Recruiting, Ops, and Churn: Real Business Fixes in Real Time | Ep 884

If I said, hey, no one wants to come to Vegas who already has like a huge amount of, you know, marketing knowledge because anyone who's really good at marketing can make more than— well, there's plenty of marketers who can make $1 million a year in revenue and take home $200,000, you know, $250,000 with all the headache. It's like, well, I could pay you double that and you can just deal with high-level business owners all day. And for some people, it's like, that's a pretty good deal.

Hey Alex, my name is Mark. We help live poker players win more money who are already winning. We do about $2 million, we'll do $2 million this year and we'd like to be at $10 million. The problem is we have two front-end offers and both are converting like crazy to the back-end, but we have one that's $7.5k for 28 days and one that is $2.8k for 7 days. We are demand constrained on the The high one, the $7.5K.

Do you upsell from the first to the second?

We, we're not really converting because they overlap too much.

Okay. So is it just a downsell?

It's a downsell for players who aren't playing full-time or guys who are more weekend warriors as opposed to—

What percentage is each?

We do $12 a month of the $7.5K and we do $16 to $32 a month of the $2.8K.

It's a big range on the other one. Okay. So what's revenue split there? So 12 times 8, so call it 100 on the high ticket side. And then the other one is 50 to 70 on the— okay. So less on the other. Okay. Keep going.

So the question is, how do we differentiate these? Or do we just switch to a single offer that's more of an ascension and make the one that's maybe 3 days or 5 days and less expensive, and then we can upsell to the 28-day? Or do we just say, screw it, let's just do the 28-day and drop the thing on the front end?

You said you're supply constrained on the 7-day thing?

If we start doing a bunch of those, we need to hire more coaches.

Okay. And how are you not supply constrained on the other one? Is it less coaches for the more expensive thing?

Gethin, my business partner in the front row, he does, uh—

Is it less, fewer coaches for the— on the lower thing? On the— no, on the high ticket. So won't you very quickly be constrained on the top thing?

Full-time players in the market.

Okay. Day and night. Okay. 3 times a day. Got it. But okay. So, so the problem though is that you need another person to sell more people into the front end thing. Well, cause they're running similar pages too, right? So if I'm posting, both can, yeah, I'll get down up there the same. I think you might have an ops issue. So right now if I said, could you sell more people if you had unlimited capacity? Like, could you, could you sell more if you had unlimited capacity? We could sell more.

More of the 7-day thing because they go 4 times a month. So it requires less on our part.

I feel like reskinning the ops on that. But when I have 2 products that are really similar, probably the higher guys. And you sell them direct into that, right?

Yeah.

Direct from warm inbound.

Whatever you're doing. Oh, from warm inbound. Yeah. Oh God, it hurt. Okay. Well, if you cut off the low thing, you have no real scalable demand gen right now. It's just you make content and then that just You get what you get and then you sell those people, right?

And we're kind of capped on, on the warm is growing, but it's slow and we wanted to start dipping our toes into paid.

Yeah. I mean, that's going to be the thing that's going to unlock as much as I want to say, hey, cut this one or that one. If you cut either of them right now, you'll just lose money because you don't have an ability to get customers kind of on demand. If I were to fix this, I would think let's fix ops first. Number one, like how can we reconfigure the delivery of the offer so that you can get 3, 5x the operational capacity for you? And then all of a sudden that'll unlock it so that then when we then go run paid ads, we can then actually bring enough people in. And then at that point we could say, you know what, now we have enough of the $7,500s, which you might as well charge. Well, I'll just say that you have enough of the $7,500s that then you can make the call and say, you know what, we have this much capacity overall. If I just cut this, I can then triple this one. And then you just do that. Do you like the pricing on those two or you were hinting at raising the Honestly, this is where I would be like, we need to do our research behind the scenes so we could, because we do price analysis all the time and sometimes we get lucky. Like we had a business that we acquired that we did a ton of pricing research and we basically said, you are actually so underpriced that we will double the price. And it took me 9 calls to the founder to get him to like sack up. Ladies, I apologize. Grab his gonads. Those are unisex. Anyways, grab those and then make the move. And not only did we double the price, conversion rate went up. Because it was so cheap, people didn't believe it. And so the thing is, is that sometimes we sell out of our own pocket, but you actually sell to gamblers.

Correct. Yes.

So you might, you might actually find yourself in a situation where the more it is, the more they'll believe it, which is called a Veblen good. But we would do a pricing kind of like deep dive on that before I would make a pricing rec for that specific avatar. But yeah, that's the TL;DR. I'd fix ops first, then I'd turn paid on. And then at that point we'll make the split call. Cool. Thank you.

Appreciate it.

Yeah. Hey Alex, my name is Jared and we sell body count contouring and body transformation to patients. I heard—

I like— that sounded so different from the onset. Sorry, body what? Contouring. Okay. Body contouring.

So it's our primary service is like melting fat.

It's like we sell body counts. I was like, that's— this does, this does benefit body counts if you're aiming for one leads to the other.

It's a, yeah, yeah, yeah. It's a daisy chain.

Got it. Yeah, yeah.

Heard.

So currently you get the content to increase your count.

Okay. 1.2 in, uh, revenue. Yeah. Um, with our, we're on track to 2 this year.

In-person med spa.

In-person med spa.

And what's stopping me, and my question is to start over from the top, is we now sell a $6,000 package for a year. Uh-huh. To med spas to help them scale using our pillars.

Okay. All of our— so 2 businesses.

2 businesses. Heard. And right now trying to figure out which to do.

So first one, right? First one, and then this is this one.

Keep going. So business one, we did start another location 2 years ago.

So 3. Yeah. Heard. Okay.

But the nice thing is we only do, we only did one service for like 2 and a half years.

Which I do like, I do love the Raising Cane's of just like we make chicken tenders, toast, coleslaw, and yeah.

And then the cash is so good in the consulting that right now I'm like, do I set up the exit? Move to consulting.

What do you wanna, so do you wanna sell the med spas?

Not for nothing. Well, no, I mean, yeah.

Yeah. Yeah. But like, what do you want to have happen? I would like to be coaching.

It lights me up.

So you like doing that better.

You realize there will be no exit there. So within the coaching, this is why they've stayed together. Yeah. Is we get all these clients. Uh-huh. And then we're able to pick the key ones for the spa group exit of like a 50 spa group, 100 spa group exit. Okay. So I've got one that we—

you wanna do a rollup of med spas? Okay. I think that's smart.

But they kind of go together, it feels like.

Okay. Heard. How outsourced? This is such a loaded question because everyone says they're totally outsourced. How many times have you gone to the med spa in the last 6 months?

Uh, some weeks zero, some weeks once or twice.

Okay. I see where you're going. I think putting a roll-up together, very easy to say, harder to do in practice. And then also the deal structure around that can be like just a couple of ways of restructuring can make it A, more tax efficient for you and also you capture more upside in a way that when you pitch it to them, makes it seem like they're getting a better deal. So there's nuance to that, but beyond this scope, I do think that I want to get you out of the day-to-day of those because that's not the opportunity at all. Because if you can do the roll-up, basically nothing else matters. So I'd be willing to eat margin on the two to put somebody who's intelligent in IQ per square foot so that I use my, uh, my cell phone talk. Have you guys heard my cell phone talk? Here, here's the cell phone talk. So you get intelligent person and say, hey, intelligent person, I'm going to pay you, you know, $100 grand a year and 5% or 10% of the profit of the business invested over 4 years. And if we sell, you'll get 10% of just the contribution of these in EBITDA to the overall. Cool. All right. But here's the trade. This doesn't ring. Let's role play it. Customer comes in, they're super upset because they had some weird reaction to contouring. What do you do? Any answer that is not call me is the right answer. Okay. You have a whole full stack and then the ceiling starts leaking in the middle of the day. What do you do? Anything that's not call me is the right answer. And so, and so I, I do this to make the point when you have that conversation, because you're like, I'm giving you this ownership position. I'm going to put your picture on the wall. We're going to call it your facility, not mine, so that you own these and then you can go and hunt. Cool. And if you have questions with the deal stuff, we're happy to help.

Sweet. Thank you. Hey Alex, my name is Josh.

We sell to athletes and fitness enthusiasts like yourself with mobility and injury prevention. So we help them overcome muscle tightness, joint stiffness, recurring injuries. We're at $33 million in revenue. We want to be at $100. Um, we've been scaling very fast. Now we're at a point where our CAC to LTV has like squashed down to 2.1. So we don't have the breathing room.

Is this coaching or info? Sorry, coaching info or products? Info. Okay, got it.

Yeah, coaching. Low ticket to high ticket ascension. Okay. Got it. Yeah. So our CAC to LTV is now 2 to 1. We just don't have the cushion to like continue scaling the sales team. 2 months means to double the sales team. We just need more cushion.

Yeah. So what I was referencing earlier about LTV to CAC at each of those kind of intervals of manual labor, that resonate with you a little bit? Yes. Yeah. So you need to increase LTV. So are you all direct response? Is it all paid or do you have organic?

We have a big organic following, but it's mainly like 70% of the clients are coming from paid. Mm-hmm. We run a lot of paid.

Yeah. So I've got good news and bad news. If right now you're at 2 to 1, I would imagine the profit margins are compressing, right? So sales are high, but yeah, margins are lower. Yeah. The issue is that, believe it or not, if we were to pull out the 30% that's coming from organic, the business would probably not be profitable.

Yeah, it might be less than 20. I'd have to check exactly what that is.

So what are your margins? 20%. Right. 20% is coming from the free traffic and then the other 80%. You know what I'm saying? Yeah. Yeah.

So a part of it as well, like our close percentage as a company is 20%. The reason for that is like we've gone from 4 sales reps to 40 sales reps in like 3 months. So a lot of our sales reps are still in ramp. So like it should be like 30, 35%, which would give us a bit of breathing room, but it's still, yeah, like anything else we can do to liquidate more on the front end.

And I think this is actually pure ops. So it's, it's going to be the sales motion and dialing that in and probably adding some elements of education prior to the close in addition to what you're currently doing to make it easier for the sales guys to do their job with less ramp. And then getting, I mean, I'm sure you're proficient at doing sales cuz you're in fitness and obviously have a, you know, a hardcore sales, well, I'm guessing if it's 40 phone sales guys selling info, like it's pretty hardcore in terms of the, the, the selling perspective. Who runs the sales team? Uh, so we've got 40 reps.

There's then 4 pod leaders, managers, and then there's 1, uh, director of sales.

Got it. Who developed the sales training?

Myself, like it's kind of come from myself. It's evolved a little bit over time from our like top sales reps, but it's mainly me and the sales director.

To solve this business, it's going to be a recruiting and training thing.

Like in terms of sales reps, better reps. Yeah.

So like if we look at the whole business, it's like we have to solve that. Now, could we also probably look at the ad side? Like are there things on the creative that might be able to give you a lift? Probably. Conversion rate throughout the funnel. Sure. Any incremental return is going to be positive. But I would bet right now that it's going to be, how do we get the best guys to 40, 45, and then have the, you know, the median be, you know, 30, 35. Yeah.

Our best guys are close to 40. Okay.

But right now, were you saying the team average is? Team is 20.

Yeah. Cause there's so many still ramping.

So part of it. Yeah. So recruiting and training is going to be the business that you're in from a selling perspective. And so you have a sale, you have a sales business fundamentally, you have a sales business with a direct response media on the front end. And so. There's so much that goes into sales training. I just rewrote the ACQ Sales Closer Handbook and all of our onboarding process. There's so much like nuance that goes into it, and a lot of it is just, there's so much wasted effort that happens and untraining that occurs on the job when it's done the wrong way that most sales, or like I would say 95% of sales organizations, their primary method for basically scaling the sales team is hire as many people as possible, let the bad guys die out, which is scaling through selection rather than scaling through training. And when you scale through training, you can scale with higher margins cuz you don't have to pay the mercenaries their king's ransom because you can take anybody off the street and they can immediately sell. And so that's where your alpha is gonna come in compared to people, uh, like in your space who have to just take the mercenaries who'll jump from offer to offer to offer because you can pay them less and you'll be able to ramp them higher and you'll be able to get more of them. Mm-hmm. And so fundamentally, like that is the motion that's going to be the competitive advantage of the business outside of the obvious, like you need to still be able to run really good ads.

Yeah. So the 80/20 for us then is like, for to increase LTV is like better sales team.

Yes. You're not going to increase LTV. You're going to increase dollars per lead.

Yeah. Okay. Got it. And what is a healthy CAC to LTV for our business model at this scale?

I mean, honestly, you want it to be bigger.

Yeah. No, yeah. I definitely want it to be bigger, but someone said yesterday 10 to 1, and I don't see how that we could do that.

I think that you could do 5 to 1 as a good target, and that would probably get like Getting the sales function where it should be would get you to 3.5, maybe 4-ish. And then I would say the other kind of 20, 25% lift that would happen there, it's going to happen front-end conversion rate optimization stuff, media. And then we'd have to look at what's the renewal rate on the back end, how many people renew long-term. Because like the two most profitable pieces of the business for you are the customers that are coming in for free, which is basically the entirety of your margin right now. And then customers that renew that you don't have to pay CAC for, right? Those are the things that are dropping to the bottom line. Everything in the middle is literally just to facilitate these two things. Yeah, exactly. Right. And so we just need to like, how do we double down on these two? Because these are the the most profitable things and then lift this so that we can unlock more to get to 100. Mm-hmm. Yep. Okay. But if you get to 4 or 5, then you can get to 100. So, I mean, although this, like, this will be ops heavy, this will be work, but you also get paid 70 extra million a year, so. Yeah. Okay. All right, cool. Thank you, man. Yeah. So my name's Chandler.

I sell cowboy hats and custom hats. Sweet. Uh, we do around $2 million in revenue right now. Awesome. I'd like to be at $5 million. Okay. What's stopping me is, so everything is mostly through social media. Cool. We've got about 780,000 organic followers. Cool. We, are doing some paid ads, getting a 12 to 18 ROAS on the ads. Right. And the issue is, is I've got this big red shiny button on my desk and at any moment I can just slam it and just double the content. Like you say, I can double the paid ads. Sure. But I can't make the hats. Oh, okay.

And it takes—

just a black constraint.

Yeah. But it takes years to take somebody and make them into a master hat maker. And the issue is, is as much as we could say it's a recruiting problem. Sure. Hat making is not like an inherent skill. So it's, you, it's, you could bring in a person that does artistry. You could bring in a person that does anything like that. And all of a sudden, if they don't have the vision for it, they can't shape a hat. And so you need the hat making combined with the customer service in order to be able to talk to the clients. So what's the price of the hat right now? Anywhere from $800 to $1,200.

Okay. Got it. So there's a super high-end kind of like artisanal, for sure. You know, hats are all custom, et cetera.

And we do like end-to-end, like full virtual. So every single person normally when they buy a hat goes into a hat store. And the issue is, is that hat stores are all locally based and it's a dying trade. And so what I did is I harnessed the power of the social media and then we do all the video calls and everything virtually with people. So people feel like they're watching the video that they love on social media, but it's made just for them.

Yeah. So it's totally recruiting issue. Totally. Yeah. And I mean, fundamentally, if you're like, I have unlimited demand for this stuff virtually, right? You can just slam the button and just get double the sales, but you can't deliver on it. It's a, also kind of like the sales thing, different in terms of delivery, but it's going to be recruiting and training issue. The thing that I think is underutilized right now is the fact that it's a dying trade. Mm-hmm. That to me is where the really exciting alpha is. Because if you tell me, okay, there's all these people who are dying on the vine who can barely make ends meet, and then I'm over here printing money with the exact same skillset they have. I'll bet you, you could probably pay them better if they're making $1,000 hats. But I'm in Kentucky.

No one wants to be in Kentucky besides us.

No one wants to be in Kentucky for what you pay them now. That's true. So compensation is, you can be overcompensated or you can be undercompensated. So if you are supply constrained and you are making money hand over fist, you are underpricing your talent. Okay. So it's like, how much more would I need to pay somebody in order to get them to be, one, willing to move to Kentucky and two, be willing to go through the training for it. If I can get them to do that, do I still have a good margin? If so, great. And it's like, okay, well if I paid them 30% more, we'd be good to go. Okay, well what does 30% look like in terms of if we change nothing about price? What does 30% look like if we pass through the price to the customer? Does it change anything about our acquisition? Mm-hmm. If so, then jack the price, jack the talent, and then you're good to go. Real quick, guys, I have a special, special gift for you for being loyal listeners of the podcast. Layla and I spent probably an entire quarter putting together our scaling roadmap. It's breaking scaling into 10 stages and across all 8 functions of the business. So you've got marketing, you've got sales, you've got product, you got customer success, you've got IT, you've got recruiting, you got HR, you got finance. And we show the problems that emerge at every level of scale and how to graduate to the next level. It's all free and you can get it personalized to you. So it's about 30-ish pages for each the stages, once you answer the questions, it will tell you exactly where you're at and what you need to do to grow. It's about 14 hours of stuff, but it's narrowed down so that you only have to watch the part that's relevant to you, which will probably be about 90 minutes. And so if that's at all interesting, you can go to acquisition.com/roadmap. Roadmap. Roadmap.

How would you jack the talent? Like, just, I mean, because I don't feel like recruiters can find hat makers. Maybe I'm wrong. I don't know.

I think they can totally find it. You think so? I mean, I would just Google hat maker. And then I would call all the business owners. I'm just being like, this is how I would do it. Yeah. I'm just like, they're business owners. And so if they have the opportunity to, because the thing is they're probably not making anything. Yeah. And so many of them are artists. They don't have business sense. And so if they can make the money they want to make and do the thing they want to do, that's a dream life. It's a pretty good offer.

But then they have to work for me and then the ego thing gets in the way.

Yeah. But not for all of them. You need what, 3 more, 5 more, 10 more?

I would say like 2 to 3 more to get to 5 to 7.

I'll make a point. This is important. So you guys met my team today. Mm-hmm. Does it now make sense that they don't make $100,000 a year? Yes. Like the people that you talk to make between, you know, $200,000, well, $200,000, no, probably higher than that. So probably $300,000-ish on the low end, all the way to $750,000+. Mm-hmm. Right. The people that you spoke with. And so if I said, hey, no one wants to come to Vegas who already has like a huge amount of, you know, marketing knowledge, 'cause anyone who's really good at marketing, can make more than that. Well, there's plenty of marketers who can make $1 million a year in revenue and take home $200,000, $250,000 with all the headache. It's like, well, I could pay you double that and you can just deal with high-level business owners all day. And for some people it's like, that's a pretty good deal. Okay. This would be horrible if I was just trying to be like, how do I pay kind of as little as I can and then be like surprised that no one wants to come here, but you have the margin and you have the pricing power. Yeah. So use it.

So one last question. Yeah. Can I hit the big red button and then that way, and then— No, supply first. And supply first. Get to people first.

Well, you have margin, right? Like 40 to 45%. Yeah, you got margin. Okay. Mm-hmm.

Because I'm just wondering if I hit the big red button, then I have more money and then I can afford to—

Well, how much capacity do you have right now? Are you fully like, are you fully tapped out?

Right now, currently when someone buys a hat from us, the soonest they'll be getting their hat is like October, November. So you would just be pushing out delivery when you do that. I could push out delivery technically. The industry does delivery at 6 months to a year for a custom hat. We're still technically 2 months under. I know it's fucking crazy.

I hate using latency, but I do think that there's no difference between 6 and 8 months. Okay. It's just forever. Okay. Well, it is.

And that's like at about the 3 to 4 month, like you get, you have to essentially just slowly grab everyone off the ledge. Yeah.

Yeah. No, I think, I mean, if you wanna slam your bit, Red Bud, just so you can just jam some cash in, I, that, that doesn't really bug me. Pushing from 6 to 8, it's gonna change absolutely nothing. About the conversion process. Okay. Recruiting problem.

Thanks. Rock and roll. My name's Max.

Nice to meet you, Max.

So I sell cannabis, hemp dispensaries across the country. Cool. Do $22 million a year. Grower? Goal is— Are you a grower? No, distributor. A distributor. Got it. Okay. So we buy it from California farms, then distribute it out to— Okay. Goal's $50 million. And what's holding me back right now is regulatory changes. Yeah. In the hemp industry. Uh-huh. So that fear of, you know, something changing, a few states are changing right now that are key markets and, uh, it's kind of holding us back from reinvesting and expanding the team.

So basically the uncertainty that the market is going to be there is what's holding you back from getting more locations on board to distribute to?

Pretty much. I mean, from basically expanding the sales team and what's the alternative? I guess kind of sit stagnant and Really? Mm-hmm.

So what are you afraid of?

I, I, I guess what I was more wondering is like, should we change product categories? 'Cause there is other products like in the cannabis space that we could distribute to our current customer base. Yeah. Rather than just flour. Like that's been our full focus right now. Yeah.

I would probably think about it like this, which is regulatory is, is like the number one concern in your space. Also sometimes in healthcare as well. So that's kind of sometimes an issue because they're heavily regulated. That being said, most regulation, everyone's fear is that it's going to end tomorrow. But typically, one, you'll have heads up because bills are, you know, on the line. On top of that, they have to get voted for. Once they get voted for, there's going to be a time they're effective. By the time they're effective, they usually have a phase-in because they typically don't want to disrupt business. And so you usually have way more time than you think you do. And so I kind of operate from the, like, we will operate this way until we know, because otherwise you just get stuck in this uncertainty of just like, what do I do with my life? And you can stay there forever. Ray Dalio has been saying, and I love, I love Ray Dalio to be clear, but like Ray Dalio has been saying that like the world's going to end for like 14 years. And so, and he's like almost there, right? But he's like almost right. But he's been almost right for like 14 years. And when it finally happens, he'll be like, I told you, right? And so the thing is, is that if you had like held gold this whole time, you would've missed out on one of the best, you know, growth periods in US history in terms of, you know, stock market appreciation. And so I say all this to say like capitalize on the opportunity while it's there. When it's not there, or like when you have a heads up that it's not there, then you can very aggressively start selling the other products into your distribution base. And I'm sure I would imagine that getting the other products not that difficult and training the guys to sell is probably also not gonna be that difficult. So I would just go business as usual, still aggressively expand. And then if that happens, you'll, you'll make the pivot. Trying to guess the future is tough. Yeah. And so I would rather just deal with the, you know, the information we have now. And when that information changes, we'll change our behavior.

Yeah. Thank you. Mine is Peter. Uh, we sell sports memorabilia, autographed sports memorabilia by athletes in the UK. Sweet. Uh, we currently do 3 million. I would like to be at 6.5 in a couple of years.

Very precise. Okay. Yeah. I'm English.

Yeah. I've been stuck at 3 million for the last couple of years. The swamp, as you say. I think I need an A-player. Also, I'm not sure. I think I've been focused on the wrong things as well. So yeah, just want some advice on that and what else it could be.

What's limiting your ability to grow?

Leads. I'd say leads and then converting leads.

Leads as in getting people to buy the products or getting the products?

Getting people onto the site and then our conversion rate's 1%. So I think that's quite low for e-commerce. Yeah. Yes.

Or the targeting is off from your traffic. Could be one or the other. Okay. Because I would say like, if anything, some of you guys are probably like obsessing about your CRO, but the issue is actually the list. It's the traffic that's getting sent to the site. The easiest way to improve your conversion is get better people. I mean, being super real, like that's, it's one of the most underlooked way because the whole time you're banging your head against the wall and it's like, yeah, well, no shit. These people are in Africa. They're not buying this, right? To your issue though, do you know how to buy media really well or what's your core skill set?

I don't know. I need to, I need to figure that out. Probably just managing the whole thing.

Okay. Well, the core elements of the business are being able to source the products. Okay. Are you good at that?

Yeah. It's like seeing a piece of memorabilia being like, right, I could buy that for 200, sell it for 2,000.

So. I'd say buying. So that's how you source, you just buy, sell. Okay. So you're a middleman. Got it. So you're fine at finding the stuff that you know is going to sell at a higher price point. You're good there. Okay. So we don't have to worry about that. I mean, it sounds like, I mean, there's not much else into the business. If you already have supply side down for e-commerce, it's just media buying for the most part and then building the brand. But for you, you do get some kind of brand halo because of the nature of the memorability that you have, which is kind of unique to your business. But the fact that you didn't immediately say, yeah, I'm really good at e-commerce and really good at, you know, media buying, I'm going to guess that's what you're missing. And that's probably the person that you need. And the thing is, is you could go from 3 to 6 in like 60 days. If you have the right person, you go from 3 to 10, 12. It's e-commerce, like it scales very easily. That's why a lot of people like it. The issue that then comes up is cash flow, which we can deal with later. But like, if, as long as you have, so you're at 3-ish million, what are margins? 400,000 on 3 million. Okay. So like 12-ish percent somewhere in there. This is why it's the swamp. So you either have to learn media buying yourself or bring in somebody who's a star or stud, and you might have to give up a few points of equity to get somebody who's really good without giving the entire margin away. Because like you've got cash and you've got stock, you've got different levers that you can use to try and compensate somebody. It's just, it's like the really good media buyers make multiple hundreds of thousands of dollars a year. And so most people who own e-commerce businesses are either very product brand focused or they're media, hardcore media buyers. That's like, I would say those are kind of the two genres of e-commerce owners that I encounter on a regular basis. You kind of sit in the middle of like kind of neither. And I don't say that as a slight, I'm just, just so you know where your deficiencies are. Yeah. The nice thing is that your eye for product, you have a really good sense of the market where you can do the arbitrage on the $200 to $2,000, which is great. But I'm going to guess this is the skillset that you need right now, which is getting that going. Once you have the media person, Then your skill that you'll have to learn is how do I brand this thing so that I can long-term become kind of like a household name of sports memorabilia. But for now, let's get more sales, drive revenue up, and then brand would be the next thing. Thank you.

Cheers. My name's Nick. We sell sales coaching and lead gen to financial advisors. We're at $6.6 million. We'd like to be at $20 plus.

Outbound, paid ads, events. How do you sell? Paid ads. Okay. Yeah. Straight to VSL to phone team. Correct. Cool. Yep. Okay. Yeah.

Biggest thing is churn as with pretty much all agencies. We've basically transitioned from lead gen company to sales coaching company because we know that advisors can't close. No offense to any advisors in here. We're doing a lot of sales coaching now. So we have like the big head long tail where we can sell the lead gen on the backend. Yeah. The main question is, have you seen other agencies successfully pivot from lead gen to sales coaching or, you know, in like very non-sales or industries where founders or business owners are sales deficient, have you seen companies successfully train their clients on sales? Yeah, sure. So like at Gym Launch, how did you guys successfully do that across thousands of gyms?

We had something called Boiler Room. We trained their trainers and front desk people every morning and drilled them, role-played, and separate them in the groups the same way we would our own teams, but we just did it every morning for them and it was just an add-on. Just group, group roleplay basically. Just like you'd have a sales manager meeting where you'd roleplay whatever particular part of the script they were all struggling with. We break sales training from the team side, not on the one-on-one side, into 5 parts. We've got intro, we've got disco, we've got offer, and then we've got objections and looping. And then 5th day is basically whatever is kind of the hot topic of what's the thing that we think is going to benefit the team the most. And so that's kind of how we rotate through. We have to keep each part of the script crisp, otherwise they'll fuck up something. And so that keeps the sword sharp. And that's what we did, you know, across the team. We still, we do that for our teams too. Basically, you need to provide more value or you need to lower the price. And so if you want to tackle churn, it has to be like, there are for sure businesses that work in the space that you're at. I think Big Head Long Tail is a great model, like charge the upfront and then just make the continuity much, much smaller. So it's a no-brainer. Like they'll almost pay that just to be kind of in the network. It's like, I try to answer the question so that it affects as many people as possible in this room. But the problem with information and kind of quote, quote coaching or education type businesses is that people try to make continuity out of the front end. Value that you're providing. Yeah. And then the value drops once you have the skill. And so you have to separate out the consumables from the one-time things. The one-time things also have significantly more value than the consumables do. Now, sometimes they don't have the money to pay for the one-time thing because they don't have the skill the one-time thing would give them. Right. That's kind of the issue. So, um, in order to separate it, it's like you just have to think, what are the things that they get on an ongoing basis? And if we only sold that, what would the price point be? Likely significantly lower. And if we got them that skill, it would be significantly more. But once they have the skill, assume they have the skill on the ongoing basis, what would they still pay for? Now you have the lead gen thing.

How to sell using our process, they stay. Okay. So the biggest thing is just making sure they actually—

they just don't know how to do coaching.

So it's, so it's like it's activation as well. So like getting them to come in and actually engage. Yeah.

Because most advisors— is it all remote?

It's all remote and they don't, they also don't like sales, like the word sales, like they like cringe inside when they hear it. So we've literally like banned the word sales. Like we, we just say consulting. We don't call them sales calls. We call them consults. So like, you know, like that.

So it sounds like you just have to get better at training them. Yeah. Yeah.

So, so what did your team structure look like as well? So I was, I was curious, like, is it possible at scale to do that? And then what sort of team did you have on the sales training or coaching side?

It is possible. But the answer to my question isn't the an— so the answer to your question isn't the answer to your question. Me answering with what our team structure looked like does, will not help you because we do different business. And so for us, the fundamental arbitrage that existed by and large was kind of two main things. So one was the network and the community. That was a big component of it. You know, being a gym owner is very lonely. It sucks. The other component of it was lead generation, but not in the way that most agencies kind of do it. We were not an agency. So the one skill that I taught gym owners how to do was how to run ads in a local market. And then the thing they would need on a regular basis was the creative. And so I licensed the creative every single month because they needed that every month, but they already had the skill. So I didn't have to have 100 fucking account reps to deal with it because they knew how to run their own ads. And running ads in a local market is very easy. Drop a pin, female, go, you know what I mean? Like as long as the creative's good and they were running it to our pages that we already tested. And so all we had to do is feed the black box with the creative. And then after that, they just run our process. Got it. Your issue though is that If someone gets activated, they stick for sure. For sure. Well then all of the, all of the effort we have is how do we get them activated? Like better, faster, which is gonna be a function of two things. One is gonna be, are there some avatars that are better than others? Right? So we only sell those avatars and we split that into three buckets. You've got demographics, what do they look like? Right? You've got the quantifiables, which is like what size business do they have? Whatever. Those two at least get you on a head start. In terms of segmenting the traffic. So you can be like, this is who the avatar is. These ones have a significantly higher likelihood of converting. And what'll happen when you do that is your CAC will go up, but then your stick problem will get fixed. Okay. So like, for example, if I sold everybody who identified as a fitness person, then Gym Launch would never have been able to exist because I would've had too many shitty customers who are personal trainers who've got 10 clients, whatever, and they can never pay. And it doesn't matter what I do. And so for me to deploy the resources required to actually get them up to snuff, I have to have somebody who at their onset can pay more so that I can actually help them. Okay. Because below a certain extent, it just needs to be DIY, which is a different business, not the business I wanted to be in. So there's probably some advisors that are better that you need to basically scan out and say, all these people we're not gonna service 'cause they have a low likelihood of actually working. And maybe you need to adjust price to only accommodate those people in that newer avatar that's better. So this is predominantly an avatar issue. And then obviously the ops on the backend in terms of activation is what do, oh yeah, that's the third bucket, the behaviors. So what do the people who, uh, have the right demographics and the right quantifiables, what behaviors did they do that caused them to activate and stick? And what did the other people who look like them not do? And then that becomes the activation process we reverse engineer. Makes sense.

Quick last question. How did you optimize for, for time to value? At DreamLaunch and how can we potentially do something similar? Because for us, deal cycles are Yeah, we email their list.

They make a sale in the first 7 days. Okay. So just reactivation. Okay, sweet. Appreciate you. My name's Roddy.

I'm an orthopedic surgeon with emphasis in, uh, orthobiologics and regenerative medicine. We do about $2.1 million and that was with a shift in the last year from more of an insurance-based practice to more of cash-based services. Awesome. Congrats. So obviously we want to continue to grow that. We think that we could get to $10 million. Ed encouraged me to mention that a lot of that cash-based stuff has come on credibility, tailwind of some fortunate exposure on the Joe Rogan podcast. Oh, cool. But the question is, we would like to, we think our problem is top of the funnel because our close rate's very, very high, like 80%. Okay. We need a way to bring more people to us that know and understand what we do and are looking for this. Uh-huh. The challenge is the marketing around it, and you mentioned earlier with healthcare, is that we're not really allowed to say some of the things in that way because of the, limits with the FDA and the FTC. So how would you leverage some of these things and attack this from a marketing standpoint?

Well, you have the Rogan Podcast. Do you get everyone to listen to that? No. That might be a pretty good one. Who's everyone? Well, the people that you want to buy your stuff. If I had 60 seconds to answer the question of like, how do I fix this business without any other context? I'd be like, okay, who are the highest likelihood candidates for the service that you sell? Let's put them into an audience. And then the thing that we're gonna give them or that we're gonna encourage them to listen to is a truncated version of the Rogan podcast. And they're gonna wanna listen to that anyways because it's probably a topic they would be interested in because it's Rogan. Plus if they are in the demographic, then they would wanna listen to it. If they listen to that podcast and then you just have follow-up to those people, it's like that podcast does the selling for you. So basically that would function as your video sales letter in the process of selling those customers.

Any problem with that you could see from leveraging that from, for example, somebody building their business off of something that developed as a result of their interaction with you.

So what you can do is you can, if you want to be clean about it, you just run it to the episode and then you just have to measure your return. I don't know if you did CTAs or anything like that, but if you don't truncate it at all and you just say like, here's the episode, let's drive traffic to it. And we just know the difference is that every single person's going to listen to Rogan. A very small slice of that are people who might be interested in your stuff. If you only had people who are interested in that stuff who listen to the podcast, what percentage of those people then take the next action? So that would be like, again, if I have 60 seconds, both hands tied behind my back with zero ability to do anything else, it'd be like, let's just get as many people who are in the target audience to watch that thing or listen to that podcast and then see what happens. That'd probably be like the first move. The second move would be like, okay, we'd have to do a deeper dive on, okay, what are the patients? Where are the kind of like centers of influence for them? Is it like, is this better as an affiliate play? Is this better as a content play? Is this better as a paid ads play? And then saying, okay, based on your skillset, We think this is the lowest risk opportunity that we can pursue to get new customers in the door. Because right now you could take more customers, right? Or patients, sorry. You could take more patients. Okay. And everyone's that comes to you is national, they fly in or is it local? Both. What's the majority? More local. Oh really? Okay. Well then, well, so let me say this. Yeah.

More local in general, but more from out of town that are Rogan specifically coming because of that. I would take that same idea.

but I would just drop a 50-mile radius pin on the map and I would just focus on local because if you know the guy that Rogan talked about who did this thing is 50 miles from you, you're like, the likelihood that you want to go do this thing is pretty high. And so that demographic, that's the lead magnet. And then the thing that's missing in your process is you have no one who does sales, right? That we do now. You do now. It's very common for healthcare to just have no sales whatsoever. And so you just need one person who's going to start working those leads. So they can start booking appointments kind of proactively. Hey, did you get a chance to watch the podcast? What was the most interesting part for you? Oh, are you struggling with something like this? Well, it sounds like it might be a good fit. Can I tell you about it? Great. Let's, uh, let's get you set up. The doc will get you all taken care of. That's my 60 seconds, hand ties behind my back way that I would solve it. But the thing is, you have this asset. I would like to leverage it in a clean way that doesn't, you know, uh, fuck up that relationship. And I think that would probably be okay if you push traffic to his asset. If we did a YouTube video and you ran ads to the YouTube video, I mean, you're promoting my show, so that's clean. Okay. Does that make sense? Yeah. Thank you.

Yeah, you bet. Michael Ivy, I, uh, managing partner at Eclipse Consulting. We're a boutique services firm based out of New York City and we provide data management, risk and regulatory change advisory services to highly regulated and data-intensive businesses. And, uh, historically most of our clients are financial services, um, particularly banking.

Okay.

We were heavily concentrated in banking, Credit Suisse, Silicon Valley Bank were some of our biggest clients. So when that sector went down, we had to kind of reinvent ourselves a little bit and focus more on asset management, insurance, private equity, relatively easy.

That's a wild change. I mean, that's a big change.

Well, the cool thing is data management, risk and regulatory stuff, it's the practice is kind of industry agnostic. You need some of the specialty in the industry. Okay. But it was a pretty seamless pivot for us, to be honest. That's amazing. We were just so, at one point supply constrained on the banking side and then demand disappeared. And so we chased, we went to where supply was. So anyway, so we'll, we'll do, uh, we, we were well over $30 million after 3 years. Awesome. With the banking crisis, we fell back down. We'll do around $15 million this year. Uh, want to get to $100 by 2029. I've almost invested too much time into working on the business. Sure. And I, I found I had a lot of fun doing it. So historically a lot of ourselves were founder-led. And so we've really pivoted. I've been working aggressively. I know I can swoop in. I know I can use my network and relationships to drive leads and referrals. I don't consider myself an especially good sales guy, but you're closing 15 to 30 in business.

You're not that bad.

Yeah, I've done multiple 9 figures of professional services sales, but it comes from the passion and the consultative nature. So I think of sales as our last frontier. The operations, the people, the finance side, pristine, like in your, in your 9 stages where you're solid 8, 8-ish in all of those areas, but sales and marketing were lagging big time. And so been trying to figure out in the sales, if you look at our growth engine from lead onward, team's exceptional. There's some levers we can continue to tweak and enhance on close rates and on commercial acumen to just enhance profitability, but we need more leads coming into the funnel. So that's our biggest constraint. We've been experimenting with a lot of different things. The pandemic definitely kind of changed up the game a little bit.

How do you source leads right now?

So most of it's founder-led. Most of it's just me texting someone on a whim.

Founder-led meaning you? Yes. Okay. Yeah. That sounded so fancy. Um, like I text people. Like, yeah, got it. Right. Yeah. So you texting people that you know just 'cause you've been doing this for a while is how you more or less source business. So it's warm outbound. Exactly. Yeah. Okay. It's probably in, in your industry gonna be a combination of 3 things. So you need to dominate trade shows. Conferences because you're gonna automatically be able to, you're gonna be elevated. That's where all the fish are in one barrel. This is especially true for kind of enterprise level sales like yours. And so enterprise is typically a combination of affiliate partners in some way. So kind of like the centers of influence who can kind of do joint venture type deals with where it's like, hey, you do this element that we don't do. We do this element that you don't do. Like how can we share in deal flow? And then basically co, co-participate in a lot of deal work, which I'm sure will happen. The conference stuff is like, we have a great conference playbook that we run for all enterprise sales stuff. Adam Hernandez, walk you through it. And then, I mean, you're doing warm outbound, which is always the first thing that you do, and you just happen to be able to do it to $31 a year, which is great. When you do that for gym memberships, you get to about $5 a year. Goes to show if you add more zeros to the thing you sell, you can go a lot further sometimes. But with cold outbound basically becomes a back to those two is the front end. So it's basically you use cold outbound to get your conferences and your affiliates. That's the outbound method that you're going to use as the primary action. The secondary action is securing the deals for both of those so that you can have your playbook that you run on a regular basis that you're doing to get those people in the funnel. And then to the same degree on the affiliate side, doing the deals that you need so that you can share in, in, in lead flow. And so is Sharan here? Is he here? No. Well, he was in here earlier. So Sharan was the CEO or president, excuse me, of Real Brokerage, which is a publicly traded real estate brokerage. And so Sharan came in and 6x'd the company from $200 million to $1.2 billion. And he did one thing, he did 220 speaking events a year, and then he just went from stage and then stayed for 2 days and would just sell every person who would come up to him. And that's how they took it from $200 million to $1.2 billion. And so sometimes it's like, we had dinner and I think I've told this story before, but like people are like, so what's the really scalable? It's like, that's what he did. He did 220 fucking events in a year. And that's how he added a billion to the business.

Oh wow. Yeah, we're doing you know, 10 or 20.

So we could probably do, you probably do more volume on this. There's probably way more you can squeeze per, because there's a bunch of different conversion points you can do if you set up the event properly. And then on the affiliate side, I see these as really good long-term things that you'll also still be able to source from the events that you attend. So it's kind of a really nice cycle in terms of acquisition. So it's like we do the outbound so that we can get the events, the events then feed us in these multiple ways. One of the things that we triage at the event is potential partners so that we can actually between events, have this as our ongoing kind of lead gen component. And then obviously we do direct deals from the event itself.

Yeah, that's interesting. So we have a robust alliance partner framework and so we have a lot of alliance partners.

Our challenge has been activation, getting them to continue to refer business. Exactly.

Because part of it is we almost have too many alliance partners.

Yeah. But they're not activated. That's the problem. And right. Yeah. So we think about affiliates as a second customer base. So Allen had 3 levels as the software company that we had. We had SMBs, and then above SMBs we had agencies, and then above agencies we had agency influencers. So people who like helped agencies do stuff. And so we actually had to have 3 tiers of service. And when I started, I thought I was gonna be serving SMBs. And then I realized agencies were really the people that needed to use our software to service SMBs. And so that became a huge level of leverage for us to scale the business really quickly. But then we were like, oh wait, we also have these super affiliates that have 500, 1,000 agencies that are in their network that could basically push us 100, 200, 500 agencies with one email. And so we had to basically create the, how do we make these guys feel amazing all the time that they're the best? And then these people who are coming in, we only made money when they activated and actually used the platform. And so it's basically customer success has to get put in as a function on top of the affiliate base. And so then that becomes a regular cadence of communication with them. And then the same thing that we were talking about earlier with the sales coaching thing, which is like, what are the quantifiables? What are their demographics? And what are the behaviors that they did? The ones that are the robust partners that do send you leads, what differentiates them from the ones that didn't? And then we just reverse engineer that into the actions that we put into activation on that regular cadence for the affiliates.

I know that was a lot of information, but yeah, that's a lot. I just got to go flip the switch, I guess.

So does that make sense? That check out?

Yeah, that's great. The playbook sounds really interesting.

Rock and roll. I appreciate you.