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Andrew: Hey there, freedom fighters. My name is Andrew Warner. I’m the founder of Mixergy.com, home of the ambitious upstart. How do you build a business around an idea? Today’s guest told me before we even started recording this interview that he’s not an entrepreneur because he says he’s a slave to an idea and that’s the way it’s been for him with his business. But if he is, and if he is a slave to the idea and not an entrepreneur, than how did he build such a successful business around this idea? Well, we’ll find out in this interview. Today’s guest is Justin Roff-Marsh. He is the founder of Ballistix, a management and marketing consultancy which specializes in sales process engineering. Justin, welcome.
Justin: Thank you, Andrew. It’s an honor to be here.
Andrew: What do you feel comfortable saying about your revenue? What size annual revenues are you doing at Ballistix right now?
Justin: Well, small. I think we do under $1.5 so just under $1.5 a year in sales.
Andrew: OK. And when you say you are a slave to an idea, what’s this idea that’s held you captive for, it’s been now about 10 years since you run the business and you say it’s held you captive even longer. What’s this idea?
Justin: Well, I started the business 20 years ago and I started the business on the back of an idea and the idea was a different way of thinking about sales. Traditionally, sales have been the domain of individuals, sole practitioners. And I developed the idea as a result of a business that I was involved with beforehand that there was never a reason why that it had to be that way. There was not a reason why sales couldn’t be a functional process in a formal sense like any other part of the modern organization.
Andrew: What do you mean? Well, how do most people see sales? And then I’ll ask you how do you see sales?
Justin: The easiest way I found to explain the idea is to contrast production, a typical production or manufacturing environment as it is today with how it would have been 100+ years ago. So if you think about how production was done, all manufacturing was done more than a 100 years ago, manufacturing would have been the domain of a single individual, a person [??] , a person or craft person responsible for an entire process. In the core, that’s how sales looks today.
What we’ve been trying to figure out how to do for the last 20 years is to grab the sales function kicking and screaming into the 21st century and to design these environments that look exactly how production environments look. And of course the key difference is division of labor.
Andrew: So I want to get into how you built up this business but I need to examine this process, this division of labor vision that you have.
In your upcoming book “The Machine” you talk about a company called, I think, JSG?
Andrew: So I think in that description of how that organization works we can see how your vision would work within a real company. Can you describe how JSG works?
Justin: OK. So initials of that company were scrambled to protect the innocent.
Andrew: So this is actually based on a real company.
Justin: Yes. It’s a real story. Everything about the story is real except for the initials. So what’s being described here is a situation, a complex sales situation where sales are being prosecuted by a team rather than a person. So I think the first chapter there describes a scenario where through the eyes of the salesperson who is out there in the field performing appointment after appointment and doing nothing other than face to face appointments, supported by an executive assistant back at the office and a technical expert working beside her in the field.
But it’s painting this picture of sales as a team function where you have a tightly coordinated team just like a sporting team perhaps, working together to prosecute a sales opportunity. So that’s the vision and so of course from the sales person’s perspective what it means is a situation where the sales person does four appointments a day five days a week and nothing else, no paperwork, no data entry in the CRM, no customer service and no expediting client orders to production, none of that.
Andrew: All the sales person does is talk to clients. Initiate new sales. Not even follow up transactions. That’s the way you envision it.
Justin: Yes. And in fact, they don’t even generate their own sales opportunities.
So our general approach is to centralize absolutely everything that can be centralized and if we’re on a situation where it makes sense to have a field base sales person, I got to say, between you and me in most situation it doesn’t. But if you’re in a situation where it does make sense, that person should be on the field 100% of the time face to face with potential customers almost 100% of the time. If they’re not driving between meetings, they should be in a meeting face to face.
Andrew: What’s so heretical about this? For the person’s who’s listening to use and saying “Hey, sounds like an interesting idea. All right. So he built a business around it. That doesn’t seem so shocking.”
By the way, as I said that, you actually moved back away from the camera. So what is so heretical about this approach?
Justin: Well, it’s an interesting question because if you look at all the components of the end result that we built, in isolation none of them is particularly offensive. But the idea is heretical and the reason it is heretical is because we’re challenging. If you examine what we’re doing from first principles, what we’re actually doing is challenging a core belief around which true sales environments are designed and that core belief is sales are produced by individuals. It’s an individual dilemma. So I talk about the artisan’s dilemma. I wasn’t around 100 years ago but if I was, I’m sure the crafts people who are making the transition to an industrialized economy had a very difficult time of it.
Andrew: I see. They were saying ‘I’m special. I’m creating something unique, something beautiful and you guys want to turn it into some process? You’re not going to create this beautiful thing in a process”. That’s the way they went kicking and screaming and you’re saying the same thing is going to happen with sales people.
Justin: Yes. And this is belief. And we see it today in sales but in other areas too. There’s so much instinctive belief that intrinsically if we apply division of labor, if we have a team working together, if we automate, in other words, if we do all the things that constitute the industrial revolution, quality will go down. That’s almost the default position.
Justin: Well, if you have work done by machines, if you get rid of the specialists, if you get rid of the generalists and have the artisan and have a team of specialists, then obviously quality will go and the only problem is that history shows very clearly that quality goes up and not by a small margin, by an enormous margin. And there are technical reasons why that’s the case. There are technical reasons why production output and quality are two sides of the same coin. But normally only physicists and engineers understand exactly why that’s the case and in production environments and project environments we’ve just gotten used to it. We’ve witnessed for long enough how these environments work that we forget to question why. But of course when we’re talking about sales, that isn’t the case.
Andrew: Here’s the way that, tell me if I understand your vision right and then I want to go back into the biography of how you built up this business because I think we can learn a lot from your process in building this business. But average company says we need to grow sales, let’s hire a salesperson. That salesperson is going to grow sales by finding potential contacts, by reaching out to them, by staying in touch with them, by building that relationship with them. You’re saying no. It’s not about the sales process. What they need instead, excuse me, it’s not about the sales person, sales is a process, not a person. What they should be saying instead is we need to grow sales, let’s create a process. And the process means that there’s one person who initiates the sale. And then there are other people and a whole system in place to facilitate and help them. Sales is a process not a person.
Justin: Yeah, yeah. Well the first thing to realize is that most organizations that go out and recruit a sales person, what I call the go get-’em tiger approach, where they recruit a sales person, they pay them as much as they can afford in the form of a wage and then they promise them variable (?) on top of that and then they sit back and cross their fingers and hope for the best. Most organizations that adopt that approach don’t actually get what they expected. I mean that’s the harsh reality. You know, employing sales people is a bit like starting an Amway business. You may be successful but the odds of that being the case are vanishingly small.
Andrew: You started out as a ballet dancer, is that right?
Justin: Yes. That was before this business obviously.
Andrew: I figured, right.
Justin: I’ve tried a lot of things to grow this business but classical ballet wasn’t one of them.
Andrew: I know there were four big pivots as you told me before the interview started. But before you got into those pivots, before you discovered this way of growing sales, you were a ballet dancer. Do you call them ballerinas? No, ballerinas are women.
Justin: No, I was a ballet dancer. Yeah, so that, when I was at school I was, I guess interested in electronics, fanatically interested in electronics. And for whatever reason I was dissatisfied with the idea of life behind a soldering iron. So I had a hobby where in an attempt to be more athletic I had been dancing in the evenings. I think I had seen Fame on TV and I figured that that was probably the most athletic thing that I’d ever seen in my life and if I wanted to be an athlete I should probably go and do that. So, yeah. And when I left, when I finished high school I took a punt and auditioned for I guess you’d call a school of the arts here. So I trained for four years as a, I trained full time for four years as a dancer. But I never joined the ballet.
Andrew: I see. This is in Australia.
Justin: In Australia.
Andrew: I remember when Daniel Felter joined in elementary school. I forget what it was called, the club that did plays. And it was mostly for girls and he got teased mercilessly. None of us thought hey wait a minute, he’s going to be with girls so maybe it’s an opportunity for them. We all started teasing him. Did you get teased as a ballet dancer in Australia.
Justin: Not as much as you would expect. I mean I was teased a lot anyway because I was always the smallest kid in the school. But so I think I didn’t have a lot to lose. I was at the bottom of the totem pole at that time anyways, so, taking up ballet didn’t have much of an impact. And you know what? I’ve got to say I didn’t sit and think about it. I think I remember watching that show Fame and I was just obsessed with the idea. You know I bought a, I bought one of those strength training devices you know the, you know. And my mother had danced actually so she, I remember she gave me some lessons, showed me the basics of bar work and.
Andrew: What was this movement that you said, you know the, I bought the exercise device? What was the exercise?
Justin: It was one of those strength training devices they used to sell in magazines and you grabbed it by the ends and you compressed it and you, so.
Andrew: Oh I see. It was like this, it was this, I don’t even know how to describe it. You just said something…
Justin: It was like a hydraulic….
Andrew: It was like you bend something….
Justin: No, it was more like a hydraulic compression device and you’d grab it by the end and crush it until it’s…
Andrew: Oh, okay, I see.
Justin: And so I started doing them and started doing chin-ups. The funny thing was I guess I was a nerd as a kid and I went to school in a very rough area in Australia and being intellectual was almost a disability. So I was far less interested in getting good marks at school and more interested in doing chin ups and training with this strength device. And then when I saw Leroy, the protagonist on Fame, you know I couldn’t think of anything that would be more glorious then being a ballet dancer.
Andrew: I see. All right. And you said that the work you were doing just before ballistics is what opened your eyes up to this new idea. What was that work?
Justin: I was in the insurance industry. So I’d had a, my brother and I had a business, a restaurant actually that had failed. And I discovered through a friend that you could make a lot of money selling insurance. And as a result of all of the things I’d started and experimented with I wasn’t afraid to try new things or to talk to people. So I went and joined this company selling insurance. Really for me it was a lark. You could make thousands of dollars a week and all you had to do was sell people insurance. It was, compared to running a restaurant it seemed to me to be pretty easy.
Andrew: You’re the kind of person it sounds like, or you were as a salesman, the kind of person that you’re telling the entrepreneurs and CEOs who are listening to us right now, not to hire. What made you, yeah, what made you such a good sales person? I love hearing the tactics and the approaches of really good sales people. What made you such a shark back then?
Justin: I think desperation in the beginning because I was under water financially and fearlessness, I didn’t have a lot to lose. So when you don’t have a lot to lose there’s no point being fearful. So I started off I was relatively shy for a salesperson but I forced myself to sell door to door. Because the great thing about selling door to door is there’s no way of being rejected faster. I mean, sure you can get on the phone and cold call people but the great thing about selling door to door is if people open their front door they’re obliged to be polite for at least a minute or two before they summarily dismiss you. So in that minute or two you have more of an opportunity then you tend to have on the phone.
I remember going door to door in a suburb in Grands Plains, which was a developing suburb in Brisbane. And years back I went and drove through Grands Plains, and as I was driving through there I was able to chart my progress as a sales person. At the beginning of the suburb I was lousy, you know, I didn’t sell a single policy in the street. And by the end of the suburb I’d sold almost the whole street.
Andrew: Really? So what happened? What was the difference?
Justin: Well, confidence. I didn’t sell the whole street. I sold almost the whole side of one street in Grands Plains before I gave it up and stopped selling door to door. Well I think you learn people are relatively predictable. Especially if you put them in unusual circumstances. If it’s Saturday morning and there’s some long haired, I had long hair back then, if there’s some long haired person knocking on your door wanting to sell you life insurance, or a savings plan as it was, you know that’s a very unusual circumstance. And people no matter how different they are tend to react predictably in that circumstance. So for you to develop a script to initiate a conversation is actually very easy because people’s behavior is so predictable in those circumstances. So I discovered that. And I also discovered by trial and error that there was a pattern that would embarrass people into it and get into engaging in a conversation.
Andrew: What was it, do you remember?
Justin: Yeah, I used this technique, and I still do, the whole time that I was selling. I would, I don’t remember how I did it but I would get people to talk to me for more then the time it would have taken to dismiss me. And then I would stop and I would say, my goodness you know what? You have just engaged me in conversation and I’m an insurance sales person. I’m sure you have better things to do with your Saturday then talking to an insurance sales person. Why are we talking? So I would always sell by asking people why are you talking to me. And then later when I was selling on the back of appointments that I’d scheduled I would always start by reminding people that they just scheduled an appointment with an insurance sales person and I would ask them to explain, why would you do that? What would possess you to do that?
Andrew: What’s the value of asking them why would you continue this conversation with me at a time, on your off time, or why would you book a conversation with me? What’s the value of asking a question like that?
Justin: Well it’s like a sales person saying something that casts dispersions over his own product. What ends up happening is the customer rushes to your defense.
Andrew: And then they sell themselves on the value of talking to you and having booked an appointment with you.
Justin: Yeah. They explained what. I mean, their position is my behavior is absolutely rational, let me explain why.
Andrew: I see. So maybe, I should before an interview say, you’re a really busy person. I know you’ve got tons of other things you could be doing instead of doing this interview. Why are you doing this interview with me? And then have them sell themselves on the value of having done an interview with me which would make it easier for me to interview them.
Justin: I guess. Although I suspect not many people who you interview are trying to get you off the phone.
Andrew: No, but every once in a while there is someone who is pushed into it by someone in his company and he’s a little bit uncomfortable. Those are really tough interviews to do. Alright, so that’s a tactic I feel like all of us in the audience can try at one point or another. But there’s a bigger thing that you’ve said here that I didn’t spend enough time on which is, you wanted to fail often so that you could. I’m guessing what you do is you want to do it a lot so you can build up your confidence and not feel so shaken when someone says no to you. To not make each sale so special that you’re shaky about trying to close it. But what you’ve also said is you want to be able to kind of predict the future. By talking to a lot of people you can start to predict the future because you’ve seen how other people in those situations react, right?
Justin: Yeah, well I guess scientists do experiments with sand flies before they do experiments with monkeys because they have a shorter life cycle. So it’s about, I mean learning something new’s an iterative process. There’s trial and error. So the faster the time between errors the faster you learn.
Andrew: So far what I’m seeing is a salesman who does really well and is not a superstar and can become an even bigger superstar in sales. What I don’t understand is why you think there’s a better way. Feels like you found the better way. Feels like the better way had already been there before you got there.
Justin: Well if I’d stayed in sales I probably would have been okay. But when I had some success in sales I ended up getting into management. So I managed a small team, a team of 25. And that was a team of, there were four teams of 25 in the organization I worked with. It was the top performing team. So from there I went on to run the office as a whole. So I ended up running an office with 100 interim sales people. And running a team of 100 sales people makes you basically a recruiter. So we would recruit about 450 people a year to maintain a team of 100.
Andrew: Wow, that much turnover.
Justin: Yeah. I was talking to somebody in the auto industry yesterday and I was pointing out that back in those days we used to turn out people then a car dealer will turn their inventory. Yeah, so we had a full time trainer and we recruited people and put them into a two week course and then released them out into the field, and the attrition rate was terrible. Of course if you were good you could earn 10, 15, 20, 25 thousand dollars a month. But the odds of achieving that were relatively small. And the lifetime of sales people was relatively short. And it was an extraordinarily unpleasant environment for managers, extremely stressful. The whole environment ran off the energy that was pumped into it by the sales managers. So and I feel like working in that environment was like training at altitudes. I got to see how to make the traditional sales model work.
And I say that to our clients often today. I say to them, look with respect, if you were serious about this traditional sales model, the model that some people in your organization want to cling to, why don’t you execute it properly? You know I can tell you how to execute it properly. I’ve been there. I worked in an organization where we really pushed, pushed the traditional model to its limits. But of course what I realized when I got there was an incredibly unproductive and stressful and unpleasant environment to operate in.
Andrew: You know, let’s take a moment to…
Justin: …Mass dismissals. This will give you some idea of how unpleasant the environment was. It was necessary for us from time to time to round up a bunch of sales people and dismiss them. But not dismiss them in a pleasant way you know on a Friday afternoon. We discovered that you could get enormous value out of dismissals because it would motivate everyone who was left behind. So we would usher people after lunch, after the morning sales meeting actually when there were a hundred sales people milling around, we’d usher the uncomfortable few into an office we call the fishbowl because it had glass on all four sides. And we would summarily dismiss them.
Then of course they would leave in front of all their peers. And some of them would be crying, some of them would be angry. We even had somebody start a fight on one occasion. So, you know, we had this terrible expression developed where we would talk about how the sales people sell better when there was blood on the walls. And in retrospect it’s disgusting. You know, it’s not something that I like to boast about. But that type of environment is a product of trying to scale the traditional approach to sales. It doesn’t scale because it was never designed to scale.
Andrew: All right, so then where did you get the idea for something different?
Justin: So I was sick of that environment and I decided that I wanted to leave. And the owner of the company had, well, was in the process of investing in a book, in a chap who’d written a book and created a budgeting program. So a chap in Australia had written a book, I’m trying to remember what it was called. Oh, it was actually called “First Class Ticket”. And we renamed it, “How To Start With No Savings and Get Rich Safely”. So I ended up leaving the investment company and starting the insurance company and signing on as CEO of this new company, which was really nothing other than a person in a book and a budgeting system.
Andrew: Why does a person in a book need an investor? Why did your company invest in this book?
Justin: Well, he had been trying to sell it in book shops. It was like a binder, a ring binder with the contents. It was extremely, cleverly designed and he’d been trying to sell to book shops for $125 and none of them were used to the idea of carrying $125 product. So he poured years of his life in creating this thing and was at his wits end.
And he came to us thinking that we could sell it to our clients. And of course, the company’s reaction was all [??] we sell something for $125, it’s chomp change. We couldn’t be bothered with that. But Gary, the principal of the company, who’s been a good friend ever since, saw the potential in it. I don’t know why to be honest and invested in it. And in the beginning we decided to sell it as a membership program.
Andrew: I see.
Justin: So we doubled the price of it, which we thought was brave and started selling for $345 as a membership. So the idea was we’ll add some value to it. Rather than just getting a book and a budgeting program, you get to join a community and you can come to events and you can call and get support.
Andrew: What year was this?
Justin: So, I’m terrible with years.
Justin: It was maybe 25 to 28 years ago.
Andrew: OK. Wow. How old are you now? I wouldn’t have realized you’d have 28 years of business history behind you.
Andrew: Forty-five. OK. All right. So you guys saw 25 years ago this whole membership model that I wouldn’t have even thought it existed before the internet and that’s what you wanted to create this, what you wanted to turn this book into. How does that lead into this epiphany?
Justin: Well, what we knew better than anything back then was how to build a sales team. So of course, that’s exactly what we did. We refined some of our managers from the insurance company, which ended up meeting a horrible end. The whole industry that we were a part of in Australia essentially fell off the cliff at that point in time.
Justin: Well, because there was a whole industry that had grown up selling a product and it was probably not the same as a whole life policies in the U.S. It was fundamentally unsound. To give you an idea of how unsound it was, I think that if you sold someone a policy, which was essentially what you call a 401K, a [??] policy and I think if the contributions were about $300 a month, the sales person would earn from memory about $6,000 commission plus the agency would earn another $6,000.
Andrew: I see.
Justin: So what was happening was the insurance companies were paying probably 100% of the first couple of years of the client’s contributions in commission to get the annuity income. So the returns on these products were terrible so it was only a matter of time before client’s stopped purchasing them.
Andrew: You know, let’s take a moment for a second here and, since I already asked you a personal question about your age, I am going to ask you an even more personal question. What does it feel like to be in an industry where you’ve mastered sales to the point where you think I can take my sales ideas and push them into this book and turn that into a mega-hit. When you’re feeling that way and earning the kind of money that you’re earning based on the payoffs that you’ve just described to us, what does it feel like? How does your life change because of that?
Justin: What’s the transition…
Andrew: What I mean is this. On a personal level you’re changed when you feel the sense of superpower. I remember when I even did sales back in college, telemarketing sales and they told me to assume the close, a basic sales tactic. I felt so superhuman, like I could go talk to anyone and get them to do just about anything at that burst of confidence and that burst of ability to talk to people was energizing.
And then of course, you make money and even back in college I made telemarketing money and went out with friends who are nervous about spending a couple of bucks on beer. I feel like Richie Rich so again even more confident and life changes measurably because of those things.
Now here you are operating obviously on another level. Can you take it to the personal level, either tell me like what’s it like for you or what’s it like for a typical salesperson in this environment, away from business?
Justin: I think that the, if we’re referring back to the insurance environment, it wasn’t as exciting as you would assume, except for a very small percentage of people. I can think of one or two who were genuinely happy operating in that environment. So going out in the evenings, doing presentations in the evenings in people’s homes. There’s one chap who springs to mind who ended up, he’s been in the industry ever since and going on to be a big earner and he loves the industry.
But I think the rest of us were probably not comfortable in that environment and the more that I got to learn about the product that we were selling and the structure of the environment, the more unhappy I was. So it felt very transit to me. I felt like it was here today but probably going to be gone tomorrow.
Andrew: I see.
Justin: I talked about the problems with the fundamentals of the product that we were selling. Back in those days, we were discouraged from reading up on the products that we were selling. Product knowledge was a bad thing because the more you knew, the less you would sell.
Andrew: Did you feel guilty shoveling this stuff to the people who are paying you money?
Justin: Yes. The more successful you get, the less excited you are about what you’re selling.
Andrew: All right. OK. So I understand now why you’d be looking for a different approach. All right. So now you’re working at this new company. You’ve got this new model for a book and an idea. What happens next?
Justin: Well, we tried to build kind of half-heartedly this sales team that we had previously. I say half-heartedly because we were already a little bit tarnished by that model and I’d left the industry because I wanted to get away from that model. And what we discovered was if you’re selling a product that’s $300, $400 and it became $700, then it became $1,200 for the membership. But even at those price points, it’s not enough to maintain a sales team with the traditional model.
So what we realized was to make the sales team more effective, to compensate for the fact that the margins were lower, I started experimenting with finding ways to make the sales people more productive and what we started with was generating sales opportunities for them. Because sales people will always say, “Well, if you give me more sales opportunities, if you give me the good leads, I will sell more”.
Now, a very interesting thing happened at that company. It’s called Hudson Institute and it still exists. It’s very successful in Australia. And I’ll always remember this because nobody believes it’s going to happen. What happened at Hudson Institute was we started experimenting with methods to generate sales opportunities. So direct mail, direct marketing was something that was big in the U.S. at the time so I was importing all of the books, reading and circling up whatever information I could and transporting it back to the U.S.
So we had a few failed starts with direct marketing and for whatever reason copywriting came easy to me and the big breakthrough that we had was when we started running seminars. We tried selling the product through mail and building a traditional mail order business but at one point I remember we wrote an ad, a long copy ad and we put it in the Sunday newspaper and it was a tiny ad, just [??] with copy and we put about 30 or 40 people in a room. And we went from putting 30, 40 people in a room to putting 1,200 people in a room in a matter of two years. And in fact, we went from putting 30 people in the office to putting 4 to 600 people consistently in ballrooms in hotels across Australia in probably six months.
Andrew: Copywriting is powerful.
Justin: Yes. Yes. So we would write these headlines How to Start with No Savings and Get Rich Safely, Money Whizzes Online, Strategies for True Financial Success, all these great headlines and for a long time I was just a copywriting machine. I would turn in ad after ad after ad and we’d split test them and we [??] the living daylights out of this thing. And it was exciting times.
The year that I left Hudson, we put 42,000 people through events. And this is in Australia, a country 1/20th the population of the U.S. So they were heady times but the interesting thing was we weren’t making much money back then because all we were doing was putting people into events, people bought tickets to attend the events. The tickets paid for the promotion and the learning of the event. And that was a triumph for us because we could take those sales opportunities and provide them to sales people. But the amazing thing we discovered is that when we host sales people with, they essentially turn the fire hose on sales people. We gave them more opportunities than they could possibly handle.
What we discovered is their performance increased only incrementally. If we provided a salesperson with ten times the sales opportunities we didn’t get ten times the output from them. And that was when I first realized that there was a fundamental flaw. You know, if a system exhibits diminishing returns that quickly when you attempt to scale it then clearly the system is badly designed. So we went through a process there of trying to strip away from the salesperson everything that we possibly could. And in the end by the time that I left Hudson we had the sales people sitting in offices like doctors with prospects lined up in the waiting room like patients.
Justin: And the prospects would file in and speak with the salespeople and they would sell them a big box containing the Hudson system and the membership. And they would leave and the next person would be ushered in by the receptionist. So we had four or five of these sales locations in Australia and sales people did nothing other than present. And we talk now about our client salespeople doing four appointments a day in field environments. Sales people back then were doing ten or twelve appointments a day. At one point I remember we did the math so we discovered that we had all of these sales opportunities that we generated that hadn’t been spoken to by a sales person. And we didn’t know how many so we said to the person we had working on the database at the time, can you run a query and find out how many of these people haven’t been touched by a salesperson. And he came back into the room twenty minutes later and he said 15,000.
Andrew: 15,000 leads that were hot leads that weren’t yet being talked to by a sales person.
Justin: These are people that paid to come to an event, they bought a ticket to attend the event. And at the event they ticked a box on a form saying they’d like to speak to a sales person. And 15,000 of them hadn’t yet been approached. So that’s when we realized we had to change the structure of the machine.
Andrew: Alright, before you go into the change that you made, teach me something that you learned from these salesmen who are talking to people and within one meeting getting them to buy over $1,000 worth of product. What was one thing that we as entrepreneurs and salespeople and business people can learn from their experiences that maybe we can use when we’re selling?
Justin: I guess if you talk to sales people, the people who are doing it, they would all believe that they had, and I’m sure they would have their own tricks, their own special things. And there are these things assuming the sale, mirroring the prospect and all the stuff that’s been discussed on Mixergy interviews by other people. All of those techniques are good. But from my perspective, from the managers perspective, my takeaway from that is simply that, that sales in any competitive environment is inherently problematic. Some people will, some people won’t, so what. It’s a numbers game in other words.
Andrew: Okay. So you’re saying if you get enough sales people in the room you’re going to make sales.
Justin: Exactly, exactly. So attempting to increase sales by improving your sales techniques is an approach (?) from rapidly diminishing returns. If you’re a lousy communicator and you get better you’ll see an increase. But going from better to extraordinary doesn’t bring a comparable increase because ultimately prospects are not stupid. They know their situations, they understand your product if you’ve done an effective job of communicating it, and they’re perfectly capable of forming a rational decision whether or not they should exchange their money for whatever it is that you’re purchasing. And I think a lot of sales training over sales training and by default ends up implying that there’s something wrong with potential customer’s cognitive function. If you communicate what you have effectively then a percentage of people will purchase.
Andrew: You were able to get more people to come to your events by changing the copywriting of the ads that you used to tell them about the event. There was nothing comparable in the rooms where the sales people were working that helped increase sales? It feels like it’s….
Justin: I think there is, I think you’re right. I think there are two visions of the same reality. I mean, if you said well you did something extraordinarily to put those people in the room, it depends what your reference point is. Compared to what the ads that everyone else was looking like at the time, then absolutely we did something extraordinary. We wrote long copy ads with a conversational tone that were race, they had that as seen on TV quality, and they were seductive.
Andrew: How did you seduce with those ads?
Justin: The whole quality of the structure of the copy was seductive. But I would refer to that as good communication, effective communication. But it depends where you’re coming from. I guess for the uninitiated, writing copy like that is almost black magic. But once you’re initiated, it’s just effective communication. So I’m sure from the salesperson’s perspective, once you’re competent it’s just effective communication but if you’re struggling then the tricks, un-tricks they’re genuine magic.
Andrew: Is there one that you could teach us that would demistify this magic? And the reason I ask is because right now what we have is a really thrilling story for entrepreneurs and all these business people to hear you develop, to hear you grow your business, it’s exciting. But I don’t want just empty excitement on Mixergy. I want it to be something that you can feel when you listen to it excited by it but also armed by it, that you can go out and try it.
Justin: I hadn’t thought about this in so long because even if we work in sales environments, we really never touch people. We assume they can [??] but I just thought of one trick that I’ll tell you about. It’s really, really cool. And it’s not really a trick, it’s an approach. I remember back when I was selling. I was not a natural salesperson so I was a sales sponge and the one thing that I did that other people didn’t do, you know, the company paid for us to go to expensive trainings and seminars and so on. And I remember everyone else would sit in the room and rationalize, they’d absorb or they watched the material and then they’d rationalize what they didn’t make sense for their circumstances.
But I couldn’t be bothered doing that. I didn’t see the point of it. My approach was to memorize it exactly, complete with the American accent. Complete with the American affectations, even though they were completely inappropriate for the Australian environment, who cared? I just followed the whole thing absolutely hook line and synch in and the reason I got huge value out of that training when nobody else did was because I took it exactly as it was presented and used it exactly without changing a thing, not even the accent.
Now one of the things, so here’s the trick. I remember that I watched a course by I think Canadian Sales Trainer. It was very old at the time I watched this. His name is [??] I think. And he had created this course where he broke the sales presentation, the verbal patter, into chunks and he had the content of the communication, the meat of the communication, then he had bridges in between them. And I took that and built a system for our sales people where we would break the sales presentation instead of trying to teach them an entire script like other sales trainers do, I thought them the basic structure of the presentation and I got them to memorize not the content but the bridges. In other words, to go from one step to the next and I got them to understand where they were.
So in a selling environment there’s a process that the buyer goes through and you need to know that process. So there’s the old attention interest conviction desire close thing. And obviously the sales person’s presentation has to match up with the prospects at and to go from one phase of the conversation to the next you need bridges. So I might say to you ‘Andrew, in order for me to propose some ideas that might make sense in your situation, it’s necessary for me to get your answers to two or three questions. Do you mind if I go ahead and ask them?’
Now, the trick is to memorize the bridges and to memorize the structure and to ad lib the content in between. Because that gives you a framework to play within.
Andrew: So I know what are the different steps that I need to go through with this potential customer and I need to know how do I get them to go from one to the other, what’s the segue and that to memorize that to this day you can repeat it, it seems like, exactly the way you might have used it back then.
Justin: We drew charts so we made a graphical depiction of the structure as a whole. And then we learned the segue and we got our sales people to sing them, to repeat them at speed. We got them to watch a snippet of conversation and pick exactly where in the structure they were. So we trained them like military on the structure and the segue to use your term.
Andrew: I see. OK.
Justin: So that’s a cool trick, I think.
Andrew: Absolutely. You know what, I was listening to an MPR show the other day where this guy said his parents and he are so obsessed with meat that his dad would put a cut of meat in front of him and ask him ‘Tell me where on the cow did this piece of meat come from?’ and to this day he can stilt do that and I can see you’ve done this same thing with the sales process. You snipped out a piece of a conversation with a potential customer and say to your sales people, “All right. Where in the sales process is this customer.”
Justin: Well, it’s strange talking about this stuff because I hadn’t thought about this stuff for ten years or more, 20 years.
Andrew: I love this. Thanks for taking that little segue with me and let’s go back, then, to your story. You are, I meant to say thanks for taking that non sequitur with me, but I want to go deep into your story and also keep moving forward with it. So let’s move forward now. And you are now at a place where you saw you have 15,000 more leads than your salespeople could handle. So already your machine is starting to work, but there’s a bottleneck. So what do you do next?
Justin: So we were stripping as much from salespeople as we possibly could. So we’d taken away from them the requirement for them to generate sales opportunities. We then took away from them the requirement for them to schedule their own calendars. So we had a scheduling team that set up the appointments. We took away from them the requirement to do any paperwork, to get involved in client on-boarding. So we stripped it back until the point where salespeople just sat in a room and did appointments.
Justin: And really, it was at that point or just before, when I left Hudson, Hudson was my primary client. So I continued working with them after I left. So I think I had left by that point and eventually Hudson went on and became a financial planning firm. But by then I had left and started up what became Ballistix.
Andrew: And Ballistix is the natural extension of what you started to do at Hudson, if I understand you right? Where you said, wait, if we don’t ask the salespeople to find their own leads, then they could focus on sales and we could get even more leads for them. If we don’t ask the salespeople to focus on scheduling, then they could process more sales and we could do a better job of scheduling for them. And every piece of the sales process you wanted to do that to. Am I understanding you right?
Justin: Yeah. So the idea or our method of operation, whether back at Hudson, was to strip everything away from salespeople so that they could just sell. And of course, there were many ways of accomplishing that. The most visible way we had accomplished that was building this machine that generated huge volumes of sales opportunities. And we were well recognized for that because it was so visible. So the idea that I’m talking about, I recognize now a division of labor. Back then we didn’t used to talk about it as division of labor. It took me a long while to kind of distill it down to first principles. But I knew that we were onto something good.
Andrew: So now it was time for you to launch a business. And as I said earlier in this interview, there were four big pivots in this business. So let’s understand why this couldn’t just be a sales training or sales consultant company that would hit the ground running and be profitable from day one because it’s run based on a solid idea. And it’s run by a salesman who can pretty much sell anything, whether it’s bad insurance or upwards of an $1000 package. What happened? What’s the first version of Ballistix? What did that look like?
Justin: Well, I think because I didn’t appreciate at the time, the fundamentals, Ballistix started and it was called [??] Advertising. It started off as a direct marketing agency. And so what we were doing was selling the most visible part of the new model. Not the fundamentals of the new model, the most visible part. And that was direct marketing. So direct marketing was pretty new in Australia at the time. We were clearly proficient in it. And it was just the obvious thing to do. So I started off as a, I guess, freelance direct marketing copywriter. And then I started to employ people. And I think I enjoyed being a copywriter and I enjoyed employing people. But the more successful we got as a direct marketing agency, the more I discovered I disliked the agency business.
Justin: Well, we kind of set ourselves up to fail because direct marketing was growing in Australia at the time, but the kind of direct marketing that I liked was the kind of direct marketing I think that you like, the traditional, you know, long copy. To me, that was direct marketing. But what was happening is that direct marketing was being dumbed down by the other direct marketing agencies to appeal to mainstream organizations. So direct marketing really came to be known as any ad with a 1-800 number on it. You know, so, because it had to be reduced to something that could be sold 23 year old marketing managers in large companies.
Andrew: I see.
Justin: So the way to make money as a direct marketing agency was to distill, to dilute your product until it became saleable to organizations that knew nothing about direct marketing. I was never interested in doing that so we were always on the periphery. So that didn’t mean that we didn’t have big accounts, we had some great accounts. What it meant was that the organizations that we worked with were always those organizations that had an enormous economic incentive to take it in house, because it was core to their business.
Andrew: I see.
Justin: So you know if I look back at our most successful clients and our highest profile accounts over that period, nearly all of them ended up with an in-house direct marketing department doing what in many cases we either taught them to do or helped them to do significantly better.
Andrew: What’s an example of a typical client who did well with you and then had to take it in-house.
Justin: There’s a good example is a pharmaceutical company. A good friend of mine in Australia, Peter Nicholas, built a business from scratch. When I met him he was running psychic ads and doing all sorts of weird stuff.
Andrew: And he was selling vitamins by mail?
Justin: No, psychic ads.
Andrew: Oh, psychic ads, okay.
Justin: You know, you dial a psychic for one…
Andrew: Got you. And so he would work with you. I could see how you’d increase sales, how he would be willing to try direct marketing, effective direct marketing tactics. But then he has to take it in house because that’s the business essentially, right? (?) of what you create.
Justin: So he built a 20 million dollar a year pharmaceutical company selling primarily a product called Fat Blaster. A huge, huge success. The first company in Australia to distribute pharmaceutical products via telephone without a field force. So you know we worked with him for years on all different facets of the business. But of course everything that we did was taken in house because it made sense to do that. And we’d sell a better consulting to help him take it in house. But ultimately it was just a bad business model.
Andrew: So that’s version one. What’s (?) happens and what’s version two?
Justin: So that led us to realize well what we really should be doing is consulting. Because we don’t, running a creative agency it’s not in line with our message. By the way this whole time we’re preaching to organizations about how they should be structuring their sales functions. And that message would for the most part be regarded as kind of entertaining. You know I’ve been invited to come and speak at company events because it was such a radical message that everyone got a rise out of it. But the message was there the whole time. So then we changed into a consulting firm and we had a few different goals of the consulting model. The first one was to sell time by the hour.
Andrew: Okay. And that I see is not a step forward. Most of the entrepreneurs who I interview here start out doing that and eventually create a product so it’s not about hours. Is that what happened with you?
Justin: Yeah. Well, I employed a lass who came from, she’d worked, she was the executive assistant to the head of Capital Radio in London. And she came across and worked for us. And she was shocked that I was booking my own flights and doing a bit of this and doing a bit of that. And then she said, she said to me I’ve never seen someone so unproductive in my life. She said, we recruited her to be what we called a marketing coordinator. But she said, look before I do this marketing coordination thing let me just step back into my old EA habits and manage your calendar for you. So we, two things came out of that. Number one is we recognized the importance of separating scheduling from, we recognized the importance of centralized scheduling. Which has become to be fundamental to us in how we build sales environments. But what happened, Jules her name was, booked my calendar solid with consulting. And it wasn’t her intention. There were so many people who wanted to talk to me, she would talk to them. And somebody said, oh can I, how much is that? And so because she was tenacious she said, oh it’s $1,000 for Justin. And it went from $1,000 to $2,000 to $4,000. And she sold every waking moment of my time for about two years.
Justin: I remember, there was one occasion where I went three months without visiting home. And this is in Australia which is a relatively small place and the most of the people live in the one strip of coast. So yeah, when I say she sold all my time she sold every single day, every single day. For almost two years. I just traveled and ran workshops.
Justin: So, (?) ran the business.
Andrew: Why couldn’t you have just structured your work and then handed it off to other people?
Justin: Well I guess I, well that’s was, that was what we did. The challenge was well how do we? Initially I’m thinking, well, I’m going to build a creative business out of doing all this consulting. But what would happen is I would travel around the place and do my party pitch and get paid well for it and nobody would ever implement a thing. So I went from selling what I call brain on a plate, just sitting in a room and talking to people for, you know, a couple of grand a day to selling structured consulting. And that’s where we employed other consultants. So we’d go and do what we called audits. We would go and audit an organization’s sales environment and we’d go back to them with a report explaining to them exactly how it should be structured, how to make the transition and so on.
Justin: And we started off selling that for $6000 and then we got the price up to $35,000. And we sold lots of these things. And we had a couple of people who worked with me and we produced these tomes, you know, some of them were over 100 pages thick. So across the length and breadth of Australia we went into these businesses and wrote these encyclopedic documents that to this day are stored in leading executives’ bottom drawers and taken out periodically and dusted off and reflected on. And I still get people who, if I go and run a seminar in Australia, somebody will come up to me and say, we had you guys come and run that study for us, you know, 15 years ago, 10 years ago and it was the best thing we ever did. I still go back and read that document.
Andrew: And do they actually do anything with it? Or is it just great reading and an eye opener about the way things should be?
Justin: No, no. They never did anything with it.
Andrew: They never did? It’s just, thank you for doing this document. Even years later they remember and are grateful for it, but they didn’t do anything with it?
Justin: No. It was too radical for them to execute. But they look at it and they know that it’s true. They were impressed with the unadulterated wisdom in it, but they would never attempt to execute it.
Andrew: You know what? My wife works for a company where they had this intern who, on his last day, handed them this 20 page document with all his analysis of the business. This guy’s brilliant. He analyzed every piece of their business and he told them how they should do everything different, how they could really improve it. Everything from why are you guys on Outlook and Exchange? It’s slow. And he listed all of the problems that people had and he said, we can easily move to Google Apps, which people would appreciate more. And I even thought, that’s the simplest thing in his report. No one’s going to do it. Why don’t people act on those things, especially when they tell you years later that it makes sense? It’s not like they don’t buy into it. It’s not like they don’t believe the validity of it. Why can’t they do anything with it?
Justin: I’m so happy you asked this question. I think this is a really valuable point. The reason they don’t is that ideas are worthless. The value’s in execution. So ideas are a dime a dozen. The value’s in execution. Execution is what’s difficult. And the larger you are, the more complex the organization is, the more difficult execution is.
Justin: So we realized that back then. You know, we were selling these ideas for $35,000. But so what? They weren’t worth $35,000. They were worth $20. If I had taken all those reports and lined them up side by side, they all said the same thing. The only difference was they were personalized. They had a different cover page. If you took them all and condensed them into a book and took the book to Borders, Borders would sell it for 20 bucks. That’s what the ideas were worth. We were overcharging and clients were overpaying. You know, that’s one instance where prospects are non- intelligent.
Andrew: And neither is the salesperson, you’re saying?
Justin: The value’s in execution.
Justin: So that was why we pivoted the next time. We realized we had to get out of selling ideas and get into selling execution. Give away ideas, sell the execution. That has been my mantra years now. Give away the ideas, sell the execution.
Andrew: So how do you execute now when you have to walk into somebody’s company where everything’s already structured, where everywhere they have an understanding and you want to turn things around? I mean, I think it was in the first chapter, maybe it was the third chapter of your upcoming book, which you have free online which means when you talk, when you say ideas are free or they’re worth much, you’re putting them up online.
Andrew: So it’s actually in paper?
Justin: Yeah, it’s in paper. People can request it, it’s free, we’ll send it to them. The first three chapters, that is.
Andrew: Well, I actually just found the whole book online, I think, except for the last three chapters.
Justin: Yeah, you can read the whole book online too.
Andrew: Well, the thing is, though, that you say, you’re going to have to fire many salespeople. And then you’re going to have to hire new people. And of course, because you said at the beginning of this interview that sales is a process, not a person, you’re going to have to implement a whole new process. So how do you get people to change so radically?
Justin: Well, there was one more pivot before the current one and that’s absolutely the answer to the question. And we went from selling information in the form of reports to selling consulting to our current model where we sell ongoing engagements. So in the next iteration, selling consulting, we discovered that trying to change organizations quickly doesn’t actually work. There’s a problem with it. So we probably underestimated how hard it was to effect change and to maintain change. And for a long time we sold engagements. We sold projects that were six to nine months in duration. And it took us a long time to figure out how to drive that change and I talked about how. But then we realized gosh, if we go into an organization that’s $20 or $50 million in sales, that has reasonable [??] size, some inertia, and we radically and rapidly change it and leave six months later, it’s going to change back surprisingly quickly. Organizations are incredibly elastic.
So the trick is not to change, well, there’s almost a dichotomy. There’s some things that you need to change quickly and other things you have to be prepared to change very, very slowly. So I’m not giving you much of an answer.
Andrew: No. That makes sense. So what you’re saying is, Andrew, I have this whole new vision of how they should do business. They buy into it, they believe in it but I can’t give it all to them at once. We have to slowly shift and when you slowly shift it, how did that work?
Justin: We spent a lot of time doing radical shifts and that doesn’t work well. And then we realized well, there are some things that have to be radically changed all of the sudden and then there are the things that have to change gradually. The challenge is knowing the difference between the two and here’s the challenge. If you read the book and want to, any book and want to implement it yourself.
To do execution, you really need to have a profound, as Deming [SP] used to say, a profound understanding of the fundamentals of the environment. So you need to have more than just an instinctive understanding of cause and effect. You have to have a literal understanding of cause and effect. You have to actually understand how the environment works because there are some things that need to change all of the sudden that are critical and there are other things that are kind of window dressing, superfluous.
So if I talk in more concrete terms, if we’re talking about transitioning a traditional field based environment, transferring the ownership of the salesperson’s calendar to an executive assistant and transferring ownership of opportunities as something fundamental that has to happen all in one go, it has to happen absolutely. There is no if’s, no but’s. It’s black and white, no gray. So that’s one piece that you have to get absolutely right and you have to do it quickly and suddenly. There are other things that have to evolve over time. You can create that change and you have to be prepared not to see a massive increase in revenues or any massive changes elsewhere in the organization because it’s going to take some time to bet that down. So you have to prepare to see it through.
One of the things I love about a working with managers in the U.S. and I’m going to get off side with Australian clients here as the saying goes. But what I’ve discovered working here is that managers in the U.S., particularly in manufacturers where we do a lot of work, less so in technology companies. But particularly manufacturers take a longer view. They just make decisions for the longer time.
Andrew: In the U. S. they do?
Justin: In the U. S., yes more than in Australia. And that is so important to us. It has a big impact on the effectiveness of our engagements here. Because they seem to have a better understanding of the fact that their organizations are complex systems and have to evolve with certain extent into changes. You can’t just snap your fingers and radically change them and expect the changes to stick.
Andrew: I see. All right. Let me just see if I can digest everything that you just told me. You’re saying whether I read a book and learn a new idea there or hire a consultant and learn a new idea from the consultant, I need to find the one big dramatic thing that I need to do quickly, not do the whole thing but find out one dramatic thing that has to happen quickly and start with that and then move on to the other things. Or did I, I feel like I didn’t fully explained what you just said. Didn’t do justice to what you just said.
Justin: Yes. I think that there’s a progression of changes and we’re talking here about change management which is a very sort of abstract and esoteric subject. And probably only relevant to businesses above a certain scale where inertia starts to become a real factor. But yes, I think driving change requires that you make a series of small, critical changes in a precise sequence. And so it’s taken us a long time to figure out how to make the kind of massive transformations that we make in our client’s businesses. And I’ve got to say that our clients today probably don’t recognize how massive they are because they happen in increments. And each increment makes sense at the time.
Andrew: All right. I’ve got a few things here. I know we’ve gone over time. Do you have a little bit more time?
Justin: Yeah, yeah.
Andrew: I also want to find out about how you do, you say I sell all of our 90,000 annual contracts over Skype. I want to know how you do that. I want to know about the package that includes both consulting and technology. But since we’re talking about the structure and implementing it at a company, this sales process. Let’s talk about a new company. Guy gets funded, it’s time to bring in a sales department. How does he implement this from the beginning so that in the end he has a sales process that’s great, not a sales person that’s great?
Justin: So it’s a great question. And when you’re starting from the beginning it’s so much easier. But the last thing that you want to do it to take the advice of your colleagues or investors. Because most of them have probably succeeded in spite of their sales advice, not because of it. So the last thing you want to do if you’re not a sales person is go and employ a traditional sales person. Any more then if you’re not a technologist the last thing you want to do is go and employ a CTO. Because you don’t know how to, and I had this discussion with Jason Cohen about this. I approached him on behalf of one of our clients and said, how do we select a good CTO. He wrote back to me and said, you don’t, you can’t. Anymore then if you’re not a doctor you can select a good doctor or a lawyer, you can select.
Andrew: So what do you do instead? What did he tell you, Jason Cohen of WPEngine?
Justin: Yeah. Well his advice, well I don’t want to get, well he basically said you don’t. So he didn’t give me advice but that was very valuable because his response was so absolute. I knew not to ask any more questions about how to pursue that path. His advice was do not pursue that path.
Andrew: So what’s the alternate path that you discovered? I don’t want to put words in his mouth either, but you took something away from that.
Justin: Yeah, from our client the alternative path was we’re working with them to start small. To recruit a VP of Engineering, build a small team, start with some small projects and get their feet wet. Rather then recognizing and trying to address the obvious challenge which is the lack of a CTO. So if we bring that back to sales. If you’re not a sales person the last thing you want to do is go and employ a sales person. Someone was saying the other day, you should sell the first thousand. You want to sell the first, you want to make sure you sell the first few yourself, whatever it is that you’re selling. Because that’s where you’re gathering the necessary intelligence of course. Not just to iterate where the product’s concerned but iterate where the design of your sales function’s concerned, the design of the process.
Justin: And as a part of that the one thing that you need to develop an understanding of is, where do sales come from? So let me tell you Andrew, sales do not come from sales people. Sales even if they do come from sales people come from activities performed by sales people. And you need to know what those activities are. On a lot of occasions the activities that are causing sales to occur have very little to do with the sales capabilities of the sales people. So it may well be that sales are emerging from sales peoples appointments, face to face appointments, or their telephone conversations. But you need to understand the specific activities that cause sales to occur. And in most cases once you understand what those activities are you’ll end up discovering that you don’t need sales people to perform them, traditional sales people.
Oftentimes you’ll discover that the critical events that cause sales to occur are very infrequent. So for example it might be one conversation within a long sequence of activities that is the critical one. So to cut a long story short, what most founders are going to discover if there’s direct sales involved, as opposed to just online sales, is that most of the activities that are required to cause a sale are clerical in nature, administrative in nature, and can be performed by an administrative person.
Andrew: They can.
Justin: They can. And if there is a requirement for a critical sales conversation what they’re going to discover in most cases it can be conducted on the telephone. And in most cases there are so few critical sales conversations required in order for the firm to hit its, to perform to plan, that the chief executive can do them himself or herself and still have plenty of time left for the operational responsibilities. So if it’s a company with less than twenty people, in most cases if the sales environment is structured correctly, the sales, the CEO in his or her spare time can easily perform the small number of critical conversations that are required in order to generate the necessary revenue to keep the firm alive. As long as all of the other activities associated with making sales, the generating of sales opportunities, the scheduling of events, dispatch of information, the generation proposals, as long as all that other stuff is taken away and performed by clerical people….
Andrew: And then do you systemize that? Do you sit down and say, what are the steps that it takes for us to close a sale? What have we been doing so far? Let’s create a process for it and check off the things that can be passed off to clerical people. Is that what we do?
Justin: Absolutely, absolutely. So this might be news to your viewers because so many people have talked about it in the past. There’s so many people who talk about, you know, how to use auto responders and how to use AWeber and how to build a. I mean the trick is you want to have the one standard sequence of events for prosecuting every single sales opportunity. And then you want to have multiple feeders into that one simple process. But the one simple process we need to distill it down to what are the key activities? You discover that most of the activities are clerical in nature.
Andrew: I see.
Justin: And there’s one or maybe two critical selling conversations that in most cases they can be done on the telephone.
Andrew: I know that you’re an avid listener of Mixergy and one of the interviews that shaped the way you do business is my, I think the original interview with the founder of SendGrid, who talked about how his business enables emails to get delivered more, ensures delivery. And you switched over to SendGrid as a result of that interview. I did an interview with the CEO, Jim Franklin, afterwards. And I said to him, basically, the company was doing great. It’s one of the big success stories of the tech startup world. Why did they need you? And what he said was, well we’ve got a founder who’s really good at selling. But Isaac can’t do all the sales. I need to create the structure around the way that he sells. And what you’re talking about is what a company his size needs to do, and what they did.
Justin: Now I’m not suggesting, so the advice I’m giving to startups I’m not suggesting it scales infinitely. Obviously you will reach a point where the CEO doesn’t have to sell anymore. But in our organization we haven’t reached that point.
Andrew: You’re still doing the sales, too.
Justin: Yeah, yeah. And it consumes a relatively small percentage of my time. So you will be shocked, your clients will be shocked, listeners I say will be shocked, at how productive a sales person can be even if that sales person is the Chief Executive in the first instance, if you strip away everything other than the critical selling conversations.
Andrew: How do you structure it so that you can circle the critical selling operations and then know what else goes on so you can pass those on to other people?
Justin: Well it’s just a matter of looking at, in most cases it’s pretty obvious. It’s just a matter of sitting down and mapping the workflow, mapping the sequence of activities. I mean, if I look at ours, you know people request that book extract on Linked In. So obviously the pay per click is automated. It’s almost self managing, the pay per click. The landing page, you know, once it’s built it’s up there. The people when they request it they go into AWeber. We had to build the automation piece to link from AWeber into our CRM so those prospects get pumped into the CRM. Once they’re in the CRM I have a executive assistant in Chicago, Charlene, who follows up and schedules, she’ll schedule briefings, so telephone, the Skype conversations.
From that Skype conversation people either request an overview of a paid workshop, an initial workshop, or they don’t. Now if they requests the overview Charlene mail merges the documents and sends the PDF. If they don’t that’s fine, the opportunity is closed. If they, she follows them up to see if they want to proceed. If they do then she goes ahead and does all the scheduling. I don’t have anything to do with it until magically a two day workshop will appear on my calendar at some point in the future. So all I have to do is make sure I’m at the airport on time and go and run the workshop.
Andrew: What about this? When, we kind of have that system here for booking guests. And what I noticed though is you reach out to me after we booked this interview, and actually you and I connected through Maria Sipka [SP], so we had a much difference relationship then I might with other interviewees. But with all interviewees you included, and even someone who I didn’t ever talk to before we get on camera, I feel like at some point or another they want to talk to me. They don’t want to talk to an assistant, they don’t want to talk to someone else. They want just to say, hey, I’m important, I need to talk directly to Andrew. And they are important. And how do I deal with that? How does a sales person deal with someone who says, hey I’m important. You can’t just touch these….
Justin: They can, they can. That’s the whole thing, they can. So in the model that I’m suggesting the CEO or the sales person. I mean ultimately the CEO doesn’t want to be the sales person forever, so they employ a full time sales person and all the sales person does is operate. But what ends up happening is the principal, whether they’re the CEO or the sales person, ends up being much more accessible then they were previously. Because they’re not busy typing in the CRM or writing proposals or adding production, trying to expedite their client’s orders through. They’re actually much more accessible. So yeah, if you’re tired of getting auto responder messages from me or emails from Charlene and you want to send me an email, I’ll probably respond to it. I may well respond to it within the hour because I’m relatively accessible. And the reason I’m accessible is because I’m not sitting there turning the wheels on the system myself. And I suspect that’s why I can send you an email from time to time and get a response back.
Andrew: What about this, Justin? A lot of the process, someone might lay out. I could see myself, let’s not talk about a stranger, I could see myself laying out a process for a sale. Saying, great, this is the part that I’m going to do, here’s another part that I’m going to do. The rest I’m going to pass onto someone else and software and it will all get automated and handled so that I can focus on the important parts. And then something new will come up and I won’t know how to, it won’t have been identified earlier and I won’t know how to handle it and structure is so I’ll just do it. And then another thing comes up and I’ll do it. And then pretty soon I end up doing just as much work as I might have been before. And it’s the assistant and me doing all this work.
Justin: I think to go down this path you have to have a commitment to the end result. So, you know, I, personally I’m far enough down the path that there’s no way that I’m going to go back. You know we don’t have an office here in the U. S. even though we have a bunch of staff. I don’t even run the business. Jason, my partner, is the CEO. I work from home most of the time if I’m not traveling on site in the client’s office. You know the lifestyle that I have is one that I’m not prepared to give up. So if an event occurs like you sending me an email and it’s an anomaly, I’ll respond to the email no problem. But if all of a sudden ten people a day are sending me emails then the system’s broken and I’m going to quickly fix it.
Andrew: I see. Then you sit down and you analyze it and you say, what exactly needs to happen here? How do I adjust my current system?
Justin: Yeah. I’m the chief system builder at ballistics. I love building things. You know a lot of the code that we have I write the prototype applications and give them to other people to build. So, you know, I love discovering that an event is no longer an anomaly, it’s a trend. Because that’s an excuse for me to write some code and automate it.
Andrew: All right, I had mentioned that Maria of Linka (sp) introduced us and I asked her what should I ask you? And here’s what she said. She said that we should be talking about Justin’s methodologies and how they apply to a tech startup that’s ramping up their sales efforts. In the tech world there tends to be, people tend to attend a few events and hope for the best. Tech entrepreneurs typically aren’t great sales people and sales people cost a lot of money. So with that in mind where we just attend events, hope to close some sales there, what do you suggest to someone who is in that situation?
Justin: Well we talked a little bit already about the sales part. Don’t employ a sales person, be the sale person yourself but structure the environment such that being the sales person means having a few critical conversations a week. That’s the sales part. Now that of course presupposes that you have a steady flow of sales opportunities. Now if you don’t have a steady flow of sales opportunities there’s one of two reasons for that. One is that your product has lousy fundamentals. Or the other is that you haven’t gotten around to building a promotional machine yet. And if you don’t know which it is the best way to find out is to go ahead and build a promotional machine. And if you’re successful in building the promotional machine your products fundamentals are probably okay. At least you know they’re not fundamentally flawed. So don’t build, don’t add sales capacity until you have generated the raw material for sales people or for the sales capacity to prosecute.
In other words, if you don’t have the 15,000 sales opportunities that I was referencing we had back in the old days, you don’t have a requirement for a whole bunch of sales people. Sales people do not generate sales opportunities. Sales people prosecute them. So the first, once you’ve gotten your head around the idea that you don’t need sales people then you need to take all your focus and apply it to building a machine that generates sales opportunities. And then in the future if you’re adding sales people you should only be adding those sales people that are absolutely required to service the inflow of sales opportunities. Do not ever be adding sales people expecting that sales people will create sales because they don’t.
Andrew: All right, I mentioned, and this came right out of the emails you and I exchanged before this interview in preparation for our conversation. You said that one thing we should talk about is how you sell $90,000 annual contracts over Skype. So how do you do it?
Justin: Well, you know, that was the process that I was describing before. And the funny thing was that when I was in Australia I used to travel around and do lots of appointments with people. And, because I could. And when I first moved here to the U. S. I replicated the same behavior. The only difference is Australia is the same size as the U. S. but in the U. S. people live all over the place. In Australia we have a big desert in the middle and no one lives there. So it means that when you’re traveling all over the country in Australia it’s relatively short distances. In the U. S. you’re flying for hours and hours. So when I first got to the states I was doing appointments all over the country, well not Alaska but everywhere else including Canada and even Latin America. So I was flying constantly. I’d leave home on Sunday night and I’d get home at midnight on Friday night every single week for probably two years.
And then I started to do more conference calls. And I ended up discovering there was no requirement whatsoever to go and do face to face appointments. So I do none, absolutely no face to face appointments today, never. And the same applies to Australia. I’ve discovered there’s no requirement to do them their either. Even though we’re selling engagements that are very critical, so it’s certainly a complex sale, there’s no requirement to do face to face appointments. The only time I go on-site with a client is if they pay me to go and run a one day workshop or a two day workshop more commonly, or if I’m doing a handover to one of our consultants because we’ve brought on a new engagement. So there’s no requirement, and I made the claim before about the fact that you don’t need field sales people. In many cases startups need to understand that they just don’t need field sales people.
Andrew: Where do you get your prospects who end up spending $90,000 on annual contracts and are sold that package over Skype. Where does the top of your funnel get fed?
Andrew: It’s the book that you have. So someone will hear something like this and say, oh Andrew mentioned a book, I should go and read this book. They read the book they say, hey, what you said spoke to me and then they connect with you. And then eventually they go through your funnel of buying.
Justin: Most of it’s linked in to be honest. And this is for those in your audience who are selling B to B. I absolutely love pay per click on Linked In.
Andrew: Pay per click on Linked In.
Justin: We have other promotional mediums that work. But pay per click on Linked In works so well that we don’t even bother with the others most of the time because we don’t have enough capacity left. So you know, we run pay per click ads on Linked In. We give away copies of the book and we give away about 50 a week on average, and that keeps the funnel full. In fact I think we have about 200 people in our system that Charlene hasn’t had the capacity to approach right now. So we’re choking it back all the time because, so it’s amazing, I love Linked In.
Andrew: You know what, Justin? I realize when I gave my intro or at some point earlier on I saw some reaction in your face and I thought, I know I made a mistake. Well it seems like I did, maybe I didn’t. Did I pronounce his name right? Yeah of course I did because I listened to his You Tube video over and over to make sure I pronounce his last name. That’s the way it is, same thing with his company name. So I didn’t screw that up, I kept going. What I didn’t realize was, I called it, I said it was the upcoming book and I didn’t realize the book was already out there.
Justin: No it’s not, no it’s not. I’m still two chapters away or one and a half chapters away from finishing it.
Andrew: Okay, good. So it is free except for those two chapters.
Justin: So this is….
Andrew: But do you mind holding it up?
Justin: If you look at skinny it’s an excerpt. So this is the first, so in the process of writing it I took the first three chapters and so we were giving away, and this is a tip for those people who are writing books, we were giving away white papers while I was writing the book. And then I realized that, well, the content in the book was much better then the white papers and the other stuff that we had so I took the first three chapters and turned them into a mini book. An excerpt from the upcoming book. And the great thing is that we’ve got thousands of people now in our database who’ve been sent the first three chapters and who presumably are waiting for the book to be finished.
Andrew: Ah, okay.
Justin: So the thing is, there’s no better offer, not so much if you’re on online, if you’re operating completely online but if you have offline operations and it makes sense to follow people up and have telephone conversations with people. There’s no better offer than a book. You know, why pay for some reports that just don’t work as well. But the great thing is it doesn’t have to be a whole book. It only has to be the first three chapters of the book.
Andrew: And then I imagine that it created some kind of pressure on you to write the rest of the book because you know that people are watching.
Andrew: All right. There’s one other thing that I didn’t cover that I think I mentioned that we were going to cover which is tech and consulting services. You don’t just sell consulting services, you also sell tech. What software are you selling? What technology are you selling? And then why do you sell both instead of just focusing on one or the other?
Justin: So the consulting that we sell is really a combination of implementation and coaching. So I’ve been working hard for years to try and systemize consulting so that consulting doesn’t mean me in a room waxing lyrical. So we employ smart young people with some business experience, recruiting or training experience and we give them a system that they implement. It’s a package system. So it’s almost like our consultants are like the type of implementation people who would work on an Oracle implementation except for us system means a lot more than software. So we are in an organization building and maintaining a system. It’s people and process and technology and sales.
We have all of our clients have CRM of course and we built a management information system that plugs into the back of the CRM and provides the reporting structure and specific way for running sales meetings. So that’s the technology piece.
Andrew: I see. All right.
Let me do a quick plug for Mixergy Premium. In fact, actually, why don’t I just trust instead of me doing it I’ll ask you? You wrote a blog post about a year ago about Mixergy. As an entrepreneur, someone who’s been in business for so long, what do you get out of Mixergy?
Justin: Well, I told you a story when we first started talking. I discovered Mixergy when I was reading something and somebody mentioned it and I went and looked it up and to me it was like, I guess I was skeptical. What’s the quality of these interviews like and I probably listened to one interview and I was shocked by the in-depth nature and by your intellect and how business savvy you are. You know, for me that was shocking because I’m so used to hearing journalists who have this twisted view of what business is in attempting to interview business people.
So I was shocked by the caliber of the guests and the caliber of the interviewer so I went to put it on my phone at the time and downloaded every single interview that I possible could. And as I told you, I was on a flight and on this particular flight I listened to Mixergy, a [??]flight from Australia back to the U. S. I listened to Mixergy from wheels up to wheels down.
So I don’t know how many interviews it was but I didn’t sleep a wink. Interview after interview after interview. And other guests have said this, but I think that if you’re an entrepreneur sometimes it’s like being a thirsty person in the desert and coming across an oasis. It’s invaluable. I joined Mixergy Premium a while ago and I’ve listened to a couple of the courses and I haven’t exploited it as much as I could and certainly as time goes on. But yes, it’s invaluable. You can’t get this stuff anywhere else. And you ask the questions that need to be asked. Everybody else glosses over those questions.
Andrew: So here’s the question that needs to be asked about this. What I really should be doing is saying hey, this is my time to sell Mixergy Premium. I should keep telling people to go to MixergyPremium.com and I should absolutely hype up the courses which are the only things that you can get within Mixergy Premium and not anywhere else. And so I’ve got to sell that. But instead of selling it, I rather learn and so when you said I’m not fully utilizing the courses, I’ve got to ask you, what is it about the courses that is not drawing you in and you could be open and honest and if you say Hey, I listened to one and it sucks, I’m comfortable with that. What I’m not comfortable with is no answer, no insight.
Justin: Well, it’s a technical reason. I use one of the, what do they call them? The feed patches on my Android. I forget which one it is but it automatically downloads the episodes.
Andrew: And there’s no way to do that with the Premium, you’re saying.
Justin: Yes. So whenever I get in my car, I’ll set navigation and then I’ll click on the next interview. If there isn’t an interview there, then I end up clicking over and listening to TWIT.
Andrew: This week in time.
Justin: Yeah. Or one of the other podcasts. If there was somehow a way that all the courses could be there also as another feed, then I would listen to them. Really, the only reason I haven’t listened to more courses is because it requires for me to actually go and manually load them into my phone.
Andrew: That’s a good point. The guy that makes the software that use to create, the premium section on Mixergy is a good friend. I’ve got to talk to him about how we can do that. That’s really helpful. I appreciate you saying that.
Justin: Maybe, create an app.
Andrew: I was thinking of creating an app too. I just feel like there is so much else we need to do and maybe an app is a whole other project.
Justin: I would create an app and set it up so that the app for the courses works exactly the same as a feed catcher for the content.
Justin: Then you could give away a course. Let someone experience a course. Or, give away a subscription, or whatever the case is. Probably not even necessary, but I think if somebody has the app on their phone… Sometimes I’ll go back and watch the video because I want to see, “What does this person really look like?” or I want to read the comments.
Andrew: You’re saying you should just have access to it on your phone?
Justin: In fact, yesterday I ran out of Mixergy, so I was watching Kevin Rose – The Foundation. I watched his interview with Elon Musk.
Andrew: What did you think?
Justin: Oh, incredible. I’m a huge fan of Elon Musk. He is a modern day Howard Roark.
Andrew: Yeah. [laughs] Good analogy.
Justin: Production values have gone through the roof. The great thing about that is I just have to click play in the feed reader and there was a video on my dash as I’m driving home from the airport.
Andrew: While you’re driving your watching video?
Justin: I’m not supposed to, but I was on the 405. It stops [???].
Andrew: Well you’re not really driving. Oh, I miss L.A. Mixergypremium.com, I should say, where people can go watch hundreds of interviews and almost a hundred courses, right now, taught by real entrepreneurs. As you can see, there is one issue with it. We need to find a way to make it easier for you guys to grab it on your phone. Of course, if you could just navigate to it with your browser, you have full access to all the courses and interviews on mixergypremium.com. Final question is, if people want that book, that I didn’t know existed in physical form, can they get it in physical form? How do they access it?
Justin: Just go to fourappointmentsaday.com. People can request it. They get it in their post free. Fourappointmentsaday.com
Andrew: Fourappointmentsaday.com and it’s right there, they don’t even have to click the subscribe button at the top? I remember doing that on one of the sites.
Justin: No. That’s just a landing page. If they go to fourappointmensaday.com they can fill in a form on the spot. They’ll get sent the book a few days later. That’ll right them through to my blog as well where, if they want to, they can sit and read all the chapters online.
Andrew: Which is what I did, actually. I sat and I read it using EverNote. I forget what their plug-in is where I can highlight. Whenever I highlight, it automatically saves my highlights into EverNote. Now I have a whole list of chapters from you in my EverNote and highlights and notes on it. I wish every guest who I had on had a book so that I can do deep research without having to spend too much time on the phone. I want to do background search and not take up your time as I do it. Anyways, thank you for doing this interview. I hope you’ll come back. I felt like I learned a lot from this interview and also from your book. Maybe we can have you back on in the future just to explain the process in more depth. No side conversation about ballet dancing. I won’t pull people into conversations about Mixergy premium. I just want to know how this works in more depth. I hope you’ll come back and do it, but until then people can check out your website. It’s fourappointmentsaday.com or, I went to salesprocessengineering.net. The website for your business is ballistix.com. I’m actually giving too many URLs. Lets just say fourappointmentsaday.com is where we leave it. Thank you for doing this interview.
Justin: Thank you, Andrew.
Andrew: Thank you all for a being a part of it. Bye.