer is a partner if it were and step five is pass the baton which is where you said, okay, this is an opportunity. I’m talking to someone who has got an influence or power in this company, they have a need, we can help them, I am not going to bring in my senior partner who is an — in software you usually call them an account executive or whatever. They close, so they are a closer, I would bring them in and there’ll be a baton pass for them to take it over.

 

Scott:                     Got it. So I’m interested to dive a little bit deeper and clarify around the step four of selling your dream because a lot of these people that you put on this list might actually be terrible fits for your company and for you to spend any time trying to close. What are the type of ways that you can qualify a particular customer who seemed to match the ideal profile before sending them off to the closer?

 

Aaron Ross:          Well, usually the prospector, most often should have some kind of phone conversation with the prospect before they set the second longer conversation with the closer. So, there’s two ways; you can have some email quick questions and in fact, here’s some specific tips; I find a lot of companies need — you want to be very insightful about how do you tell apart, the companies who could be a fit and who could be interested or who are interested versus the ones that actually pull out their checkbook and buy? And so if you could only ask two or three questions, if you are only allowed to ask two or three questions period and with those two or three questions, you have to figure out, are they sort of like not that great a fit or are they a great fit? What would those questions be and the trick is to ask those questions. It could be over email, it could be over the phone and you — it’s like today, you don’t — it’s hard — you can’t have — some of these sales trainers who say, ‘well, you should find out their problems and give them what they need’. The problem is, people don’t know you and they are not going to give you the time to figure out their problems.

 

Scott:                     Yeah.

 

Aaron Ross:          It’s like you have to take a guess of what the problems are and in as simple and quick manner as possible, at least try to get a gauge of ‘do they need what we’ve got?’, ‘could they be a fit?’ or ‘are they not a fit and should I move on?’

 

Scott:                     Can you give an exact example of this type of scenario and the specific question that you would ask to qualify just so people can better understand the concept?

 

Aaron Ross:          Sure. So for example, if you sell software, let’s say you sell marketing software. There’s a couple, [Inaudible 0:10:50] or Marketo they are two popular ones. It’s about inbound marketing software, marketing animation software. This question applies but a simple question would be, and this could be over email — after you got an initial response from somebody — so if I start at the point of — let’s say, I like a referral approach. So, let’s say you go to the CEO of a company and say, hey John, just curious who handles your marketing and could you point me — could you tell me how to get in touch with them please? John refers you to Jane, the VP of marketing and you might just send a quick little note to Jane of which has one question, and not more than one. And that question might be, hey Jane, do you mind if I ask, what you are using today for your marketing automation? And because here the trick is, the question has to be easy to answer and insightful enough for you to learn something useful because if I find out what kind of software they are using for whatever I care about, could be marketing or sales or billing, that tells me a lot. So say, she writes back and says we don’t [technical difficulty] anything today; great, that’s fantastic. I’ve learnt a lot there are probably great customer or could be potential and I thought that one more question, let’s say that she writes back and uses a competitor, if so, then I’ll probably — and I know my competitors are probably know, right away, 80% likelihood of what their problems are. So it just tells me a lot of information about who they are and what they do. Or if you sell a [Inaudible 0:12:25] let’s say you sell something to sales teams, you’ve been asking how many sales people do they have, like whether they have five or fifty, can make a big difference in my understanding of what they — how big a deal could there be, what are their likely problems and so on. So it’s two or three of those quick questions that can tell you a lot about who they are and also whether they are worth working on further or not.

 

Scott:                     Right.

 

Aaron Ross:          But the important thing is, don’t ask a question — here’s what not to do. Think about it if I — again, we don’t know each other because this is prospecting and if I asked you, [technical difficulty] by phone or email, so my first question is, hey Scott, what are your top marketing goals this year? Chances are — it’s an open ended question but it is pretty hard to answer for most people because it takes a lot of mental energy. Even if I trust you enough to tell you, I don’t know, I don’t want to add, no, I don’t know —

 

Scott:                     I mean I’m having mental knife-fights in my head right now trying to answer the question for myself.

 

Aaron Ross:          Exactly. But if you ask the question like, hey Scott, what did you have for lunch today?

 

Scott:                     Well, I had a protein shake.

 

Aaron Ross:          Or in business the equivalent would be, what software do you use for this? It’s an open question but its specific enough so it makes it easy to answer.

 

Scott:                     Right and I guess —

 

Aaron Ross:          And it’s not a struggle.

 

Scott:                     Yeah, and I guess the key is almost kind of reverse engineering what you can learn by the answers that they give. So —

 

Aaron Ross:          Exactly, with the fewest answers possible.

 

Scott:                     I mean it makes total sense I mean it’s a big thing for us that my last company was just always trying to eliminate all friction from getting a response, whether that was a cold email or a cold call and the easiest way to do that is to keep it simple and to keep short.

 

Aaron Ross:          And that is why I don’t ask more than one question per email.

 

Scott:                     That’s awesome advice man; so I know there are lot of people listening to this right now, they don’t have a sales team of five to ten people and they are maybe thinking in their head right now like, yeah, this idea of specialization makes total sense but how the heck can I apply this and when should maybe a company that is growing from one to multiple sales people, think about applying this?

 

Aaron Ross:          If you are one person, the way — actually you apply it, but you apply it to your calendar. So for example, let’s say that you are a sales person and you are the only sales person at the company and prospecting is the thing that you need to work on. Schedule — pick a day or two days a week or an afternoon or — probably blocks of time of at least two hours for that sort of prospecting. Or — so again there are these four core roles. The sales team, if you have a few people, you have prospectors who prospect is one; the second one, if you have inbound leads, you have inbound lead qualifiers who just respond to website leads, this is the second; the third type of sales role is closers bringing new business and the fourth type is account management or customer success, basically, the sales people who work with current customers. So whatever your — if you are sales person or an entrepreneur, if you — if there is bottleneck and you need more leads, then block out time and prospect. Or say you are having trouble with attrition; a lot of customers are leaving, block out time for customer success on how to help them be more successful. But, it’s really applying that to your calendar. It’s really about focus and not multi-tasking.

 

Scott:                     Yeah, makes total sense to me. What would you say to somebody who maybe has one to three sales people and says, I don’t have the resources for dedicated prospectors; my people need to go out and need to be out there closing.

 

Aaron Ross:          Okay, so let’s say you got two sales people and they are already there; I would have them budget their time, pick an afternoon, two afternoons a day or whatever and then to have a buddy system to prospect together to keep them accountable to it. But the next person you hire, if you have a new opening, hire someone you make a prospector and — there’s this false belief that okay, I want people who can close and if I — every person who close has a quota of $500,000 that means for my sales, if I need five million dollars, I just need ten sales people. So there is this over-weighted belief that hiring a sales person who closes will bring in revenue. And it’s only true if they have got leads so yes, if you have two sales people and you hire one more person, if your current sales people are so busy with their pipeline that they can handle all the leads, hire another closer. If your sales people are struggling for leads and complaining about the quality of leads they are getting, hire a prospector. So you got to be smart about who you are hiring and how do you break the bottleneck you’ve got and not just try to grow sales by hiring more sales people.

 

Scott:                     Makes sense. Now, while we are on the topic of hiring, I mean a question that I get a lot is how do I hire good sales people? Where do I find them? How can I tell whether this person is going to be good or they are just good at selling themselves? I’d be super-interested to hear your opinion on this.

 

Aaron Ross:          Okay. Well, actually there is a hiring guide, it’s both for prospectors but there’s a lot of the principles apply and there’s a cool recruiting process at Predictable Revenue dot com slash Recruiting that you can check out. But I would say, the most underrated quality for sales people that is just coach-ability. Can they be coached? Do they want to be coached? Do they want to learn? Are they so cocky that they are not able to get any better at what they do? It’s so true, it’s hard to teach an old dog new tricks; in other words, it’s hard to teach a sales person with a lot of sales experience new tricks.

 

Scott:                     Yeah.

 

Aaron Ross:          So I’d be the number one place to think that okay, yeah, you want someone who is energetic, who loves sales, they want to succeed, they want to make money, so — but how often are they coachable? I think that’s the most — that would be the thing that I would — one of the things to look at first — and the second one I’d say is, okay, they should make money, want to make money but it shouldn’t be the number one thing. I guess it’s unless you are the number one thing, but the sales people are the people who also lack the — they want to help. They want to help customers, they want to help their teammates and money is on the list of the top five things but it’s not the number one thing. They want to make a difference, they want to learn, they want to grow, they want to help their company and their team succeed and themselves. But, when it comes down to making choices between ‘do I?’ they always run through these situations; ‘do I close this deal by fudging the truth, whether I do it consciously or not or do I not close this deal and maybe not make more money now but I’m going to be happier, customers are going to be, prospects are going to be happier and it’s a good long term investment’. I mean you want sales people that are going to do the right thing not ones who are going to usually do the right thing but sometimes make problems happen.

 

Scott:                     Where do you find these people?

 

Aaron Ross:          I think honestly, if you are a company that’s going to grow and sometimes if you are a software company or you are a company that is growing and wants to grow, the best place is you should grow them up in a [Inaudible 0:20:39] system in your own company. So creating junior level positions, could be prospectors, could be inbound lead qualifiers, it could be just interns to support — customer support is a great feeding ground for — well actually, any kind of sitting role you have in a company where people are interacting with customers is a great feeding ground for sales. You could be operations interns or anything but some of these low-level positions where you can bring in younger, hungrier people, they happen to be less expensive but the nice thing is you get to know them, they learn a lot about your company and you can promote them into sales roles and up through the ranks and because you have got people who are going from one role to the next and moving to the company, you can have a very high success rate with your sales people. It’s like you get a faster ramp time since they already know the company, they know how it works and you should have a 90% sales rate with your sales people.

 

Scott:                     Yeah. Everything that you are saying right now just fits into this whole scheme of creating machine in that somebody is coachable, you should be able to plug and play them into a system and they should, with 90% accuracy, be able to perform at a high level and the truth be told is that a lot of people out there and hey — we’re all guilty of this at some point or just kind of fudging it or slopping together instead of starting out with this kind of higher ambition of creating a machine. I mean, how do you — and I’m curious, I’d love to hear a little bit about your experience at Sales Force, how you guys came across all this. I know from reading your book that it want just beginner’s luck and there was a lot of testing and experimentation but I love to learn, with that experience in mind, how does somebody go about building this machine from day one and really allowing it to grow into this?

 

Aaron Ross:          Well, it does begin with your mindset in terms of — especially when you have a small business, you are growing, it’s really hard to slow down and reflect on what’s worked and what hasn’t. It’s really easy — I mean it’s easy for people to work a lot of hours, that’s the default. It’s hard to work few hours especially when you have lots of stuff to do. So I think it’s that discipline to stop and reflect rather than just — our human reaction is if things aren’t going well, or as well as we want, we just do more of what we are already doing. In other words, more of what is not working.

 

Scott:                     Totally, and people also hate reflecting because A it requires thinking which is actually hard work and B it also requires you to look at crappy results.

 

Aaron Ross:          Yeah, and that’s a big part of it. Well, think about — think about a sales person who is not making their number; what’s their manager saying? 95% of the time, their manager is saying, make more phone calls, do more activity, send more mails and make more calls. How often does a manager say, ‘okay go back and just look at your last three months and come back and tell me, when you hit your numbers and you got deals in, what did you do differently then versus when you were struggling?’ Have you ever heard that?

 

Scott:                     Absolutely not.

 

Aaron Ross:          No. So, a lot of it is habit, it’s just that a lot of the way that sales teams are run today is just through habit that’s been built over the last hundred or two hundred years. There’s not a lot of real thinking or innovation in the way they are run, and again for example, the average sales team attrition at least in the business-to-business world is like 25% or 26% a year which means that if you have 100 people at the beginning of the year whether they are fired or whether they quit, you’ll lose 27 by the end of the year and you are left with 77; that’s average. That is crazy high and I think — in some industries it’s even higher but Sales Force dot com, two years ago had 3000 sales people and they lost 750 and I can’t imagine, tens of millions of dollars must have cost to replace almost a thousand sales people a year just to keep their team at their same size, not even including the missed opportunities and all the frustration that customers get when they keep changing sales people. It’s a huge problem and honestly, I think the only reason that much attrition is because people don’t really realize that ‘wow, you mean we could actually have under-10% sales team attrition and that could be a good thing?’ or like ‘we should have or we shouldn’t be firing all these people?’ or ‘it could be actually our responsibility, maybe it’s our system, not the people that’s the problem. What?’

 

Scott:                     Requires some mirror-gazing.

 

Aaron Ross:          Yeah, and it doesn’t yet happen as often as it should in sales; it’s a bit more and also probably the biggest new point in the next book I am doing is the fact that sales team attrition should be not 27% a year but more like 10% or under 10%. In fact, it should have zero percent voluntary attrition, which means in a good sales team that is doing well, people should not — no one quits.

 

Scott:                     This is an interesting topic because I worked at a — the last company that I was with, we had a floor of say 50 sales people making phone calls. And I got to tell you, that’s not an easy gig especially when you are calling restaurants who are more concerned that the door sign is ‘Open’, that the chef is showing up on time and their waitresses are not drinking behind the bar and they are not necessarily interested in buying marketing software. So you can imagine that these conversations were not easy when you are cold-calling and trying to get meetings. How do you keep people happy and motivated that are selling for you?

 

Aaron Ross:          I guess you begin with the good point is that if — was that like a one or two-call close or —

 

Scott:                     No, it was a multiple call close. So the first call is to set the meeting, the second call is to qualify and then at that point it was kind of a feel thing where you would go from qualification into pitch and try for a close or you would go qualification into another flat out pitch call?

 

Aaron Ross:          Okay, so as I say, it was one exception to the rule of specialization is that if you have like consumer sales or one-call closes, then you might have the same people calling and closing and the case you are talking about you still have prospectors who are prospecting and closers who are closing. So how to keep people motivated? First of all — by the way, did you have it that way or was everyone prospecting and closing their own deals?

 

Scott:                     I mean we brought leads and then people were doing the qualification and closing. And so like in guess in terms of pipeline building, I mean we were selling to local businesses, there’s 13 million of them out there. It wasn’t like a highly sophisticated research process. So, it might be a unique situation but I know that there was a lot of experimentation with people that were just pure qualifiers, pure prospectors and honestly I think by the time I left and the company sold, there wasn’t enough data to really determine — or the data wasn’t the driving force or there wasn’t enough data for me to really — I guess figure out what was going on.

 

Aaron Ross:          You were so unclear.

 

Scott:                     Yeah, I mean I think I was a little unclear.

 

Aaron Ross:          That’s fine because you always got to use your brain and take the principles but try stuff out and apply it to your specific situation. But going back to the motivation, so there’s a few things that help sales people stay motivated; again if you have the kind of team where everyone is doing everything, a huge difference is if you go and switch to specialization in prospectors who are prospecting and help fill the pipeline of closers. That’s a huge difference and the other thing can be just regular communication with people. People hate surprises; I mean in business, no one likes surprises. Sales manager doesn’t like being surprised that someone misses their quota at the end of the month; sales people don’t like surprises when there’s a new [technical difficulty] just keep the team engaged in what’s going on. They also — a big factor over time is career path. The best people want to grow and if they don’t see that there is some kind of career path, a lot of people — it’s going to create a lot of frustration and in the day-to-day grind, not every day is going to be a good day. Everyone has shitty days, everyone has good days, so I think partly — I think it’s popular now, for everyone should be happy all the time, everyone should love their work all the time and it’s like, hey it’s okay to have some great days and have some crummy days and just — if you’re going to have a shitty day, have a shitty day. Don’t try to — you don’t have to be happy all the time.

 

Scott:                     Yeah, I’m really glad you bring this up man, because I live with a bunch of happiness butterflies and the idea of like a bad day with my life right now was like seems unrealistic but I think it’s actually so important with life just to give yourself permission to just not have the best day and understand that like every day is not going to be utopia.

 

Aaron Ross:          Yeah, it’s impossible; you are human, it’s impossible. So, it’s just being honest with yourself. And the last thing I think is what I have heard and I don’t know where I heard this but it really resonated is that ‘people leave mangers and not companies’ and honestly there’s a lot of crummy managers out there, sales managers who are hired. The funny thing about sales people is that they are good at selling themselves and in interviews, a lot of companies who have sales executives or sales managers or sales people and especially founders who don’t have a lot of sales experience and they get old and they get a bad manager who is just about how many dials their team can make — whether it is working or not, it’s about dials and there’s no communication, there’s no coaching but the founder doesn’t have enough confidence in sales to know what to do — this is me by the way. I had a company that failed because I didn’t, as a founder or CEO, didn’t know about sales; going back to founder hires someone who is not a great sales manager and they don’t know what to do and they don’t have the confidence to [technical difficulty]. So, honestly I think — and this is a bit of a set point but for executives and founders, you need to know how to sell yourself. I guess do the selling plus how it works in order to be able to hire the right people and work with them in building a business. So in other words, you want to be able to delegate sales at some point but not advocate it.

 

Scott:                     Yeah, totally. I mean there are so many implications of understanding that I mean, whether we are talking about hiring the right person, coaching, making them feel good, making them — interpreting the feedback that you are getting from that person, it’s a great piece of advice. One thing that I want to talk about real quick was — and I love this in your book and people and myself included, love super-tactical little nuances that make us better at what we do. And in the cold-call scripts that you gave, you gave some specific advice to say somebody’s name twice. I don’t know, I can’t recall if it was for a voicemail or for the actual cold-call itself, as well as the phrase ‘did I catch you at a bad time?’ And I think these are both little gems that people can apply if they are listening to this and they ever have to be on the phone for their business and I love for you to kind of just dive into these little bit and why these are very powerful.

 

Aaron Ross:          I should remember the name — I said that name twice; actually I’m going to give you a different voicemail —

 

Scott:                     Yeah, give me a voicemail man, give me some meaty tactics that I can start throwing in there today.

 

Aaron Ross:          Okay. I actually haven’t done any AB testing or stuff to see how well this works compared to the past ones but I know it does — I’ve heard [Inaudible 0:33:51] from clients. So for voicemails like — you just don’t get called back, just to be honest.

 

Scott:                     Truth.

 

Aaron Ross:          You just don’t and there’s ways — there are ways to get call backs but a little bit [technical difficulty] misleading. So I think voicemails should be used as a way to increase your email responses and a client — so you consult with companies who are building outbound prospecting teams and a client did this and that’s where I got it from but they started doing was, they leave a voicemail one day and then they would send an email the next. But the voicemail was something to the effect of ‘hey, this is Aaron Ross from Predictable Revenue’, there might be some referral or might be not, ‘I’m going to send you an email tomorrow; later today or tomorrow some time and if you could just keep an eye out for it and respond to me there, I would really appreciate it please.’ Click.

 

Scott:                     I like that.

 

Aaron Ross:          No phone number, no email, so what it does is it creates little bit of a mystery loop. So ideally, they can — that’s why you want to wait several hours at least where they have more of a chance to listen to it and there are primed so when the email comes through, could be the next day or later that day, they are more likely at least respond to the email.

 

Scott:                     That’s a great tactic right there. I really like it and there’s also some kind of weird psychology going on there or I can envision going on there where people want to remain consistent with the type of people that they say they are going to be and if somebody says, ‘hey I’m going to send you this, can you please look out for it and respond’, all of a sudden I feel — I mean just listening to you say that, I feel an added pressure to respond, like this person knows I am avoiding them for sure.

 

Aaron Ross:          [Laughter] And if you noticed, I always say manners are important; you can’t say please too many times, whether it’s on the phone — you just say please, I think manners are becoming sort of a lost art, say ‘please’ and ‘thank you’ on voicemail, call, email or whatever.

 

Scott:                     My mom would be very appreciative and approving of that advice.

 

Aaron Ross:          Yeah. All right, so then you also asked about the ‘did I catch you at a bad time?’

 

Scott:                     Yes.

 

Aaron Ross:          And by the way the principle is, when you call someone and they are not expecting it, whether it’s a true cold-call or it’s somebody you have traded emails with and you are just catching them, you need to give them — you are interrupting them from something. So you want to give them a few seconds to let their minds [technical difficulty] and you call it like ‘asking permission to talk’. So hey, did I catch you at a bad time, some people like to catch you at a good time, or phrase, ‘hey I know you don’t know me but — ‘or I mean those are like the common ones. Some people say, ‘how’s your day?’ or ‘how’s it going?’ I actually don’t like that one. I feel like that’s that kind of question which is like ‘I don’t know’.

 

Scott:                     [Laughter] Still trying to figure out right now.

 

Aaron Ross:          Yeah, but what happens is, if I say, ‘did I catch you at a bad time?’ people always say, ‘yeah, but what can I do for you?’ The point is, it’s sort of like your phone; so you know in the Maps, of you are a little bit — you go to Maps and you hit that little triangle which orients on to where you are, and then you can see what’s around you, that’s really what that question is doing. It’s letting their minds orient on to you and sort of getting ready to communicate because they are still finishing — or they are thinking about the email they are writing or they just don’t want to know who you are or there are these open loops in your head and they are just — it’s like if you start in on a pitch right away, I’m just going to get irritated because I’m not ready for you to talk. I’m not ready to input, I guess because that’s the —

 

Scott:                     It’s a powerful patter —

 

Aaron Ross:          Yeah, that’s the principle behind it. So it’s just giving them a few seconds to orient their brain on you and be ready to talk.

 

Scott:                     Love it man. So I heard, in one of your previous interviews, you say that you have managed to only work 25 hours a week or limit your work to 25 hours a week on average and for me, I mean that is a fascinating thing because a lot of people out there that are ambitious and have done things revenue like a hundred million dollars for Sales Force, they are not the type of people that are “working 25 hours a week” so I’d love just to learn a little bit more about how you have been able to achieve balance and just some of the benefits that have come from that.

 

Aaron Ross:          Yeah, well it’s funny where that came from. After I left Sales Force, this is like 2006 I spent a year at a venture capital firm as an EIR; I was basically getting paid to figure out what I want to do next and after three months, I was working a few months, I had a bunch of company ideas and I went off — I actually went to Japan and China for three weeks to explore and sort of let things digest. And I remember realizing you know what, I don’t want to start a company, I don’t want to raise money, I don’t want to start a software company; I’m not sure what I want to do but I know I want to be able make as much money as I want, doing what I love. I’m not really sure what that looks like yet, but I’ll figure it out and along this lines of I think really reflecting and seeing what was going to work for me, I don’t remember exactly what it was but I remember feeling like when I worked — the more hours — that working more hours isn’t scalable. If you are working 60 hours a week, and you need to double your output, what are you going to do, work on 120 hours? Which by the way, I have worked a week or two in the past where I did 120 at banking [technical difficulty] but this is not sustainable but [technical difficulty] in 2007 – 2008, I just noticed that when I worked more than about 30 hours a week, I was able to do more stuff but I lost a lot of these insights. Sort of the big picture ideas that could give me a real breakthrough, it’s a forest for the trees.

 

Scott:                     Totally, man.

 

Aaron Ross:          I don’t remember where the 25 hours came from, I just felt like that was for me but the hardest part was actually practicing working less because our default, in our culture, it’s easy to work a lot. Trust me, for you, or for most people I’d say, ‘hey, go work 60 hours next week'; most people are like, ‘well sure, I’m already doing 50, what’s the big deal?’ But if I was to tell you — let’s say you don’t have a job, let’s for the job part. If you are an entrepreneur and I say, ‘go work 25 hours next week’, the hard part is that mental — it’s like trying — practicing being okay with only working five hours a day for three or four days a week. And that’s hard. So I find that this decision — now for me that was what I felt was right, 25 hours a week — now it’s more like 35 because I’ve got more kids and it’s a — new book out and business is growing and so on. So 35 hours a week, it feels like a lot. It’s like a lot for me but it worked for me and what I found is that I could still get stuff done but I still would have a lot of these bigger picture ideas that I felt would be able to give me a quantum leap in what I was doing such as — some of the ideas that came into — like the book Predictable Revenue.

 

Scott:                     Got it.

 

Aaron Ross:          Or — and it’s been [technical difficulty] practicing it for years, it’s not — maybe say 20 or 30 hours a week, some weeks it’s more, some weeks it’s less but I do have a pretty — it’s not super-strict but  I have like a regular routine, especially with family and kids and work where Mondays, I do a few hours and then I have a date with my wife in the afternoon; Tuesdays are calls, Wednesdays are writing, Thursdays are calls, Fridays it’s like catch all. And it’s usually some days if I’m like 9:00 to 3:00 with a break or 9:00 to 4:00 with maybe a break and playing with kids in the middle; so there’s sort of a structure but it’s also flexible.

 

Scott:                     Do you have to discipline yourself not to take opportunities or commitments or things that are going to potentially encroach upon this equilibrium that you have created?

 

Aaron Ross:          Yeah, and actually I think that might have been one of the original reasons I did this was to create constraints or a way to help you create — increase your creativity.

 

Scott:                     Totally, man.

 

Aaron Ross:          Because when you have limited time, [technical difficulty] perfectionist and I felt like, okay it might take me longer to get where — say I’m starting a company, if I worked 25 hours a week, it might take me a little more years but it should be more authentic and I’ll be able to have breakthroughs — I should be able to create a more sustainable company that way that fits me better. It’s actually what I thought was off theory back then but it’s working. I mean — by the way, just so you know, this year, I’m going to guess, it’s between $600,000 or $800,000 something like that, $100,000 working maybe 30-35 hours a week and just me and the director.

 

Scott:                     That’s pretty sweet man.

 

Aaron Ross:          Yeah, and by the way, I don’t know where it all goes I have high expenses with a big house and lots of kids but —

 

Scott:                     I think the baseball team that you are fathering is one source I would say.

 

Aaron Ross:          Yeah, and I haven’t wanted to create like a software company yet, but I think the idea was [Inaudible 0:43:45] by working some hours a week, I guess I have done but I wouldn’t sacrifice these intuitive leads. I would have these constraints that would force myself to fair [technical difficulty] without throwing more hours at it because that’s what we tend to do — there’s a problem with work more hours and spend money. And also part of us wants to be balanced in the balance of life, but I think that was more of a side-benefit. I think the original, the reason I did it was to be more creative and smarter about business and making money and life.

 

Scott:                     I really love that man, I really love that and it resonates with me because when you are sprinting 100 miles an hour, you just aren’t as creative. It’s like I have seen it in my own life, like you don’t have — you don’t give yourself the mental bandwidth to be creative and also like when you do give yourself, you’re drained, you’re not sharp.

 

Aaron Ross:          Yeah, it’s exhausting. And honestly, like there are times like I said, two weeks ago, I was travelling plus I was getting the first part of a new book out and so I probably worked — I mean I don’t know if this is true or not; let’s say 40 hours maybe more of — to say 50. Once in a while you got to get sh** done and push something out of the door but in general, that’s pretty rare for me, I mean that’s exhausting. I have also just become much more focused. So now three hours of work, if I sit down and it’s just very intense so I get — I know I’m much more focused and I get a lot more done in a small amount of time than when I could just basically screw around all day. I had unlimited time to do it.

 

Scott:                     You have to be. So, Aaron one of the questions that I like to finish with — and this is for listeners because we have learnt a lot today, we’ve talked about building sales teams, lead generation, the importance of specialization, all the way to specific tactics on cold calling to how do we maximize our time and really constrain ourselves to actually produce better work. But the question I would like to finish with is, if you had to give one little piece of advice to people out there that are looking to get a competitive edge in business or overall, whether they have a sales team or not, what would that be?

 

Aaron Ross:          Read Predictable Revenue. [Laughter] But let me think about — I have one answer —

 

Scott:                     By the way, I feel like this is a ‘how was your day?’ question. [Laughter]

 

Aaron Ross:          Well, sort of it is, but I have one inherent answer which is a little more —

 

Scott:                     Go with the gut man!

 

Aaron Ross:          Okay, well, let me start with this one. It’s learning how to listen to yourself; okay, what does that mean? I want to say a lot of my breakthroughs in my life which includes, kids, it’s like this 25-hour workweek it’s like eight kids, it’s like — it’s also related to money, but it’s also about how do you make — I mean if I don’t make a million dollars this year, it’ll be next, still doing the 25-hour or 35-hour workweek and I love — my work is great and I get a lot of fulfillment out of it. So how do you make that kind of sh** happen and — I think a lot of it for me is learning how to listen to myself. I call these ‘whispers’ and you can’t hear them when you are running a mile a minute. So slowing down really helps but it these whispers that we all hear which is ‘I should travel’, ‘I should start a business’, ‘I should move to Brazil’ which you did, ‘I should write a book’, I should do this, ‘I should study French’, ‘I should break up with my girlfriend or boyfriend’ and we ignore those all the time because they are not practical, I don’t have the time, I don’t have the money, I’m an engineer not an artist. There’s a lot of examples, it could be my brother came out being gay when he was in college, and I know there’s lots of people, men or women that are gay but they don’t realize it until they start listening to those whispers until maybe they are teenagers or pre-teens. Some people know or some people don’t or they listen to the whisper [technical difficulty] I shouldn’t. In business, ‘I should start a company’ or ‘I should quit my job’ or ‘I should get a job’. I mean how many solopreneurs struggle and they can’t make money because they think, ‘wow, I saw Tim Ferriss did it, so why can’t I?’ The best way to fund a company is job; where else can you get paid to learn? Seriously, if you have the attitude that a job is a place where you can learn, not just — and to make money, by the way, if you are a single mom, sometimes you just got to make money. Or a single parent, you sometimes just got to pay the bills. But — so the point is whether it’s — should you quit a job or get a job, start a business, have kids etc, so these whispers that we ignore and I think [technical difficulty] I had for years and I’m still getting better at it. I found out that that has really been — when I followed them, and they start of quieter, I do something with them, they get louder as I go like writing books, kids, how to make money, how to make more money because three or four years ago, I was making 80 grand and then I got married and I had a lot of motivation so it’s like how am I going to go from 80 grand a year to $800,000 a year? I’d say, listen to those whispers. So that would be the advice, try to make it as specific as possible because — people tell me to go find out what I love, that’s not so easy. You don’t know it. How many people know what they want to do with their lives?

 

Scott:                     You got to go and try stuff.

 

Aaron Ross:          Yeah, you got to go and try stuff and so you can’t just say ‘hey, do what you love’ because most people today don’t know what that is. But that is part of along the lines of listening to those whispers wherever they are. So whether you call it intuition, maybe you’re a spiritual person — I don’t care but that is the thing that has really worked for me.

 

Scott:                     Dude, I’m so glad you mentioned that because I know that there’s probably people out there listening who might have an inkling to go pursue something and get some answers. Like myself, I wanted to see if living in a foreign country like Brazil, where I though the most beautiful beaches, women and steak was, was going to fulfill me and I had to go find it out just to give myself a peace of mind but I hope —

 

Aaron Ross:          And now you’re moving back —

 

Scott:                     Dude man, USA is sweet, I am glad to be back. I feel blessed, so incredibly blessed to have been born there and to live there and to have opportunities to spend my life there. But, I’m really just excited that you talked about this because people out there that probably have some whispers and they probably need to explore and maybe this gave them the little extra push they needed to go [Inaudible 0:51:02] questions.

 

Aaron Ross:          Yeah. And just start with a baby step; you don’t have to move to Brazil, you could visit, you could read about it, you could buy a book, you could watch a video; it’s okay, — honestly I think the last few years it’s just been lots and lots of baby steps that have been adding up to more and more as I go.

 

Scott:                     Totally man. Well, Aaron, I want to thank you so much for coming on the show today. If people want to learn more about you, more about the books, the old one, the new one and all that good stuff, what are the best places for them to go?

 

Aaron Ross:          There’s two; Predictable Revenue dot com is the site but I would actually go to Predictable Revenue dot com slash Triple because that’s where the new book is coming out, The Predictable Revenue Guide [technical difficulty] Sales, so Predictable Revenue dot com slash Triple. That’s all the [technical difficulty] stuff and actually, I’m not as active on it right now but if you’re interested in like the 25-hour work week and kids that we are adopting, so that’s how we got to eight, we’re working on eight now and we got married three years ago so you can try to work out that math if you can. But fulfillment and sort of making —

 

Scott:                     Are you scaling right now?

 

Aaron Ross:          [Laughter] family — well that’s why I need predictable revenues because the family is growing and so is the business.

 

Scott:                     Got to gobble in those constraints, right?

 

Aaron Ross:          Yeah, trust me, it’s a good kick in the ass to — I mean that’s where the motivation came to grow the income ten times but that’s more or a personal blog at Pebblestorm dot com.

 

Scott:                     I’m going to go check that out man, now I’m interested. But thanks again for coming on the show, this has been awesome and I look forward to checking out the new book when it comes out.

 

Aaron Ross:          Yeah, I’m excited, I think it would be better than the last one.

 

[End of transcript 0:52:48]

 

 

What did you learn in this interview Aaron on building a sales machine?

Have you ever tried separating the different parts of the process amongst your team? Was it successful?

A Step by Step Guide to Pre-selling With Carl Mattiola

Most people who try to start a business begin building something before getting a dime from a single customer…

“Que triste” as my Brazilian friends would say!

Today I’m pumped to chat with Carl Mattiola, founder of ClinicMetrics, about pre-selling and the exact steps he used to get paying customers before he built any software.

carl mattiola

In this interview you’ll learn:

  • The process he used to go from no idea to settling on building clinic metrics [3:42]
  • Which prospects to start with when you’re ready to pre-sell [10:03]
  • The logistics of his first pitch and what happened immediately after [20:39]
  • The power of “price anchoring” and how to utilize it in pre-sales [26:29]
  • Common objections he received in his pre-sales process and how to overcome them [31:58]
  • Tactics to de-risk a prospect’s investment so that they’re more likely to pay upfront [33:49]
  • The number #1 tip he’d give to anyone looking to pre-sell a product [38:06]

Also don’t miss the free copywriting checklist below the video…



As a free gift from Carl and the awesome folks at The Foundation you can get free access to The Foundation Copywriting Checklist, a top seller on Mixergy and Auppsumo, here: http://thefoundation.com/lifelonglearner/

If you enjoyed this interview, definitely check out ClinicMetrics, The Foundation, and Carl’s excellent blog. You can also follow him on twitter @cmattiola.

 

What questions do you have about pre-selling products? Please share them in the comments below

Building SaaS Businesses, Enterprise Sales, and Bootstrapping with Spencer Fry

Today I’m pumped to bring you an interview with my buddy Spencer Fry, Co-Founder of Uncover and all around awesome guy.

Over the past ten years, Spencer has built 2 profitable companies without raising a dime and is now well on his way to his 3rd. #studmuffins anyone?

Spencer

In this interview we talk about:

  • The founding and developing of his first successful company Typefrag which is still going strong today with 30+ employees
  • His transition to Carbonmade and how to bootstrap a SaaS business while doing consulting work
  • The number one thing that all aspiring programmers should have if they truly want to learn how to code. Maybe why I failed…
  • Why to never give something away for free, even your a startup with no customers or partners [21:00]
  • Thoughts around whether it’s a good idea to give something away in order to generate leverage for future deals?
  • The difference between enterprise and consumer web sales (muy importante) [27:30]
  • Some strategies on how to handle demonstrating ROI on a product where the output, like employee happiness, is hard to quantify
  • The 2 most important things everyone should know about bootstrapping [42:00]

[leadplayer_vid id=”521C94A8DB93B”]

 

Show notes:

  • Spencer’s past companies Typefrag and Uncover
  • Vin’s blog – referenced multiple times because it’s awesome
  • Article on building for the enterprise
  • Article on maintaining ball control during a pitch/sale
  • Influence by Robert Cialdini. *Read this is you want to hear the word yes more often
  • Quote I love – “The minute you raise money you have a countdown to your death. But with bootstrapping you almost have a countdown to your birth”

If you enjoyed this interview, definitely check out Uncover and Spencer’s excellent blog. You can also follow him on twitter @SpencerFry

In my next interview, I’ll be chatting with Timothy Kenny about accelerated learning. Subscribe below so you don’t miss out!

The Story of LaunchBit and Hustling With Elizabeth Yin

Today I’m pumped to bring you an interview with Elizabeth Yin, Co-Founder of LaunchBit, the leading ad-network for email newsletters.

Elizabeth Yin

You know those people that peak your interest that you just kind of sort of end up just following from a distance? Elizabeth was totally one of those people for me until we did this interview. First I saw LaunchBit and was like, gee that’s a good idea. Then I started subscribing to LaunchBit’s newsletter of highly curated customer acquisition articles (woah another good idea). The she launched a conference called Hustle Con…at that point I was like okay, I seriously need to meet this person! Anyways, Elizabeth is a total rockstar and has an awesome story so definitely check out this interview. In this interview we talk about:

  • How Elizabeth exercised differentiation to get into MIT business school just one year after being rejected
  • The biggest lessons learned on her first startup and a quick anecdote how you can approach pre-selling in B2B
  • The early days of LaunchBit and a detailed account of their lean approach to validating their idea (warning: ghetto, non-tech awesomeness here)
  • The first place they went to get their initial customers and why you may or may not want to go there [24:00]
  • How they created bandwidth so they could hustle more to expand their marketplace <333
  • An outline of how big your newsletter needs to be to realistically start making money off it with ads on LaunchBit
  • A brief recap of Hustle Con
  • The trait that all non-technical founders need to have in their toolkit…hint: it begins with a “p”

[leadplayer_vid id=”520D64751A96B”]

Subscribe for new vids on the reg

If you enjoyed this interview or know anyone with an email newsletter, I recommend checking out LaunchBit. You can also follow Elizabeth on twitter at @launchbit

In the next interview, we’ll be chatting with Spencer Fry, Co-founder of Uncover and previously Carbonmade. Make sure to subscribe to my channel on Youtube so you don’t miss out!