Value Your Customers, Create Efficient Sales Systems, and Maximize Your Profit With David Gerber

Welcome to the B2B Growth Blueprint podcast, where we talk with entrepreneurs, founders, and leaders at B2B services, tech, and SaaS companies to learn the systems and processes they've used to create success for their business. We'll also learn from marketing and sales experts to provide insights to help you grow your business. I'm your host, Mark Osborne, and the podcast is brought to you by Modern Revenue strategies and their 10x ROI B2B growth guarantee. Schedule a free diagnostic call to learn the fastest path to double your B2B revenues in just 90 days. Hello and welcome to another episode of the B2B Growth Blueprint podcast. I'm very excited today to welcome David Gerber. David is a technology executive. I'm gonna read this to make sure I get it all right. A technology executive and entrepreneur with more than 30 years of experience in the software industry. He is the CEO and founder of OnPlane Consulting and the managing director of investment banking at Merit Investment Bank. He's an authority on business process automation, sales leadership. He's founded 3 different technology companies and has extensive experience in technology mergers and acquisitions, go-to-market strategies, growth strategies, sales leadership and global alliance teams. And he currently sits on the board of directors at HughGPT. So that's a mouthful of stuff, David. I'm really excited to have you here. You seem to work with companies in a couple different areas, both kind of investments and lining up some commercial infrastructure as well as growth. In your own words, tell us a little bit about what you do.

So, Mark, first of all, thank you for having me. I appreciate it. And hi, everybody. I love being on these types of podcasts and these programs because I, you know, my— at the forefront of everything I do, you know, I want to help founders and I want to help companies grow. That I, I enjoy doing it. Uh, I, I already stepped on some of the landmines, guys and gals, so believe me, uh, there's no magic formula here.

I—

but what I do is on— at On Plane Consulting, we started On Plane Consulting because there was a, a missing, missing pieces as I, as I worked with more companies. First, on the lead— on the sales side of things, hiring right salespeople, the right sales strategy. People get all wrapped up around the methodologies. I'm here to tell you there is no magic methodology. You know, there's ways of doing things. There's fundamentals. So I work with founders on the fundamentals of growth. And so from a sales standpoint, strategy, go-to-market, and then I built a marketing arm with sales or marketing experts, not just website builders where, you know, you get this email and, you know, build 3 websites and, you know, 16 landing pages for $1,299 or something. That, that's just stupid, right? There's real ways to do that that can really ignite pieces of your business to grow. And then there's lead generation side. And, and, you know, Mark, Mark's, your book does a good job of explaining this is not getting wrapped up around the wrong leads.

Right?

You have to have a good ideal customer profile, and you have to have good scripting. And anybody that says the phone is dead is, well, just not good at what they do. So, because that's not true. And, and there's right ways to do things around it. So I built this kind of a triangle of services to help companies grow in the effort of getting you from point A to point B. Now, what do I mean by that? So, in the investment banking world, you know, if you're a CEO, maybe you built your company to get to an exit. Maybe you build it to— it's a lifestyle business. I don't know, whatever it is. But if you're building it with a thought process of at some point being done, right, exiting, you need to do things the right way. And 8 out of 10, maybe even 9 out of 10 of the companies that I talk to aren't doing things the right way. Now, that doesn't mean that they're Wrong, right? It just means you're not doing them the right way to get them the maximum outcome that they want, right?

What are those things that, you know, say there's somebody listening that they have in mind, you know, I wanna do a Series A or even more and really grow. What do they need to be doing? What's the right way to get it right at the beginning for outside investment?

Yeah, that's a great question. And so the, the— you have to kind of try to put yourself in a buyer's seat, right? Buyers don't get all excited necessarily about your product. Uh, you do as the founder because, you know, what you built is awesome, clearly, right? And it's the most life-changing thing anybody's ever seen, except they've heard that 1,400 times today, right?

Sure.

So that doesn't get them excited. So what gets them excited is, uh, you're solving a problem. That's problem is a real problem people have. What's the market for that problem? And then tell me about the current workings of your company. So what is the EBITDA? What is your ARR? Is it recurring? Is it one-time? Is it services? Is it customer-focused? Do you have a customer-focused problem like 70% of your revenue comes from 2 customers or something, right? These are the things that buyers or investors look at. And the myth of, you know, I can't get VC money or investment money unless, you know, they get 10 times their return. That's kind of an old adage. It's really a myth. Less than 1% of the time that actually happens. So realistic outcomes is what they're looking for. And to do that, you need to have solid EBITDA numbers. You need to have solid accounting. You need to have solid methodologies. What's your sales methodology? If you don't have one, and I'm not talking about medic or all the fancy names, forget that. I have a lead and I take it from lead to execution to deal won or lost, right? What's that methodology? If you don't have one, ding, right? If you're operating the business on cash and not accrual, ding, right? If the numbers, you know, look like a roller coaster ride, So they're looking for the least amount of risk, right? And then growth. And so I help companies get into that, into a position to make that better. That's what I do.

One of the ways that we've seen that really sort of helps with that, and a lot of those things you just called out, you know, sort of the roller coaster ride or the, you know, being overly reliant on an individual account and not even sort of recognizing that as an issue, is companies that really take the time to build a system. Uh, and to just sort of define that system of how do we go from they're a stranger to they're a named prospect in our CRM? And then how do we go from, well, they're a named prospect to that first contract? And then how do we go from that first contract to growing for faster renewals, larger upsells, more referrals? Those systems and defining those, uh, are, are really the key to, you know, starting to have a framework where you can talk to outside investment and say, here's why we're confident that With a little investment, we can see these kinds of returns both for ourselves and for you.

Yeah, that's exactly right. And I actually have another company we built on renewal management, right? Because smaller companies, it's a big part of— in technology, at least, it's a big part of their revenue and not enough of them pay attention to it. They're managing this stuff by spreadsheets, right? Which is killing them, right? And so, you know, net revenue retention, right? What you have to keep in mind is if you're in the technology space on average, not forget the extremes, right? I'm a big believer in focusing away from extremes, right? The average multiplier in value is somewhere between 5 and 8 times EBITDA.

Yep.

Give or take, right? If we can raise your EBITDA $1 million, we just made you $8 million.

Yeah.

It's that, it can be that simple, right? Or $5 million, right? You know, so what would it take to get to there? Not, I, I need to be the next Elon Musk or, right, anything like that. So that's at the end of the day what I try to help people think about. How, how, where are you? How can we get you to there? Is it more customers? Is it more money for your product? Is it reducing, uh, expenses? Uh, what's the optimization there that gets us there? the fastest way, right? And if you have a model like that planned out, finding investment opportunities is way easier than just telling everybody you got the best product in the whole world.

Well, I've actually heard someone I was talking with the other week was saying that sort of that net recurring revenue, which is reducing the amount of churn that you have, increasing the number of clients that are on a recurring model, increasing your ability to get more money from those existing clients, if you can play around with all those little KPIs and that calculation of that net recurring revenue, that's the fastest way to increase the company valuation because there's so many things that are already there that you can make kind of minor improvements on today. And, you know, sort of outside investment really values that metric as they evaluate companies.

That's right, Mark. That's exactly right. So, I focus a lot on net revenue retention in tech companies a lot because It's, it's one of the things that's missed. There's— any CEO will say it's really important that we get the contracts renewed. Yes, it is. But do you understand what's in those contracts? Do you understand your true costs? Do you understand what's happening with your vendor programs? Do you understand what's happening with your renewals? Is there any upsell possibility or cross-sell? Are you co-terminating your agreements to optimize your cash flow?

Right?

Those are all the things that a lot of CEOs, they just don't know. It's not that they're doing anything wrong. They just don't know. All right. And so it's a blast for me to get somebody from point A to point B. I love what I do. So I think people are better at what they do when they like what they do.

Oh, sure.

And I enjoy it. I like working with CEOs. I like working with creative people that are passionate about what they do. And because I am, I don't know if you can tell, but I am. So I like what I do.

Let's flip to the other side of that sort of revenue stream. So you think about, you know, recurring revenue is one thing that's obviously really important and has a lot of opportunity. When we were talking earlier, we were talking about, you know, sort of more of the very top of that funnel of getting the right leads. And you made a comment about the right leads. And obviously, you know, that's a big touchstone for me. As you and I've talked about the book I published, Are Your Leads Killing Your Business? It's all about sort of, you know, the quality over the quantity. And you talked about an ideal customer profile or an ICP as a tool for that.

Yes.

Tell us a little bit about you know, what you've seen be successful for companies and why building an ideal customer profile is so important, some of the missteps that you've seen companies take when they don't think through that.

Yeah, it's a piece we added on to OnPlane because when we first started OnPlane, we were really sales and marketing. And what we run into a lot is you get in there and you find I'm gonna say it this way. People are guessing. They're reaching out to prospects if they can fog a mirror, you know, your prospect, right? I get that. I've carried a bag. I've had a quota. I get it, right? But at the end of the day, it's really not an efficient way to get where you need to be, right? So understanding your average contract value, where is that? Does that drive us to where we need to be on the EBITDA side, right? And you work it backwards. Well, what— who do we have to contact to get our average contract value of whatever it is, $20,000? I don't know, whatever it is, right? And who do we have the most success with selling in, in that area that can get us to that ACV? Not just can they be a customer, but can they get us to that ACV? And so it— and you just start narrowing it down, right? And then you go hard. And now we have a truly ideal customer profile. But understand that every ideal customer profile Has— I'm a mechanical engineer by degree. So, we always built machines on tolerance, right? Plus or minus, right? So, every customer profile has a plus or minus in there, right? You're gonna— I ran a company with 4 people. We were $2 million. We got clients like Bloomberg and Marsh McLennan and, you know, Knoll, AARP, right? We had no business. That would not be in my customer profile.

Right. Are you kidding me?

But we got them. So I went back and we developed the customer profile that was more in line. We were more mid-market to upscale market companies, right? And we had an average contract value of between $80,000 and $100,000. That's where we were. And we stayed there, right? And we started contacting people and we got to know what they, what their problems were in that range. And I really, that's one of the things we help with. We focus a lot of time with customers on Let's get that right. Let's build scripts based on understanding of the needs of that profile. If we get fortunate enough through a referral or something outside of that, well, good for us. That's when the CEO gets involved, right? But otherwise, right, let's focus on that like it's a diamond, right? And go after that. And then you, you know, work about how many net new customers do we need to get to a goal. If we need 10, right? Well, we know, we already know we're gonna need 100. To talk to, right? I mean, numbers, right? And so it's just important to focus on that and then having the right conversations with the right people, which, by the way, big misnomer. You always have to be talking to the decision maker.

Sure.

I'm— when I closed Bloomberg, I never talked to Michael Bloomberg ever. I offered them $100,000, by the way, to have a conversation with him, right? A discount, right? And they, and they said no. So, uh, uh, I've closed a lot of deals without ever talking to the CFO or the CEO or anything like that. Big, you know, multimillion-dollar deals, by the way. And, and so that— it's a, it's a bit of a misnomer, but you need to understand the process. And so we, we built a program around that to do it right, not just, you know, picking up phones and, oh, we made 695 calls today and got you, you know, 100, you know, leads, right? No, stop it. That's just ridiculous, right? So doing it right is more important than doing the volume.

Yeah, we've seen just as you talked about the sort of building this ideal customer profile based on who you're actually getting as customers, right? And then sort of segmenting that further into sort of tier 1, tier 2, tier 3. So if you look at, you know, just those 20% of customers that are making up 80% of your revenue and thinking about who are they and how are they different than that other 80% of customers that's only generating 20% of your revenue, you start to find some really unique ways of focusing sort of what you deliver, how you go to market with it, the way that you, you know, can really sort of tell that one story, the one story you want to really resonate well.

Right.

And from moving from a quantity to a quality perspective, one of the KPIs that we really encourage people to use is you know, what percentage of the prospects that you're bringing in or leads that you're accepting into sort of your sales process, what percentage of them match your tier 1 ideal customer profile? So are likely to be, you know, one of those 20% of customers that generates 80% of your revenue because if you're bringing in a lot of leads that aren't aligned to that, then maybe you're, you know, maybe your messaging isn't right. Maybe you're not in the right channels. Maybe you're You know, sort of blinding yourself with, uh, quantity instead of quality.

Exactly right, Mark. We, we group them in A, B, C, and D, right? Very much along that same exact line, right? You, you have an ideal profile and these are the hot— you know, if I pass an A lead to your rep, right, that phone better be ringing on that client in the next 30 minutes or I'm gonna reach for the phone and strangle you, right?

Warm it, dogpile it.

Right, right. And, you know, and Bs and Ds, and Ds are like almost like Stephen Covey's, you know, it's not important and it's not urgent. I don't care. Right?

Right.

If they want something, I'll email them, you know, whatever. But, but those As, Bs, and Cs, man, you are on them and, and you're, and you're nailing into their true whys, right? And you're creating a vision for them, right? Whatever methodology you decide to use, I don't care. It doesn't matter to me. By the way, I'm still, people say maybe I'm a relic. I don't know. I'm a solution selling still guy. I know Michael, I know Michael Bloom, I know Mike Bosworth and I don't know, it's still relevant to me. I still build visions for clients. I walk them through, you know, a documented plan. I give clients, top-tier clients, a buying contract.

Yeah.

When we get to a serious point, Here's the steps we're gonna go through, right? And if we don't get past a certain step, we don't progress to the next step.

That's right.

So I don't send you a proposal until we do these first 3 things.

That's right.

So don't ask, right? Because, yeah, so I still do those things and it works for me, right? So, you know, I, like I said, I work within a client's atmosphere, whatever it is you wanna work in, that's fine. The fundamentals of all the things you just talked about, are still critical to a successful process. The fundamentals are everything. Blocking and tackling in football is way more important than that exciting pass that, you know, for 80 yards, right?

Well, and the fundamentals really open up the opportunity to do those other things. So just like you talked about, you know, scoring these ABCD leads, you know, one of the things that we've seen be really valuable is once you've got this scoring system in place, Now you can start to layer in automation, AI, and say, well, these D and C, you know, sort of leads. Now we use our sort of one-to-many or our automated solutions or our AI-driven, you know, chatbots and interactions to sort of lead that, which helps you sort of refine those capabilities and some things that are kind of sexy and cool and emerging. You've got a place to use them where there's low risk. But you've still got, you know, sort of your real human, your best human focus on those A's. And you've got a real balance that allows you to capture efficiency while at the same time winning where you need to win.

Agreed. All of that makes perfect sense. I still just find people like to be talked to. They still like human interaction unless you are a true commodity that I could order it on Amazon, I get it, right? But if you're offering solutions, people still like to be talked to and they like somebody to care about them. And so if you're in this field, it's one of the things that I assess for some companies is, is do you really care about the people on the other end of this? Because if you don't, if you're just in this for, you know, a commission check or something, you should find something else to do.

Sure.

Because you're never going to be really good at it. You'll be okay at it, but you're never going to be really good at it. You have to actually care about the person on the other side of the table, even when that person on the other side is not nice.

That's right.

And I, I'm sure you've run into this. I know I have. Sometimes they're just not nice, right? For whatever reason, I don't know, whatever. But, uh, that, that's not why I'm there to help them. And if they want my help, I'll give it to them. And if they don't, I wish them well and go find somebody else to talk to. Right? So I find that that method has worked for me and my clients do well with that method. So—

This has been a great conversation. I appreciate you sharing all these insights. We're wrapping up towards the end of our time, but I didn't wanna get away without talking about HughGPT. We were chatting a little bit earlier, and I thought that was really interesting sort of, you know, on that AI Sort of front. Tell us a little bit about HuGPT.

Thanks for asking, Mark. Yeah, I'm really excited about this opportunity. I've got a couple of partners. One, the CEO of this company, the founder is a Native American woman who is amazing. She's amazing. I don't know how else to say it. She's great. And a tech CTO that is, you know, he's off his rocker good. Right? Really. But putting those together and, and structuring it in the right way, they asked me for my help to take them to the next level. But HugGPT is the other side of everything you've seen about AI. Everything you've seen about AI is creating stuff, creating images, creating audio, creating text. Right? But, you know, there's been a concern, obviously very noted concern of is I'm concerned about AI. Is it right? Is that the right person? Right? Is that the right voice? Well, if you extend that out into banking and insurance and government, right? It's a real threat. And we've built a solution that can in milliseconds determine you're signing into your bank account with your face or your voice or whatever. I'll know if it's you. And I'll know, by the way, if somebody— if something was altered. You submit a document, of some type, I'll know if it was altered by AI or in some way. If you submit an image that was altered, I'll know instantaneously, not in days or weeks, but instantaneously. And it's amazing stuff and it's very applicable right now because laws are coming for stuff. We're trying to get out ahead of it to say you can create all the AI stuff you want. I think AI is Great. It, but then there are places where, you know, sometimes there are nefarious people out there that don't always wanna do things.

Sure.

Best interest of others. We wanna make sure that you don't get to do that.

Or even, even the students out there Photoshopping their parents' signature on the report card. Yeah.

Wish I would have had that. But, yeah, it's, you know, cybersecurity has been, you know, obviously, a big focus. My friends at NightDragon, Dave, Dave DeVault and Amy DeSalvatore, they, you know, they're doing a great job with grouping those companies together. But this is, this is something outside of that even. That's more infrastructure-based. This is really, really immediate feedback. Like, I'll know right away whether that's real or not. You think, you know, if you're in a courtroom, you're again, insurance companies, banks, all those things. Real, real. Right now it's security based, right? But there are a ton of, of like right now in Hollywood, right? I live in LA, right? So, you know, the music industry is on its head about this stuff, right? They're concerned actors are being replaced by AI. So we're just gonna be kind of the cop that says, yeah, no, you created a very good AI, but that's an AI, that's right. And so I'm excited about the possibilities of that solution. It's gonna be a lot of fun. So I'm not only helping founders, I am one.

That's right. That's great. Well, David, thank you so much for making the time. I know our audience will have gotten a lot from the conversation and all your insight. For folks that wanna, you know, get in touch with you, what's the best way for them to get in touch?

So the best way to get in touch with me would be via email. I'm a managing director at Merit Investment Bank. You can reach me at david.gerber, Gerber like the baby food, easy to remember, at meritinvestmentbank.com. You could dgerber@onplayconsulting.com, either way. My cell phone number is 949- 292-4674. Feel free to reach out to me. I love working with CEOs, with people. I love helping. So, you know, just here's what I would tell you. I'm from Philly originally. I'm the guy, if you ask me, I'm gonna tell you. So don't be offended if you don't like the answer. I'm gonna tell you ahead of time, right? So just saying, I'm here to help you and I don't blow smoke. So I welcome the opportunity. And Mark, thank you. Thank you so much for having me. I appreciate it. This was fun. This was great.

Absolutely, David. Thank you so much.

Okay. Have a good one.

Thank you for joining this episode of the B2B Growth Blueprint podcast. We hope you've gained insights to grow your business. If you enjoyed this discussion, please rate, comment, like on your favorite platform and share to others. will find it useful. Do you know a CEO, founder, or leader at an early-stage B2B services, tech, or SaaS company who would like to be a guest and share their story? Send us a note. Let's schedule a conversation.