Diagnose Before You Scale. Q&A | Ep 943

If you want to have a consistent world-class sales team, the process has to always go above the player. No one is above the process. And I do think that 95, maybe 98% of sales teams have no idea how sales training, how sales culture, how any of this stuff works. They just hire a bunch of people, see who closes deals, fire the rest. And so then you just have a bunch of mercenaries who work for you. But there is no culture, there is no team, and it's every man for himself. And that is what creates this volatility in sales. And some guy says something and he closes a deal and the other guy's like, I'm going to try that now. And there's no consistency across the board. And that also gets you in trouble long term because they start promising things and making deals that you can't cash.

Hey, Alex, what's up? My name is Francis Aguilo. I am a real estate wholesaler. Okay. We're currently averaging about $450,000 a month.

Okay.

In revenue. I would like to be at a million.

That's your spread. That's what you're making, or that's like house volume?

Uh, that's gross.

Okay.

So gross.

So what's your, what's, what's your spread on that? What's your take home on that?

So we are at 40%, so right around $250,000, $240,000.

Interesting. Weird. That's high. What kind of, what are you wholesaling? All right, so here's the, um, he's like, have you heard of brothels? So imagine a brothel, but now it's all metrics. Okay, keep going. You're good.

Okay, but here's the challenge, uh, we run into. So we're currently at $450K average. Yeah. We've had $700K months this year already.

Okay.

The challenge is every time we get to those numbers and I try to, hey, you know what, it's time to ramp up. For some reason we tend to tank to, you know, 200, 250.

Okay.

I'm sick. I have cause to believe it's the sales team and just, you know, they have those power months where everyone, you know, takes home 20, 30 grand. And then the month after it's like—

Are they pure commission or is it split?

So there is a base salary.

Okay. What's the split between commission and base?

So they're at 42 base.

Okay.

Uh, per annum and then 10% of the assignment fees.

You have an ops issue, which is sales ops. And so it's like, this is going to be much more weedy in terms of like tactics to answer this question. Um, but it's like, there's probably like 20 things that you need to be doing and you're probably doing like 13 of them and the other 7 are going to be the thing that make the difference, uh, in creating the consistency of the team. That's at the surface level, at the, at the, at the deep root of this is who's the leader of the sales team?

I do have a sales manager.

Okay. So he or she is the problem because like sales at the end of the day is a culture game. Well, everything's a culture game, but like sales, you can feel it so quickly when things are good or not good because the performance, the feedback loops are so fast. But for whatever reason, you do not have a culture of consistency within your team. I would wager that script adherence is low because you have such variability in close rates, unless there's a change in lead quality, which would be something else. But are the leads the same like this month as last month?

Yes, the leads are the same.

Yeah. So it's a sales discipline issue, which then comes down to the training cadence, the scripting. How people are being managed on a daily basis and weekly basis in terms of their career goals, how like you're doing morning meet, like it's, it's, this is all sales ops. I could like just start talking about sales, but like, this is a pure sales ops issue. And so at the, like there's, there's a two-step, like I would approach this in two steps. Step one is we should do all the stuff that we are not currently doing, or we should be doing. Everyone should be reading the same script. If they're not reading the script, why are you on this team? Right? We need to have training that's every day to make sure that they are saying things the right way. We need to make sure that everyone memorizes scripts. And you guys might have seen the YouTube video I put out like 2 days ago about this, but like, they have to breathe the script. If they were not saying the script word for word, you cannot be on this team. You cannot take these calls. I'm getting these leads and not for you to go cowboy and make shit up. And that then if we cannot solve that problem, because for whatever reason you keep trying it and they don't adhere and they go off script because they just wanna close the deals, it means you have a cultural issue, which is a leader problem because it means the leader is reinforcing behaviors that get people to go off script and there's no consequences for doing it. And so if you want to have a consistent world-class sales team, the process has to always go above the player. No one is above the process. And I do think that 95, maybe 98% of sales teams have no idea how sales training, how sales culture, how any of this stuff works. They just hire a bunch of people, see who closes deals, fire the rest. And so then you just have a bunch of mercenaries who work for you, but there is no culture, there is no team, and it's every man for himself. And that is what creates this volatility in sales. And some guy says something and he closes a deal and the other guy's like, I'm gonna try that now. And there's no consistency across the board. And that also gets you in trouble long-term because they start promising things and making deals that you can't cash.

That makes a lot of sense. I, um, up until now, I mean, we have scripts, but they're more of suggestions, guidelines.

Yeah. I mean, I've done a lot of sales. Um, like this is a straight out of the book checklist problem. Like we have to do all of these things. If we do this entire checklist, we will get this outcome. If we can't do this checklist, the leader is the problem because they don't know how to reinforce culture, which then means that they're not able to get the right people on and the wrong people out, which sometimes means we might have to fire half the team to get the right people in so that we can build the culture we need to get to where we want to go. Because you are in, like, I showed the shapes of businesses. You are in a sales and marketing business. There's functionally no delivery. Like, you're just basically like, are you guys doing outbound or like smiling and dialing? Or do you buy leads from setting teams inbound?

It's Google Ads.

Google Ads.

Yeah.

Okay. So you have inbound leads that are coming in and then you close like like, that's the business. Like, you buy media, you sell shit. And so like, this has to be a core, like, you have to be world-class at this if you want to be world-class at wholesale. Gotcha. But that's the constraint.

In the events that I have to, you know, let go of half the team because they're just not good enough.

Yeah. Where do you suggest I look for, um, it's not about where, it's about how. So it's not like I'm going to find like, the better you get at training sales and creating consistent sales processes, the less skill someone can have and create a consistent outcome within your team, which becomes the arbitrage of your business. Just like I said, the cleaning thing before, if the whole constraint of that business is going to be finding, you know, basically taking a human being and then turning them to a great cleaner that actually shows up on time, you have to take the raw input of somebody who has no skill and just has work ethic, just has energy. And in 14 days you can get them closing deals on wholesaling. That box is the value that your company— that is your IP. That is the trade secret. That's how your company is valuable. And so when I say who versus how, like, where do I find these people? You could run Indeed ads and find, like, for this caliber of salesperson, they're everywhere. Uh, the issue is then what is the process and what are the expectations we're setting for those people as they walk in? And so typically when you're doing high volume sales like you are, how many guys do you have on the team?

Currently 17.

Okay.

So when you have that, that, I mean, it's, you know, mid-size, uh, someone comes in, uh, usually you get constrained because the amount of churn you have and people quitting, leaving is about equal to what you have to hire. And that's what keeps you stuck. Right. And so it's a process issue kind of on the demand gen side for talent. And so usually we look at that and say, okay, what part of this can we screen ahead of time? So it's like, let's send them the script before they even show up. So people apply, we send them the script. And then send us a 60-second video of you saying the script. And then from the 60-second videos, we're going to invite people to a group call, not one-on-one, because we don't have time for that. And we're going to go quick drill, say the script, give a piece of feedback, see how they do it again. If they can take the feedback well and they were prepared, great. It means they're coachable. They have work ethic. Awesome. Now we can take you to a job offer call. Somebody, you know, has attitude on the coaching. They're out. If someone doesn't show up prepared. They're out. Very easy screening. And so you take 10, you pick 2, pick 3, they go to the next one, you make job offers. And that's the flow. But like the entire sales process of selling them on selling for you sets the frame for how the company operates. Like how disciplined you are and how militant you are in terms of how you set the frame for this is how we fucking do things here. Either get in or get out. I do not care, but we win. And if you can set that frame, you will attract winners. And winning's not for everybody. And so that means that on the team, there's probably some losers and it's not for everybody. So that's the decision you make. And that's from top down. So there's the tactics and then there's the root issue. I would try this first. If this doesn't work, you have to probably gut things. Thank you. I know he's the only person struggling with sales here. Everyone's like, I saw like more notes. Like, okay, group interview. Yeah, yeah.

Hi.

Go ahead.

Okay, so my name is Sasha. Um, I sell designer bags and sunglasses.

Cool.

And, uh, we do about $6 million a month. No, so sorry, a year. Sorry. $6 million a year.

Oh, cool.

Um, and I would like to do $38 million.

Precise.

Yeah. $38 million.

Okay.

Um, and what's stopping me is recruiting.

Why $38 million?

Um, just because I figured, you know, $100,000 a day, something like that. Round up, down, something like that.

Okay.

It got the roundabout. Um, and, um, I mean, obviously more.

Yeah.

Yeah. Okay. But, uh, I was thinking $38 million would be fair.

Yeah, that works.

Um, and it is just recruiting. Um, recruit—

oh, recruiting is the bottleneck, as you're saying?

Yeah.

Okay. Got it.

Um, my house cleaner was my, uh, first employee and she just— and because I consumed yours and Layla's content so much that I was like, I'm gonna be these two people in one. That's me. Yeah. I'll be these two people. Oh, and as a result, I have, um, a great team.

Okay.

A really great team. And it's just a matter of being militant in the, um, the recruiting process.

Okay.

Um, The, we do sell on Whatnot quite a bit.

So who do you have, what's stopping you?

Hmm.

So you make money, $6 million a year selling handbags.

And sunglasses.

And sunglasses. For you to sell more handbags and sunglasses, you need more people to do that?

Yes, because we, um, we only go live for about 5 hours a day because we get tired. It's just me and Adam Hernandez. Okay. Well, me and, um, I have 3 salespeople, but, um, it's just we get tired. We could, if we were live more often, we could create more.

You're going live on like your Instagram page or your what?

On Whatnot.

Okay. Got it. And do you have like a big following there? 110,000. And so you're just selling to that same base and if you just sold for longer, you would make more.

A lot more. I could do $100 grand in the show.

Okay. So you just need like 2 more salespeople who are going to camera work?

Mm-hmm. But yeah. Mm-hmm. And then the recruiting as well.

Recruiting for what?

Uh, packing.

'Cause we, we do a lot of, um, you do your own 3PL or not third party, but like you do your logistics? Hmm. Why?

I didn't, I didn't know you could have other people do it.

Boy, oh boy. Yeah. Step inside. Uh, yes. So, so functionally, like, because of the nature of the business that you're in, um, we have to think like, cause we have to, we have to consolidate resources. I'm not normally somebody who's like, uh, let's, let's cut, you know, parts of the business out. But unless your shipping is some key differentiator that you have, like Amazon shipping became a competitive advantage, right? But unless that's like some differentiator, then shipping for the most part is pretty commoditized. And there are people who all day long, they think about like saving 15 cents on cardboard boxes and tape and packing peanuts and all that shit. And I think that that You having to like think about that and run a functionally a warehouse at the same time as running a marketing and sales and talent business slash media. That's not where the value is. The value's in the distribution and the sales. And so I would say like, can we outsource this, the logistics part so that you can just go all in? Because all we had to do is you get 2 more salespeople and you get $200,000 a day. We should do that.

We have to physically show the product.

Like, well, no, I'm not saying you don't have like some product on hand. You just don't need a warehouse.

No, we do need it cuz it's like, go, go, go, go.

Okay.

Speed.

We run probably about, so you're like, we sold this item to this person is how you do it.

Yes.

Okay. So, um, got it.

It's kind of like a warehouse. It's, yeah.

Okay.

That's fine. Um, All right, so you just need to hire more people. So what's stopping you from hiring more people?

The talent.

Um, the talent to hire more people.

Well, I'm, I'm learning now. That's why I'm here.

No, no, you're good. You're good. Um, so I'm saying like you have two sets of roles. You've got warehouse folks and you've got people who can get on camera, right? So what are you currently doing to get each of those people?

Well, we had ads on Indeed.

Okay.

But I didn't realize how militant I had to be until I came here. Meh. It's, it makes a lot of sense, right? I didn't know that there's that many interviews that were required.

Um, and that's more for the warehouse side, correct?

Both because sales is bad.

I think that you'd be able to find salespeople, like I would probably look at Amazon affiliates.

How much would you pay them?

Percentage.

Well, that's the thing now, it's so Okay, so it takes skill to do what we do.

Yeah.

It takes skill.

Like, agreed.

Like, um, for example, my girl is better than me. Great. She's better than me. And it's like, not only is it motor skills, it's, um, presentation and entertainment.

Like, I, I get it. I understand. I did a live for 3 days. I got it.

So finding and training that, uh, that's definitely a process and takes time.

Yeah. The question is whether you wanna buy or build. Do you wanna buy the town or build the town? Building the town is cheaper, takes longer, harder. Buying the town is faster, more expensive. Which one do you, which one feels right for you?

We're not always, so we are profitable per show. Yes.

Okay.

Profitable per show.

Uh-huh.

But sometimes what ends up happening is Like, let's just say it's a Wednesday, right?

Are you on cash-based accounting or accrual? Probably cash.

Yeah.

So you might, like, if basically if you run a physical products business, which you do here, you're like, okay, we made money. Now let's take all of that profit, gross profit that we had, and go buy more shit so we can sell more shit. Right? Right. So this is where like you probably have, what's your, like, what's your financial the financial side of the business, the financial ops look like?

My accountant handles it.

Your who?

My accountant.

Oh, your accountant does it. Okay.

Yeah.

You will need to have soon a relatively strong finance person who can give you better forecasting so that you can, it's not just like how much cash we have in bank account, let's go buy more shit. It's like we can only afford to buy this much given this growth rate that we want to have. Otherwise you'll get into these probably cash crunches that you're feeling right now. It's not that the business isn't profitable because I'm guessing the headcount's not super high.

So our, so our shows will make anywhere from like $5,000 to $7,000 in profit depending on like the volume that we did that day. Yeah. So we know the profit like per show. However, um, that's where the skill comes into play. Like if a show's not going well, we need to have that person trained to be able to do the, do the thing. And, and so that's why not knowing how much to pay them is the—

well, I mean, I think doing a percentage would make sense.

Percentage of profit.

Yeah.

Like a salesperson.

Okay.

And so you can buy or build that, right? So you buy it as I would just go to mini micro influencers who are already like on Amazon hawking stuff and be like, well, they already do livestreams and they already do sell shit. And I bet I could teach them to do this for me. That is a buy version. 'Cause you already know it's already proven. You're just saying, hey, do it under my umbrella. The build version is that you have to kiss a lot more toads and try and look for who has already built in a bunch of soft skills.

Mm-hmm.

And then you can hire for the small skill deficiency that you know how to train.

Okay. So Amazon affiliates.

Well, you could do either, but like, yeah, I mean, obviously this is gonna be a lower risk thing and then you just have to have some agreement that they're gonna only sell for you for X period of time.

Mm-hmm. Like a contract.

Yeah. Like a contract.

Thank you.

Yes.

Thank you.

But I would, but big picture, cuz I wanna make sure that you're good. Um, the Indeed warehouse stuff, that's just like commoditized. I mean, you have a warehouse, maybe you have to have it for your business, but like, I don't see that as like, that's not a core differentiator. You might, you're not different because you have a warehouse behind you. That's not special. So the roles that you have there, it's like, they need to be like, have a pulse, have a good leader there. Let them just deal with it. Your, your star factor is going to be your ability to train people to sell. And so that's like, where is your, what is the, like, what is the true pinpoint of where the most value gets created for you as the founder, the entrepreneur, is that you need to be able to take somebody and teach them to sell. And you have to break it down in, in terms of the most concrete language you possibly can. And so think of everything purely in terms of behavior and do, do not use any amorphous words. So it's like, I need you to have higher energy. That means nothing. I need you to raise your voice. I need you to talk faster. I need you to have your shoulders back. You have to describe things that people can see, and then other people describe them as having high energy, having charisma, having confidence. And so if you want to teach someone to present, you have to tell them what to do with their body and their voice, and it will be far faster for you. And what you'll find is the training— the reason it takes so long for people to train where they can, where they can't train salespeople or presentation people is because they literally do not use words that other people understand. Like, this is the problem. This is why most companies cannot teach people to do shit because they say, have more charisma. And then the person listens and is like, I'll translate that into what I think charisma means, which who fucking knows what they think it means. Right. And then we're just playing this telephone game where no one agreed on what are the behaviors I want you to do. That will compress the amount of time that it'll take you to get someone up to speed. And two, long-term, if you can develop the sales training, then you can have a stable of stallions that are on 24/7 for you working in your, in your barn. So that, I don't know why it's animals now, but let's go with it.

So that, that's actually, that brings up the, a good point. So I, I, I have, um, so my girl, uh, like I said, she's my house cleaner. She shows up at my, my door one day. She's, she's like, hey, I wanna be you. Yeah. And she's like, I'm a copy and paste of you. And she became me.

Yeah.

Now there's a little bit, like, a little bit of a— how can I— because obviously I had to learn the care part, like, from Leila. Um, so I learned the care part, um, and, um, now I have it. But then I've seen her— I mean, I've seen situations kind of like not go the way they should because she's too— she's a copy and paste of me from yesterday. So I'm starting to see those What's the problem?

Would you put her in front of the camera, have her sell and get her out of the building? If like, if she can sell.

Yeah.

So let her sell. Don't have her manage people. Have her sell.

Got it. Understood.

Thank you.

All right.

Got it.

Let's see.

Good talk.

Yeah.

Yeah. Thanks.

Hi Alex.

My name is Sebastian. 4 Years Learning. Thanks for everything.

Yeah. Thanks for coming out from Australia. Melbourne. Yep. Melbourne. Nice. Melbourne. Sick.

Bluesense Digital. We sell paid ads and growth advisory to 8 and 9 figure e-com brands.

Sweet.

We do 3.5.

Okay.

We'd like to be at 10, then 20.

Okay.

Feel super clear on our top priority against our supply constraint.

Oh, talent.

Yeah.

Okay.

Talent acquisition and first getting LTGP on talent. Um, something that's unclear is we've just established this past 12 months our leadership team. So we have 2 team leaders, a head of growth and a head of strategy. They're all just on salary at the moment. Um, but putting together or building an incentive, a great incentive plan for them as a group to carry us as we 2 and 3x headcount.

Um, I would just go profit share pool, 10 to 20%, and then they get slices of that slice. So it caps. So basically it's like if you say like simple math, $100 a year profit, $20 is always gonna be allocated, or 20% is always gonna be allocated to all leaders. Um, and so they get slices of that pool, but then you always have 80. And then they think like you do, which is like, if we're gonna bring this leader and we gotta give up some of this pie, But they should be able to grow the pie, which is the exact same math that all of us do when we bring someone in. Yeah. And so it gets them thinking more like owners. That's the simplest way I could break it down. Yeah. So are you planning on trying to sell the business anytime soon?

Uh, potentially.

Yeah.

Okay. Um, if you want, you can include a profit's interest in the, in the sale, which you can have be proportional, uh, to their interest.

Yeah.

And then if they leave, comes back to you.

How would you apportion that percentage split against those different roles?

So first off, you're gonna wanna leave probably two-thirds for future talent if you wanna go big. And so do not be like, okay, I'm gonna blow my whole like slice of pie on these people because the best talent is in the future. It's not right now. But I'll give you the, the pitch or the walkthrough that I have with, um, with somebody who's in this, in this position is that, and this will probably apply to half of you, Um, who here has somebody that they were considering tying into your business? Okay. So I'll give you quick, quick, big picture advice. Um, if you never want to sell the business, don't give shares away. The only thing that is guaranteed 10 years from now is that you will still be in the business. That's it. Everything else is not guaranteed. So I would not encourage you to give real shares away. Thing one. Thing two, there are four things. That equity provides. One is cash flow. The second is sale bonus, sale dollars. The third is risk. And the fourth is control. And so when I have a conversation like this, I'd be like, okay, cool. So do you want any risk? And they're like, no, I don't want any risk. And you're like, okay, cool. So we don't want that. Uh, I'm not going to give you control. So that's off the table. So all we have left are cash flow and the chance that we sell. And that's what we're going to do. And so, um, I'm sure in Melbourne, I don't know the legal situation, but like there's a version of we'll give you a profit share, which comes off bottom line. And, uh, in the event of a sale, you'll get a sale bonus. Now the issue with that is it's going to be taxed as income. At least it is in the US if they have a sale bonus, um, rather than capital gains. But there is no real other alternative because either they have to take on risk and not get control and pay taxes on you gifting to them, or they have to buy it and give you money. Most people don't want to do either of those things and you have to agree on evaluation. It's a whole fucking mess. And so it's easier to just say, I'll give you some money today. And if we sell, you get money tomorrow. And if you leave, you get neither.

And then that sale, you know, I've just said that the sale number is predetermined.

There's a zillion ways to slice this, but the simple way is like, if you have a 10% profit share, like for the whole company, right? And somebody, let's say, gets 10% of that. So they have 1% of the profit. You could say, when we sell, you will get a proportional amount relative to the total, uh, for that 1%. So they'd get 1% of the sale. Sure. Yeah. And when you write that, make sure that it's the percentage of cash, not calculated on the total value of the sale. Yeah.

The head of growth is pretty much the sole sales guy.

Oh.

Um, or our first sales guy, not the founder lead. He'd be at this table, commission on Clipper sales plus this percentage of profit share, or it's one or the other.

Is he a founder?

No.

It just sounds like he's your sales guy.

Correct.

Yeah. I don't— New role for us.

Yeah.

Well, he gets commission. Yeah. He already has a leadership table. Uh-huh.

The other guys at the leadership table.

Did he do marketing?

He started to, yeah, is developing into, he's backfilling that head of growth role.

Giving equity to sales guys, like kind of like one of those day one mistakes that I'd prefer you avoid.

Yeah.

So I, if that guy's like really ambitious and really hungry and smart and you think that he's going to be there long term, I would say, I want you at the leadership table. I don't think you're ready there yet. This is what I would need to see and just make it quantifiable.

Yeah.

You need to get like, you needed master demand gen, which creates 5 deals a week, 5 deals a month, whatever that number is that you'd like. If he actually did this, you'd be like, you earned it. So whatever that is.

Sweet. Thank you.

Rock and roll. Yeah, you bet.

My name's Trenton. We sell roofing in the metro Detroit market.

Sweet.

We're going to do about $3 million this year. We'd like to be at $10 million. Okay. Quick context. We were primarily a storm contractor.

Yeah.

Storms have kind of vanished in our market, which was—

hell, right?

Yeah.

Global warming back here, you know, climate change, whatever.

Actually, the best thing that ever happened because it allowed me to step into retail.

Okay.

So over this last year, I've really had to, like, rebuild my business because right before that we had hit $5 million 2 years in a row.

Okay.

And now we're seeing this drop off. So my biggest constraint or what's stopping me is that For the last, you know, 8 years, all of our lead gen has been from—

whether from doors. Okay.

So it's been 100% door-to-door lead gen. And now when we're trying to knock for retail, it seems to be like, like heavier of a weight on the team.

And when you say retail, what do you mean?

So like just people in market that need a roof.

So like residential. Residential. Okay.

Yeah.

And when you were doing door knocking before, you were knocking on Residential doors. Okay. So it was the—

well, we were getting funding from the insurance company.

Got it. Word. Okay. Yeah. Yeah. Okay. So keep going.

So now, um, with me being a door-to-door guy, like purchasing leads and all that was like sacrilegious to me.

Okay.

So there's some limiting beliefs there, um, that I started to, you know, explore last October. We bought—

I just want you to be lead curious. That's all I'm asking.

Yeah. I, I am, I'm very lead curious now. And, uh, But I basically got slaughtered learning this.

Yeah. This whole like acquisitionary binary, you know what I mean? Like be non-binary with your leads, like as many as you want. Yes. Yeah.

No, that's what I'm trying to do here.

And when we did purchase leads and I'll give you the unedited version, by the way. Yeah, go ahead.

And when we started to, you know, stack the guys' calendars, there was a big culture shift. Yeah. Um, where we actually saw like more buy-in from the guys, but then like the door knocking just pshh.

Yeah.

Went.

Because it was easier.

It was way easier. Yeah. But, um, like our CAC and all that was absolutely horrid, right? So I was spending like $7,500 just to acquire one customer over the summer. Um, and it wasn't sustainable. So I just—

What'd you make from a customer?

Um, on average $6,500.

So that does not work.

No, it doesn't work.

Yeah.

And it was just like, uh, a lot of the marketing agencies that we worked with were like younger people. They were like using AI tools, go HighLevel, like—

Yeah, sure.

So we decided that we were gonna build it in-house.

Okay.

So with that being said, now it comes into, you know, a leadership issue because I need somebody that like knows how to, you know, market better than I do.

Mm-hmm.

So that I can focus on training and—

Can I pause you real quick?

Yes, please.

Okay, cool. So you're at 3, you want to get to 10, you rebuilt it from storm chasing to just straight up door knocking whenever. Fine. I think it was a good idea. Um, you had a door knocking team. You took the same sales guys, brought them on leads that you got them. They got lazy, fat, and don't want to do door knocking anymore. So great rule number 1, outbound and inbound are separate teams.

Yes.

Inbound is what you graduate to. And so if you're an absolute savage, like you just take children's souls and just rip them out every day because you're a terrible person. Um, But you're just unbelievable at sales. Then and only then do you get the opportunity for me to feed you leads because these are the most expensive leads that we have to work very, very hard for to make sure. And like, we cannot waste them on anybody who cannot close everything. And so thank you. I hope that was an amen. Um, and so, so first off is the team should be separate, but you're in this mix now. You're in a little bit of a mess. And so my, my two cents would be like, take that because I'm sure their commissions have gone down since they now are selling nothing, basically.

Yes.

Yeah. So I would say, guys, my fuck up. I went to this thing. He told me I did this big boo-boo, which is inbound and outbound were together, which is not how it should be. Everybody get back on the streets. You guys do that. And then for the absolute savages of you, because you can usually have far fewer people on inbound, that becomes the Christmas tree of the career path. Because on inbound, I can feed you and you can do like 5 sales a day. You can't do that door knocking, right? But I can— you can do it if I'm feeding you leads that are already qualified, already set, already gone through a VSL, whatever, um, in the sales motion. And then those guys can absolutely clean up, but you get— you earn the opportunity to get that level of commissions. Now the commission structure should also be different on inbound because you have to pay for those leads. So it's a different role. They graduate to it. It's more volume, lower per, but it's more reliable, which guys with families, things like that. If you have a bad day, you close 2, and a good day you close 7, it's different than you have a bad day, you can close 0, 0, 0, right? It's much more, uh, it's much more stressful. And so guys will be happy to even give up, they'll even make the same money, but just have it be more reliable. They'll be make, and you don't have to be in the sun.

So, so then we should hire for inbound sales.

Yeah. Or take one of the guys you have who's really good at it. Take them all around. Um, and put everybody else back on the street so that you just funnel everything to that guy who, 'Cause then you can iterate faster 'cause you're new on this. And so you want to, you never want to have too many no's. 'Cause kind of like the brick analogy I gave at the beginning, the more no's there are, the more likely something's going to fuck up. Right. And so it's like, I know this is an absolute savage salesperson. If they're closable, he'll close them or she'll close them. And so then the only variable we have is just what offer slash lead source am I getting? And like what process are you going from lead to talking to them? Those are the only variables you have to play with and you can control. It's much easier to iterate on that. And then get it to go faster.

So then I wanna hire a marketing director or leader, um, to manage that. Now Tim, like, was blowing our minds in the workshop.

Like, he does, he does do that. Our Asian Clark Kent.

Yeah, he was, it was, yeah.

Racist today.

Oh, I was almost gonna say he was a ninja, but I, I didn't wanna, you know, he was in those anyways. So, um, he could do Chinese.

I'll have you know. Um, Samurai.

Samurai.

Yeah.

Um, um, but he was talking about when, when another guy was talking about a constraint and he was talking about the trade-off of, okay, so you, you know, you could spend $6,000 a month. You don't want to spend, you know, basically $100 grand to replace the person. What I'm trying to figure out is, I think I've answered my own question. I won't keep going here. Um, it's, I've been working on the wrong problem, I think is what the situation is. And I'm trained in nature.

Let me simplify this for you. Outbound team goes out, inbound team becomes the one guy. You need to hire a marketer person who actually knows what they're doing. Probably pay more than you expect, but then that person will be worth it. Your entire business is sales and marketing, so you should have the core elements of the business in-house. Okay, great.

Excellent.

If you need help with the sales process, we can help.

Excellent.

You bet.

Thank you.

Um, so my name is Evan. I sell duct cleaning supply to duct cleaners. Um, this year we will do $1.2 million in revenue, and I think I'd like to be around $3.5 million.

Okay.

Um, and I think what is stopping me is just being clueless.

Okay, cool. So let's, let's give you clues. So let's do one more. How do you get customers now?

Uh, strictly organic.

Can you take more customers than you have? Yes. Okay. So you don't do anything. That's why. All right. So, um, no, I mean like it's word of mouth. There's no like demand gen that's happening. All right. I've got, I've got good news and bad news. The good news is that your business probably, you probably are good at what you do because you've been relying solely on word of mouth. So that's the good news. The bad news is that you're going to have a steep learning curve for what you have to do next. And so you basically have to pick, do you want to do outbound as your way of getting customers, which could either be door knocking, could be emailing, could be cold calling. But you gotta be Instagram DMing. It could be anything but outbound. You could do, uh, paid ads to get customers. Um, you can have affiliates. So you do those things to get affiliates, or you can post content. Those are your options. Which of these do you feel like you are best equipped to do?

Um, probably paid ads, but one of the things I was thinking like, is creating a higher value per customer a good option instead of trying to get more customers?

Okay.

Um, I don't know which route to go, I guess.

So you would want to double how much customers are worth?

Um, I guess utilize my existing customer base with more consumables so there's more repeat orders. So like they're ordering more.

So Duck Cleaners go clean ducks?

Yeah.

Correct. And you sell them?

We sell them the cleaning supplies.

Okay.

Um, which is really high profits. Um, and then we started selling some consumables, but they're low profits. Like, you know, they might buy 500 a year, but it's only like $6 a unit or something.

Uh-huh.

So there's not too much money in that yet. So, okay. Um, I guess the, but are they buying regularly from you?

Just like how many customers per month are new customers versus repeat customers?

Um, we average 80 new customers a month.

Okay.

Um, so you do not have a lot of repeat business.

No.

How?

Unfortunately, but fortunately, the equipment I sell is really good, so it doesn't break down frequently.

But on the consumable side, what percent are all those repeat customers?

Consumables, yeah, those would all be repeat customers. There's just like, even though the margins are well, there's just like, you can only make so much selling a $6 product. So I don't know if there's a way. I don't know, maybe through selling them education to maybe that be something.

No, I mean, fundamentally you have a, you have a normal business. Like there's a zillion businesses that work this way. Auto dealerships work this way. Large equipment, you know, works this way. Like ink and printers work this way. You sell, like you have 3, you basically have 3 wheels of revenue in this business. You've got, you sell the machines, you sell the stuff that the machines use, and you sell the service around the machines. That's the three-pronged approach. And so your ability to extend the customer LTV is going to be around the second two, not where— I mean, most people will even like the more sophisticated business will sell these at cost or at a loss because all their margin is on the consumables and on the service. Now you can sell bigger customers so that those $6 things times 10,000 of those starts to add up, or you can sell more on the front end. But either way, the core focus of your business, like if I had a two-step approach for you, Core focus number one is we have to know that we're retaining 90, 95% of those people on an annual basis on all the consumables. So every year I should know that 95% of those people are, they have to buy it from somewhere and they should all buy it from me. And so what ends up happening is your business starts, that, that becomes like the annuity of the business. So you acquire these new customers to sell machines for whatever, and then this base of servicing consumables just continues to rise over time. And that's super profitable. That's the game. Now you said that you wanted to grow the business by making them more valuable. I think you will have a hard time making the individual more valuable. I think it would be easier for you to sell a higher tier customer. So somebody who cleans more ducks, uh, so that they can buy in higher volume or buy for entire fleets, whatever. That would be the path, but it'll be a different sales motion than you currently do. And so you have, like, you are at a crossroads where, like, if you want to have significant growth, you'll either have to have a new acquisition— well, you'll have to have a new acquisition system basically either way, because you're either going to have a new acquisition system for a new type of customer or a new acquisition system for your existing customer. If I had my druthers, I'd probably rather you start with new acquisition system, existing customer, because you already know that flow. Once you have that, then I'd be willing to go upmarket.

Gotcha. So would a good first step be to reach out to our existing customer bases with like Explaining to them we have consumables, like we don't do any outbound to existing customers.

That would be an excellent idea.

Gotcha.

We have things available for purchase. You should purchase them from us. That makes sense. And so realistically, you should probably get them on a cadence or subscription with the sale of the initial product. So I don't know what the offers that you use, it's probably beyond the scope of right now, but like that's, that's where a lot of the alpha is right there is like, what kind of maintenance programs are we selling up front? What kind of incentives are we getting them for subscriptions up front? Like the entire business and Here again, I have more good news for you is that you've been making the money that you are with none of the actual pieces that make your business make money, make money, which is great news. And so we just have to put these other two wheels in place and then develop the motions around those. And like the profitability of the business will go up a lot, like a lot, dude. Like you've got, you've got the front, you've got the hard part of a profitable business without the profitable part of the profitable business. So we just have to bridge that moat. That's it.

Yeah, that makes sense. Yeah, I think that's my only question.

Okay, great. So sales motion change, offer change, and then there's going to be a re-engagement on the back end. Those are the 3 things for like today.

All right, cool.

Thank you. Rock and roll. Appreciate you.