Foundations of Sales Success

Hey everybody, welcome back to the Magnetic Marketing Podcast. Today's episode, we get to listen to Dan Kennedy, Dave D, and Nick Luisi. Now, Nick Luisi has managed multiple sales forces, including GKIC. And today we get to talk about the foundations of sales success. Now, a lot of times we like to blame bad sales on the marketing or advertising arms of the business, when truly the issue is the salesperson. The salesperson is the one who's supposed to be able to understand how to close and is able to take care of that customer through that closing process. So if that's the case, what are the things that every business needs when they're installing salespeople? What are the scripts? What are the core needs that you need inside of your salespeople? And how do you know when you have found a great salesperson? This is one of those episodes that can truly increase your bottom line. Let's listen in.

I don't think there's anybody that has had a bigger impact in the field of direct response than Dan Kennedy. The legend of Dan Kennedy. Should be ignored at your own peril. They're not really lessons, they're kind of laws that you live by. Dan opened my eyes to what small business marketing looks like. Dan teaches strategic direct response that is timeless.

His ripple effect touches people who don't even know his name.

The world as we know it was changed because Dan Kennedy became obsessed with marketing.

Welcome to the Magnetic Marketing Podcast with your host, Dan Kennedy. Today you're going to discover the ultimate, and I do mean ultimate, step-by-step system for closing more sales and making more money. My name is Dave D, and with me I have marketing legend and founder of GKIC, Mr. Dan Kennedy, and the fashion plate of GKIC, sales manager extraordinaire, Nick Luese. Dan Kennedy is the author of over 24 books on sales and marketing and has risen to the pinnacle of 3 professions: speaking, copywriting, where he's the highest-paid direct response copywriter living today, as opposed to a dead copywriter who's still writing copy.

There are higher-paid dead copywriters.

And direct marketing consulting. Nick Luisi is a lifetime, lifelong salesperson and is a serial entrepreneur. He's risen to the top of his profession in multiple industries. He's a multiple-time President Club winner. What is a President Club winner?

You get to go on a trip. It's exciting.

Fantastic.

Okay, excellent. And has managed multiple sales forces including the formidable GKIC sales force. During the show, you're going to have the opportunity to ask both Dan and Nick your questions. And so let's get started with part 1, which is Foundations of Sales Success. So, Dan, let me ask you, how exactly does what we're about to talk about, sales, dovetail perfectly with GKIC marketing that we teach, which most people know us for?

Because marketing rarely can finish the job. It can set up the job. So CNBC reported yesterday that 94% of all commerce in the United States in 2013 occurred offline. So 6% is a pretty small sandbox. And then if you wanted to take out pure entertainment from Netflix to porn, and then you would pretty much have Amazon and maybe a point or two for everybody else, right? And even that's deceptive because some of what gets counted as e-commerce actually had a salesperson involved at some place. Now, to be fair, that media drives a lot of offline commerce as well, but Regardless of how you want to fool with that number, the overwhelming majority of sales requires sales. It can't be done just with marketing and media. And it is often the place where everything we do at GKIC for GKIC members sort of comes to a screeching halt and collapses into dysfunction. So I have two clients right now who, by their own admission, now have infinitely better marketing driving infinitely better and more leads into a horribly dysfunctional end-of-game sales place with horribly dysfunctional, inept salespeople. And so all we've really accomplished at this point is exposed how bad that problem is. And oftentimes— And now it must be fixed.

And oftentimes marketing gets blamed as well, right? Well, we didn't make any money from this marketing that we sent out. Address that a little bit.

Advertising and marketing almost always bears the blame because the fix for that gets delegated. The fix for the sales function often has to be done by the owner. Who often is part of the problem, even to the point that the owner could be one of the salespeople and be inept, dysfunctional, etc. So the first place all the blame goes is advertising, right? Which generally that discussion is that advertising brings us bad prospects, that advertising brings us bad leads. Then they'll blame the marketing. Right? Which, that is, that whole process really doesn't work, right? Because it had, at the end, we're not selling what we thought we would be selling. But often the advertising's fine, the marketing's fine. I mean, I had a client some years ago who spent $2 million with me, and I begged them to take a million of it off the table. And use it to fix the sales component part of their business. I said, just pay me less. Let me do less, but pay me less and take this money and here's what you need to do with it. You need to fix the inbound call. You need to fix the salesperson who is actually face-to-face with this patient/client. Please, please, please, please, please. No, we want better ads. You don't need better ads if you have crappy salespeople. Right? What's the point? You know, I mean, the football analogy is it's the red zone. So all the statistics in the middle of the field are nice, but if you can't get in the end zone and all you can do is kick field goals, you're still going to get beat.

Right?

Right.

Exactly.

So, Nick, one of the things that you talk about and you tell your team at GKIC and other people who you've trained is that everyone, every entrepreneur at their core needs to be a salesperson. Talk about that a little bit.

Yeah, I couldn't agree. As the business owner, we talked about, Dan brought up, it's your job to bring the money in, and many times that money is the sales, closing the sales for the organization. I think, you know, they get caught up in that, or it's messy, or they don't want to do that, and many of them haven't been trained or aren't good, and they get in the way. We find that a lot also. And really, everybody's a salesperson, to the person answering the phone. To the waitress in the restaurant. She's a salesperson. We had an experience last night where she wasn't a good salesperson. A good salesperson will build a check.

We were actually afraid of her.

We were afraid of her. We wanted to get out as fast as we could. But, you know, a good— well, they'll build the— they'll build the check average. They'll ask for the sale. They'll assume the sale. They'll bring the desserts to the table and ask people to pick. So really, everybody is at the heart of it is a salesperson. So, you know, there's somebody from Hollywood selling their movie. They're selling. There's a musical person selling their album or their concert. There's an author selling his book. We're all selling. The movie, HBO movie, The Entourage. I love the part where he said, "They paid me $2 million to make this movie." And his agent said, "No, they paid you $2 million to sell the movie. Your job is to go out there and sell the movie." And I think—

So I'll give you both ends of the extreme. So this morning I had Panera Bread for breakfast because we don't— they bring in lunch, but we don't get it. We don't eat. I overhear two of the staff members talking. And so one says to the other, I worked at McDonald's before this. I'm making more money here. But at McDonald's, we were asked to upsell. Here we're expected to upsell, and I don't really like it. So of course, she needs to be removed from the cash register and handed a broom. And she's only worth minimum wage, not $15 an hour, not $50 an hour. Nobody gets that, but that's the reality, right? And so at every level, you see, to your point, you see people that not only don't know how to do it, don't understand it, they have disdain and distaste for it. It's like Ew, that's dirty. Well, they've got to be removed from everywhere unless they are a person in a room who has no interaction whatsoever with the public. So if you've got, like in a dental practice, if you've got somebody who does the insurance billing, and as long as you don't let her answer the phone, leave the room in the back, see a patient, even walking past them, that person's got to leave by the back door, not the front door. Then it doesn't matter if she hates sales, right? But otherwise, you have big problems all the way to the top. So I thought about it about a month ago. So somebody asked me— it's a good question because I dabble as a stock market investor— is, is there any commonality in your losses?

Wow, that's interesting.

Good question.

Yeah, really good question.

So here's the commonality. Every single time I violate my own litmus test, which is that the CEO or a very top dog ought to have hardcore direct sales experience. They ought to have some time of sold belly to belly, nose to nose, toes to toes in the trenches, and they ought to still have enthusiasm for it. Every single time I violated that, you've lost money. I've lost money.

Wow, wow. You know, why do you think it is though, like, and we see this a lot with the professionals, with the doctors, with the lawyers, that they think somehow this is below them. Why do you think that is and what is the fix for them? Hopefully it's watching this and taking notes and saying what we're going to do, but what is the psychology there?

You know, I find it difficult because you've spent all this money to open up the practice. Right? You've invested all this money to, to, to be the best at your profession, and you won't do the things you need to do to put the money in the pocket of the business owner, which is yourself. So I don't know why, and maybe if you— let's—

I do.

Okay, I will let you get to that.

And by the way, chains are fixing it. So the reason a thing like Aspen Dental exists is because they put—

doesn't want to do it—

they put a salesperson in place to do that. Here's why, though.

Okay.

And it's very— and it comes down to very fundamental like fact of life is everything involves a sale and some people sell and some people buy. So they were sold, doctor, dentist, lawyer, etc. They were sold and sold hard that get this degree, spend 8 years, get your white coat, and your stethoscope and your certificate for the wall, and you won't have to do that.

Sure.

And so they bought that, and they have bought it intellectually, emotionally. It's part of why they did what they did. It is deeply embedded. And so every time any of us tries to say, well, wait a minute, let's analyze your business, let's see where the money comes from, Let's look at the top 5% in your field or in your community. That's so against what they already bought that breaking them free of it is very difficult.

Even in the face of facts. So if you look at our most successful members, so let's talk about, for example, Dr. Charlie Martin, right, one of our diamond members. Well, Dr. Martin, you know, his case size is humongous. Compared to what the average— and he's a master salesman.

When you see a dentist like in his case with say $40,000 cases, right, and a dentist with $4,000 cases, he may be 10 times better as a dentist than the $4,000 case value dentist. He might be doing dentistry that is 10 times more complicated than what that dentist is doing. Maybe, might, probably not, okay? But what is certain is he's 10 times a better salesperson.

Yeah, yeah, and he's making more money. If you go to the restaurant example like you just mentioned, you know, restaurant that I mentioned all of the time, they should actually like copy, there is Alinea in Chicago. And so talk about a really successful restaurant, you buy a ticket to go to the restaurant, it's like $250 for the ticket. And it's like a show. But then when you get there, they say, oh, do you want the wine pairing? Well, yeah, I want the wine pairing. Well, we have a deluxe wine pairing. And so they're upselling there. And so really, it doesn't matter what your business is, does it? This is the function that brings in the money, right?

If it is not that, it is the place where a lot of money, differential money, is left behind. So in certain times, for certain businesses, that's an affordable luxury. In other times, including the ones in which we live now, and for many businesses, it proves to be an unaffordable luxury. And they, they starve their way to bankruptcy court based on the lost differential money.

I think that's right. It's where the margin is, you know, it's really where the money goes into the pocket and it brings them to the top 1% of the higher echelon. I think that 10 years ago, there was funny money floating around. Everybody, everybody could afford to leave it on the table. Now there isn't. I mean, it's just you have to work too much harder. Our advertising has to work too hard, our marketing has to work too much harder. The sales, you know, the sales process has to be tight. It has to follow a system.

So one of the things that we talk about is that sales is the fastest way— getting better at selling, training your people to get better at selling— is the fastest way to increase your bottom line because you don't have to spend any more money on marketing. Why don't you address that, either of you?

I mean, well, to the point you just made, so every advertising and marketing step. None of it is getting less expensive. It is inflating at a greater— to greater heights faster than the inflation in price and in profits in almost every business. So the cost of getting somebody through the doors for the first time of any brick-and-mortar business, a restaurant and auto parts store, or you name it, is going up by a wider margin at greater speed than is their internal inflation in price and margin. So if you draw those two trend lines on a chart, you eventually— and many businesses, it doesn't take long— before the cost of getting people through the doors is so great in proportion to the sale that is being made that they cannot stay in business. And mid-range restaurants right now, perfect example, right? So Friday's announced last week they're selling all 276 of their restaurants to independent franchise owners and they're not going to be in the restaurant business.

Really?

It's because of this chart. It's because of this chart.

Right.

Right. If you do business online, same thing. The cost of getting qualified eyeballs to a site is going up by a greater ratio faster than is the inflation embedded in what it is that you sell. So in any business, the chart exists. We draw it a little different industry by industry, but it exists. And so The inevitable result of that chart, regardless of what business you're in, is death unless you fix it. So you can fix it by somehow bringing those costs back down, which everybody works on a lot, right? Everybody works on that a lot. Catalog mailers are trying to figure out how to trim the page size to 6x9 instead of 8x10, and we can say, okay, so everybody works on this. A lot, right? Or you can try and fix it by better monetizing the people you do get to walk through the doors. And that's not entirely sales-based. In retail, it's signage, traffic pattern, merchandising, etc. But it is largely sales-based. When you are creating leads and handing them to salespeople, this chart prohibits handing them to poor salespeople. Now it even prohibits handing them to mediocre salespeople. You can only afford to hand a good lead to a really good salesperson or a really good sales manager who then make sure he's managing really good salespeople. And if you aren't working on that, all the work you do over here is Band-Aids over cancer. The chart's the same, it just takes longer to get for it to put you on the steps of bankruptcy court.

Gotcha. So Nick, one of the things that you teach your guys and what you teach other salespeople is that there's a big difference between the consultative type of sale and the transactional sale. By the way, thank you for the pen.

And did you notice that, Dan? He took my pen. Yeah, well, look, I mean, you know, it's price elasticity. What's the difference between the two pens? One sold for $500, the other one sold for, you know, 50 cents. And they both write.

Quite frankly, I like—

Did you like yours better?

Mine better.

There you go.

So, but what is the difference between that, the transactional sale and the consultative sale?

Sure, the consultative sale was something that was coined in the '70s by a gentleman by the name of Mark Hanna. And really it is a diagnostic interview. It's a step-by-step process. It's a series of questions that's meant to get to a benefit or an outcome. And it's a process that is put in place and you really want to script it. You really want to have it move along the way because it allows the salesperson to be ever-present in the conversation with the customer or the prospect. A transactional sale is really something that is like what we talked about, the Panera. It's quick, it's easy. Usually the person is coming into the store, it may be price-driven. But by having a system and a process, you could raise the average price, you could raise the average transaction level on both. And I'll use one example that could go both ways. So when I get back from this taping, I gotta go get my son a suit for his homecoming dance.

Because you are the fashion plate. I asked to be the fashion plate at GKIC.

So you make sure he has a pocket square like Dan pointed out. But when you go there, these—

This is for his prom?

Homecoming. Homecoming.

Pocket square up here, condom down here.

Absolutely, absolutely.

Just make sure you take care of them.

Both ways.

I was wondering when something like that was going to happen.

But they'll have a process, right? They'll have a process for the sale. They'll have the suit, the tie, he'll have two ties, socks, underwear. There's a process. When I was wearing suits more in the day-to-day, I got my suits gets made. He had a process also. Well, there's two different sales, but one is more consultive, you know, what do you do, what are you doing, are you sitting a lot, you know, are you in and out of cars, are you in front of clients, what type of clients are you in front of. The other one is more transactional, but both has a system and both have a process and both have very high, you know, average tickets.

In just a few minutes we're gonna be going over actually the 6 steps that you come up with. In just a second we're gonna do that. So one of the things that we have here As a bonus that comes with this program is something that we call scripts. Scripts. It's a bonus that comes with the program. A lot of salespeople, Dan, hate scripts, right? They want to wing it. They think it hurts their creativity and all of that stuff. Let's address that because if we don't solve this problem, then the next 6 steps are going to be real difficult.

So most dogs would prefer peeing and pooping anywhere they liked. That would be their natural instinctive preference. It's just, I feel a poop coming on, I take a poop.

Nick often does that.

Because when we domesticate this animal, we enforce a variety of rules about where they can poop and where they can pee. Right? And so we determine that, we train that, and we enforce that. So salespeople are much the same. Left to their own devices, they would rather just poop and pee whenever they feel like it, wherever they feel like it, etc. However, if we wish to domesticate them, and we wish to have them be productive, we can't let them do that. So the fact that most salespeople prefer— they argue for spontaneity, and they prefer not to script themselves, be scripted, be managed with scripts, be taught scripts. That tells us two things immediately. One, if most salespeople feel that way, we know it's wrong. Ah, that's right. Okay, so even if we didn't know what was right, if we had never heard of scripts, we would know that was wrong. Sure, right. Because whatever most of them are doing is wrong because most of them fail. Most of them barely make a living. They wash out. They tend to move down the sales ladder. So the guy who is selling fairly sophisticated products in the second year of his career is selling cars by the eighth year of his career. Why? Because he's a crappy salesperson. So we would know it was wrong even if we didn't know what was right. Then from a managerial standpoint, the dog analogy is valid. You wouldn't have to know what was right if you walked into someone's house and there was dog poop and piss everywhere, and the place smelled horrible, and you could— you had to be careful where you walked to get to the couch. If you had never had a dog, if you had never seen a dog before in your entire life, you just arrived from Mars, you would know this is not right. There is something wrong about this. Then if you went and looked at top performers, So in any sales field, sophisticated, unsophisticated, to his point, there's a process for selling a cheap suit to a teenager and there's a process for— so sophisticated, unsophisticated, B2B, consumer, don't make any difference. You pick a category of selling and you find the 100 in the country who are earning the highest incomes in that category and you're going to find 98 of them are scripted. Now most of them will have scripted themselves, right? But they are scripted, right? In stand-up comedy, there are a few every generation— there's a few who literally go up there with no preconceived idea. They're improv people. They play with the audience. Robin Williams, who just died, capable. Jonathan Winters, who he admired, capable. But we can name them in each generation because they are so few, right? And by the way, it's ever more dangerous to do that kind of comedy in today's political correctness environment. Everybody else has scripted pieces of shtick that they move in and out of. They have written them. Every comedian is a writer, absolutely, comedy writer. They write. Louis C.K. writes, right? Joan Rivers wrote, right?

They— Seinfeld talks about—

Seinfeld is a writer. Larry David is a writer. These people write their stuff, then they memorize it, then they go do it somewhere that doesn't do them any harm until they get it exactly the way they want, and then they lock it in and they do it that way forevermore. Right. That's how top salespeople perform. And further, sales trainers who have longevity in that career are all script guys. Tommy Hopkins, before him J. Douglas Edwards, Sandler. These were or are, depending on whether they're living or dead, all script guys. The sales trainers who come and go, who are the flavor and fad of a year or two in corporate America, usually hired by people who've never sold, don't know how to sell, can't sell, okay. So they don't know good from bad, right? These guys are not— they, and many of them, pander to the desire of the majority of the salespeople by selling non-scripted selling. But their careers as sales trainers are very short-lived because it doesn't work, right?

Absolutely. You mentioned, we mentioned Jerry Seinfeld. There's a great movie called Comedian.

Oh yeah.

If you haven't seen it, have you seen Comedian? It's a documentary and it shows just how hard he works on his craft, how he did exactly what you said. Goes to— this is Seinfeld after he's made a gazillion dollars, right? Working in open mic nights to practice his material with the notes that he wrote, the script that he wrote.

Walk out with the handwritten notes, put it on the stool and keep on going. One of the things we were talking about Joan Rivers earlier, I was impressed by When you saw her being interviewed before a show, she was writing out them on big, big boards that she would put on the floor.

Yeah, she Scotch taped them to the—

people would take them and wanted to sign. She's like, you know, that's my work, those are my words. But also in the interview, when I was watching a documentary about her, they walked through her house and she was an avid reader. I mean, she had bookshelves in every room and she was a student of the word and a student of the script.

So there's a saying, writers write what they read. If you aren't— if your intake is not voluminous and it is not both broad and deep— so depth is— so if you are a high-end clothing salesperson or you write copy, you need a depth of historical and current knowledge about men's fashion, but you also need much broader, you know, eclectic interests. But yeah, you won't find— so you will not find a great marketer who is not a great student. You won't find a great comedian who's not a great student. You won't find a great salesperson who's not a great student. We were just at Titans of Direct Marketing, put on by Boardroom, and Marty Edelston, who built Boardroom from the ground up. And Boardroom has probably sold more $50 books by mail than anybody, than any company past or present. Brian Kurtzman, Boardroom, is speaking at InfoSummit 2014, and one of the things he's showing is the whole case history of their diabetes book campaign. Marty was, you know, one of his six pillars of life was insatiable curiosity. I mean, if in his presence anybody mentioned a book, he at least got it and looked at it. Charlie— I saw Charlie Munger, Warren Buffett's partner, recently interviewed, and Charlie, he reads everything he can get his hands on about biology, and he has made a correlation from biology to choosing investments, not just in the healthcare, but in general. And so, yeah, the salesperson who— all of the things that you see bad salespeople do, right? They refuse to work from scripts. They refuse to prepare. They're not real good students. As soon as the day is done, they're at the strip club. They're not at the library. There's a reason 80% of them hardly make a living, and these are all the reasons.

You know, I think the interesting thing is also that they're all curious. The greatest salespeople I've ever— they are curious. They're human. They're students of the human behavior, and they want to know what makes people tick.

Well, and see, a diagnostic sell, as you described, is— it is scripted, but it it works best if it is in the hands of a person intelligent enough about a lot of things to be able to move off that script a little bit, coming back to it. Any person who is intelligent enough to be intellectually curious, to actually want to know. Not just ask a question and then wait to ask question number 4 on the list, sort of it not mattering what Dave says as his answer, but to be actually curious about what this person does, what makes them tick, what their attitudes are.

So, you know, again, as a bonus that you get with this system, Nick, you put in here some really tremendous scripts that you've written for your guys, everything from upselling to thank you calls. So everything, I guess, is— you script everything with your team.

We try to script everything. Goes back to what Dan says, you know, you hang around with animals long enough, you know, realize you need to tame them. And so you need—

that was a much more elegant way of saying it, by the way.

But I think you have to script it, and I think I 'Cause what we've talked about, the pros will make it their own, right? They'll get to the core and the nuances of it, but they will, they'll put their own words in, their own language in, their own voice inflection, but it really needs to be scripted. We wouldn't go see a movie when everybody's just talking. I mean, Larry David was the only one to do that successfully on HBO. Other than that, you really want everything scripted. You want them to own the script, and we really take a lot of time, and we tweak it, 'cause every morning we have a standup and we have some programs to talk about We talk a lot about that and teach people how to do that, but we really say, what are we hearing? You know, and we— what's working in the scripts? What do we need to tweak? What needs to be motivated? And once— sometimes you'll go down a path and the script will be bringing you one thing, but you need to make a quick adjustment because there's something more pressing. And so you want to get that to the front of the script and move it along.

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