Armando (0:00 – 1:02)
I’m Armando Roman, host of the Founders Guidepost. You’ve built your business over decades, and now it’s time to think about that once-in-a-lifetime exit. You’ve come to the right place.
Here, you will hear business exit professionals talk about what you should know before exit. Besides hosting the Founders Guidepost, I’m CEO and founder of Axiom Founders Family Office, a Scottsdale wealth management firm helping founders and their families preserve their American success story. We oversee and coordinate a network of vetted professional advisors to help maximize their probability of achieving everything that is most important to you.
And we host the Scottsdale Founders Forum, a bi-annual live event for the founder considering exiting in the next 36 months. Here’s to your hard work and your American success story. Enjoy.
Hi, Armando Roman with the Founders Guidepost, and today with Tony Wydenski of RevUp Sales. Tony, how are you?
Tony (1:03 – 1:05)
Great, Armando. Thanks again for having me.
Armando (1:05 – 1:49)
I really appreciate it. Sure, sure. So you’re a sales trainer, coach, and a sales consultant.
And as we talked before, you had a lot of just useful insight on what companies can do in terms of those companies trying to increase their sales. Our audience is typically the business owner who is thinking of that exit. And often before they have that once-in-a-lifetime business exit, they want to make the company as pretty as possible, as valuable as possible.
And they’ve got to do some homework sometimes three to five years ahead of that exit. So Tony, maybe you could talk about your expertise and what you do. And then let’s have a conversation that can help that business owner if they’re thinking of increasing that top-line revenue.
Tony (1:50 – 3:56)
Awesome. Yes. Happy to help.
So my background is in sales, sales leadership, sales enablement. And I’ve really worked at or with companies of all different sizes, from companies with, call it 30 or fewer employees, to organizations of over 500-plus employees. And my experience started as an individual contributor, but as it morphed into more sales leadership and sales management, I quickly started to realize the power of data and analytics to not only help me be a better sales rep, selling to customers, but also moving into management and leadership, the importance of data, data quality, and tracking the right metrics, really to be able to understand what levers need to be pulled to help improve sales. Whether that is when to hire more reps, whether that is understanding where we’re doing well in certain markets and not, and even understanding where are our most highest profitable leads coming from. I realized that data really drives a lot of decisions and it really needs to be the foundation on any kind of growth or sales scaling plans.
And many companies feel like maybe they are tracking the right metrics or they do have the right data, but they don’t really take the time to understand if they’re measuring the right information, if they’re even doing it in the right way. And so this really is where RevUp Sales was born from. It’s from thinking of the sales process and sales operations as the foundation.
You can’t fly the plane unless the two wings are attached and the engine is working. You can’t take off unless the plane is intact first. So that’s how I think of helping companies as a baseline with RevUp Sales and really helping through their sales process.
Armando (3:57 – 4:31)
Okay. So Tony, a question for you. When a company, say, has been around for 30 years, things can get to a place where they’re steady Eddie and it’s just crunching along.
And that might be fine when the business owner is just wanting to maintain what they have. But if they’re in the mindset of taking what they have, they’ve done it the same way, they’ve got a good customer client base, good product sales, et cetera, and it all feels kind of good. If they said, Tony, come talk with us and tell us what you think, what would that look like to them as you begin those conversations?
Tony (4:32 – 10:18)
Yeah. I would first start with saying, especially nowadays, many companies are feeling the pressure and stress that truly acquiring new customers is getting harder. It doesn’t really matter what industry.
Acquiring brand new customers is getting harder because we’ve developed more of a resistance to change. And we’ve seen a lot happen in the last five years, just as an economy, as people. And this has created a higher level of resistance of change.
The good news for established businesses who do have a really solid customer base, who are producing predictable revenue from that customer base, is you have that to your somewhat advantage. You understand that this lift, how hard change is for your own customers, meaning they’re not going to necessarily jump ship if they’ve been working with you for a long time. That is assuming that you are doing a great job of making sure that you stay on top of why they should be buying from you versus somebody else, and that you’re treating that customer experience really to the highest level that you can.
However, when it does come to think about, okay, we’re really happy with this solid customer base, but we do want to be able to grow five or 10%. The number one question that business owners will tend to ask is how we should do it. And a very common answer is, okay, let’s just go hire more salespeople, and they will help us sell more.
And that really couldn’t be farther from the truth, especially now. What really needs to happen is a clear and really deliberate analysis, we’ll call it audit, on the current sales environment. And what I mean by that is from your current customer base, why are they great customers?
Why are they buying from us? And this is not because of the physical products that we’re delivering. This is not about the services that we’re offering.
They continue to buy from us because as an organization, we are delivering certain value. We’re delivering certain things that solve problems for them that they can’t solve on their own and that they can’t solve by going with somebody else. And so when we think about growing sales, we need to take all of that knowledge that’s been in our head for 10, 20, 30 years on the problems we solve for and now need to go get people who have maybe never worked with us.
They don’t know who we are. They don’t know what we sell. They don’t know what makes us different than the competitor down the street who may look very, very similar.
And so it’s that motion where we’re trying to take all the knowledge that’s been in that organization and now institutionalize it, document it, put into messaging to help go acquire new customers. So there’s that whole piece, which in and of itself is a major undertaking. The second piece is really around assessing.
I know I can’t grow sales by just doing what I’m doing today. So there is a general understanding that I’m going to have to invest somewhere and get a return on that level of sales. And this is where data and analytics become very, very critical.
And so it’s critical for companies to really first get a sense on certain key metrics that can inform the decision making. Some common metrics that I would recommend is certainly customer acquisition cost. So anytime you go out and try to get a new customer, there is a cost associated with that all the way from the very beginning, which starts with marketing costs, to the time it takes to acquire a customer, to the sales salaries and commissions that you’re paying to close that sale, and then the ongoing costs to support that customer and continue to deliver that product.
So as I go and I want to grow sales, I first need to have a baseline understanding of what it’s going to cost me to go do that. And I establish that through what I know from what it’s taken me to acquire and get to where I am today. So I’ve established this customer acquisition costs of $1,000.
I know that every new customer I’m going to acquire is going to cost me $1,000. Now I could start to create a plan on where do I get my return on that, right? So if it’s going to cost me $1,000, I want this customer to be generating 10x, let’s say.
I want them to generate $10,000 for me in the first year. And so now that I have an understanding of what I need from the customer, that is my baseline to start to understand how I might be able to go acquire them. And then going to acquire them really comes down to understanding what are the key markets that I can be acquiring them for.
And again, we need data for that. We need data to understand what markets or what customer profiles are ideal or even perfect customer profile where we are confident in that customer acquisition costs versus maybe more emerging areas where we know there might be a higher cost associated with that. And that’s really our baseline to start to understand how we’re going to go about and acquire customers.
Now I have another probably five to 10 minutes and more metrics to talk about. But Armando, am I on track so far? Absolutely.
Armando (10:20 – 11:18)
It sounds like when you talk about data and understanding data, you’re looking at data. You want to see data internally generated, but then also data in the market. What is the market size and what is our market share, the company’s market share?
And then like you said, understanding what are the costs to acquire maybe in an emerging market. So no, what you’re saying sounds great. Metrics and data are so critical.
And for a company that maybe has built a successful business over years trying different things and now is in some kind of a comfort zone, that may be great while that business is there. But when they begin to think about that exit and transitioning that company to a new owner, it sounds to me like what you’re describing are metrics and data that that new owner would want to see so that they can see a process. And if they have to add new salespeople or replace salespeople, then those metrics will help them make better informed decisions.
Tony (11:19 – 15:32)
Yeah, spot on. Because as we go to think about really how we’re going to expand, that really comes from the expertise of the business and the market that they’ve been successful in. What are similar companies or customers or industries that look and smell very similar?
That’s naturally a path that comes from the business owner as they think about expansion. But where things start to get very uncertain is, OK, I know that this market looks very similar. We’re going to copy paste from what we did before.
And we think we can grow this by 10 percent or 20 percent or we think we can achieve this much of the overall market that we’ve established, when in reality, the execution of that becomes very difficult. And that is where a deeper understanding of your sales process and where you’ve gotten to today becomes extra critical. So I’ll throw out a few more key things here is as you think about your sales process, really leaders really should have a really good grasp on what are their current conversion rates.
And people get this incorrect all the time, meaning out of all the opportunities that that I’ve encountered over the last year, over the last quarter, whatever it might be, how well am I able to generate new sales from that? So it’s typically a percentage anywhere from, well, conversion rates are actually going down. So what used to be an average conversion rate of, say, 35 percent is now trending down closer to 25 percent.
To take that a step further, if you are selling different products, different solutions, you’re selling it to vastly different industries. You may see different conversion rates across those product sets or across those industries. And it’s super critical for the business owner to understand what those are in the various industries, in the various product segments, because guess what?
As I think about going to expand, I either know I need to improve certain conversion rates to do that, or I’m going to go invest in the markets or the segments or the products that have the higher conversion rate. I can’t do that unless I have a clear sense of what that is. And so if I have the conversion rate, if I understand what my customer acquisition cost is, now I can start to create a top of funnel budget that I’m going to have to invest in to produce those results.
And so when we think about top of funnel budget, this is where it opens up a whole other suitcase, if you will, of different metrics and things to look at, such as how much do I invest in marketing to produce the lead, to produce the meeting, to produce the potential pipeline. So all of those steps along the way are critical for this business owner to really get a grasp of how much they should be investing in sales, where, and then ultimately what to expect out of it. I think one common pitfall is to essentially say, okay, if I invest $100,000 in a new rep or a marketing company, I expect to just get that money back in the first year and then everything after that is potentially profit or profitability, et cetera.
And without having the specifics and the deliberate reasons to invest in certain areas or not, we get to the end of that year and people are scratching their heads like, what went wrong? What happened? And so it’s super critical to really, especially today where buyers are more educated than ever.
Buyers are doing most of their buying process before they even talk to you. It’s even more critical that when you do get that buyer engaged, that there are less hiccups and there’s more data around why we think we’re going to win a deal or not.
Armando (15:33 – 15:58)
Sounds like it’s easier to go hire two new salespeople, which I know is not what you should do. So I wonder then as your data, as you said, is just so critical in understanding, when you typically meet a new client and start working with them, do they have that data or are you helping them to capture that data in their systems?
Tony (16:00 – 19:36)
Yeah, I would say it’s both. So to some extent, many clients that I first engaged with, and really that’s really the first step of anything here is like a full audit and understanding of what do we know today, what do we don’t know today? And that’s really the baseline.
But I would say companies are on a spectrum in terms of their sophistication around this and really for no reason other than this is not their expertise, especially somebody who’s had a business that’s been running and humming, they’re just not as concerned about sales operations and data. Things have been working just fine as is. But in reality, once we typically sit down and talk, there is usually some general knowledge around how well we win deals, what’s the general sense of our conversion rate, what’s the general sense of our average sales cycle, what’s the general sense of our average sale price or our average deal size.
Those are pretty commonly known. But once I start to engage with them, it becomes pretty clear that not that that data is incorrect, but it’s skewed. It does not really go into the fact, the matter of conversion rates, why there are certain ways in certain product lines or certain markets versus others and understanding why that is.
There is a lot of confusion around sales cycle and how long it really takes to make a sale. Everybody seems to have their own definition on a sales cycle. I talked to one company who said, oh yeah, our sales cycle is 14 days.
I said, what do you mean? Well, yeah, after we send them the quote, it comes in 14 days later. And I’m like, well, okay.
So that’s your definition of a sales cycle, which is not correct. And then others calculate sales cycle from the time that their sales rep got engaged. Others calculated from the first marketing message that went out to them or the first form that they filled out on the website.
And so it’s really critical to align to what is the proper sales cycle, because when we go to invest in growth in the company, it’s important to know that so we know what kind of results to expect based on what we’re putting in. And so, again, to summarize your question there, there tends to be some general knowledge, but once you dive in, it’s like, yeah, we can get better at what we’re doing and really give us more visibility into our business to help us make decisions. And I think that’s the major thing that really I want to bring to the organization is visibility.
And the reason why visibility is important is because it helps make better informed decisions on what to do with the business, how to grow, where to grow, et cetera. And all that needs to be part of the conversation. As you think about, can I scale with the current team?
Can I make things more efficient? Can I shift their focus? Maybe I don’t need to hire new sales reps to grow 10%.
Or yes, I do want to, I do believe based on the data and what we’ve established that if I go hire a new sales rep or two, I can grow by this much, but we’re going to have them focus on these set accounts or in this market or in this vertical. And so, you know, all the data needs to inform the intent around the growth.
Armando (19:36 – 19:55)
And so, Tony, where is this data coming from? I think about social media outreach, you know, advertising, internal financial data that you capture. There’s so many places where data can come from.
Where are you thinking when you talk about data and metrics, where is the data coming from?
Tony (19:56 – 23:26)
Yeah, it’s coming from multiple sources. And, you know, this is where, you know, seeking the help of an outsider is really where the value is. I don’t expect a business owner who’s wearing many, many hats to really have this level of knowledge and details on bringing all these data sources together and really being able to establish, you know, the right metrics based on their industry, based on their company, et cetera.
But really, when we think about data, data, you know, I’ll probably just say high level on three major areas. First one is marketing and sources for where the marketing data comes from can be, you know, various depending on if there is a marketing tool in place today, maybe an email marketing tool, such as a MailChimp or a HubSpot or Marketo or any other system in place that would send out marketing to even an outside agency. Many companies will leverage an outside marketing agency to handle all that for them.
You know, perhaps that agency has some type of system that they use to track, you know, the value that they’re adding through spend, lead generation, et cetera. So let’s just say the data comes from a marketing channel. There is some type of sales data, you know, typically found in a CRM.
And then there’s some other type of customer implementation or customer success data that comes in from another channel. Now, ideally, in a perfect world, all this data flows into a single source, preferably the CRM, because CRM by definition is customer relationship management. And so all of those things from marketing to sales to customer success, that all has the word customer in it.
That’s all your relationship with the customer. And so I’m laughing. You’re laughing because we know that that’s not what happens today.
But the vision of the CRM when it first came out, it still holds true. Like that’s the goal of it. So the more we can get the data in to a single system, the more you can have access to understanding your customers and the better you can make decisions for your customers.
But high level, I know there’s different nuances for different businesses and industries and certain data that’s more critical. To generalize, you have your marketing data, you have your sales data, and you have your customer support slash success information about your customer. However, as you really want to be able to dive into all three of those things, for example, on the marketing side, you know, part of the things that business owners will want to understand is the attribution of their marketing efforts.
So they may hear their marketing agency talk about attribution. What that means is an analysis of which lead generation channels are producing the best results. So if my best results, if I have a higher attribution from Facebook ads versus Instagram ad, I should probably double down on Facebook ads versus Instagram ads.
So that level of information is part of that marketing stack. Sales data, we talked a little bit about conversion rates, sales cycles, even down to the rep level, even down to, like I said, industry or segment level, product level, all that’s super critical. And then customer data is really around making sure that you’re servicing your customer in the best way you possibly can, not only for retention, but for expansion opportunities.
Armando (23:30 – 23:51)
So it sounds like there’s a lot, you know, a lot involved in getting that data understanding. You’ve mentioned a couple of times of understanding the customer. Why are they buying?
And how are you helping to figure that out or helping them figure out why is that customer buying?
Tony (23:52 – 27:52)
Yeah. So once we get a good baseline understanding, you know, our sales information, our sales motion, our sales data, we understand what we can expect out of our sales engine. Now it’s up to our sales team or our commercial team to go execute and deliver on that plan.
At the end of the day, we all want to see improvements in those baseline metrics and in those baseline statistics, for example, conversion rate. Globally speaking, I did a little bit of research on this across no matter what you sell, it’s greater than 65% of the time. We lose the deal.
We don’t sign a new customer. We lose to the status quo. So we lose to them not doing anything, meaning we’ve given them no incentive to change from what they’re doing today.
And so with this in mind, with most of our deals being lost to a status quo, that helps create a plan for us and how we want to engage with customers. And so this is where the second piece of really accelerating sales is around skill development. And I mentioned early in the conversation how things have changed in the last five years.
Our sales teams have not kept up with the way that buyers buy today. We are still very focused on the transaction. We are still very focused on product features and functionality.
When in reality today, buyers buy to really fix things that they can’t fix on their own. So in order to get them to move from the status quo, the skills of our salespeople need to shift to really help the buyer understand why they should buy now and why they should buy my product or solution versus someone else’s. And so there’s a lot that we can do to upskill our sales teams.
And really, when we think back to the metrics, when we work to upskill the sales team, that impacts the metric. That impacts our conversion rate metric. So now we can start to track, hey, if I invest $10,000, let’s say, in training or upskilling or whatever it is to the sales team, I can now start to measure the impact of that.
If our conversion rate was 30% and over the next three to six months, that goes to 35% or 40%, I now have a metric that I’ve been able to associate to my investment in, let’s say, sales training or upskilling or whatever it might be. But if I don’t have that level of insight and just spend money on training or whatever, I say, go do this. Now I have no way to really measure how effective that really was in really hard dollars that I care about.
And so what’s really interesting about this is the more we can think about shifting our conversation away from us and our company and what we sell actually helps us build more credibility with the buyer. And it helps them make that final 20 to 15% of their decision a lot more easier to work with us than not. So with all the data that’s out there on the internet, all of the reviews that they can go look at, all of the things that they can research on their own about our company and our product, they’re pretty far along in terms of like, am I going to work with this company or not?
And so our salespeople actually have a much shorter window to wow this customer than they did even just five or 10 years ago. Let’s say five or 10 years ago, they had a much wider window when maybe prospect couldn’t get all that or didn’t have all that information. Now they do.
And that short window that reps get needs to be very, very impactful in order for us to create predictable sales.
[Speaker 3] (27:52 – 27:53)
Hmm.
Armando (27:54 – 28:36)
Wow. So you said a lot and I’m just very glad to hear what you’re talking about. But it sounds very methodical, it makes sense, getting data to drive decision making and decide where the dollars are really focused to help grow the business.
You talked about a few things, marketing, sales and customer service and success. I wonder as you’re going through and helping that company or management or owner understand what they should be doing, how much of that comes to existing customers and why they bought, are there customer surveys that you do as part of that? Or is that not as significant?
Tony (28:38 – 29:15)
Yeah, I think one jumping off point, if you’re really kind of unsure, if you’re really in the sense of, you know what? Yeah, we have had these customers for a long time or and I’m not really sure why they work with us or why they chose us. It sounds awkward, but it would be great to just casual conversation with them.
Hey, we really appreciate you being a customer. We’re a business just like you. We want to grow and expand.
So we’re just we’re just serving people like, why did you decide to work with us? Like, we have these cool products or services, but like, why did you buy? Like, what was it?
Armando (29:15 – 29:33)
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Tony (29:34 – 34:02)
And, you know, I think you’ll start to hear some very interesting stories. And you may hear you may hear the key things that you’re looking for in a brand new sale. So you may hear things that are not related to your product or service.
You may hear things that are not about the cool features that you that you offer, the cool products you offer. You may hear things like, oh, yeah, we were really losing our customers because we couldn’t respond to them fast enough on our support tickets. And I’m selling them support software, right?
They’re telling you higher level things about their business problems and why they bought. Now you can institutionalize that, make it part of your messaging when you go to the market to go acquire new customers. And this also helps inform your decision around my sales strategy, right?
If I’ve determined that my customer acquisition cost is really, really, really high. And I don’t know if I want to make that bet yet because it is a big bet because we would have to go into new industries. Maybe I’m better served trying to upscale my or upsell upsell my current customers.
And what does that look like? What would I have to understand from a sales process to do that? And so, you know, that’s going back to why the data plus the skill development together is really critical.
And I started with the data because I feel like we need clear data to really understand the skill development is helping. So if you notice, I didn’t necessarily jump to training and skill development right away because as I work with companies, I would want to be very confident that I’m able to measure the impact of the skill development and the training with a clear understanding on the metrics today. And so maybe I’ll share a couple quick examples here.
So I was working with a manufacturing company and for the most part, each of their sales, yeah, they sell like standard things, but essentially each sale is a little bit different. Specs need to be changed slightly for the customer, etc. And in terms of the business owner, they were doing fine.
Their profitability was high enough. They were growing at the clip that they wanted to, but they really wanted to accelerate growth. Sure, 5-10% was fine, but they’re like, what’s it going to take for us to do 20?
How can we do 20? And from an infrastructure perspective, like an internal production perspective, they thought they could support 20%. So now they’re looking to sales.
So how am I going to, what do I need to do from a sales perspective to do this? And he had some data around sales cycle and conversion rates. And as I started working with them, I realized that it wasn’t incorrect, but it was way too generalized.
And what he had wanted to do was just go out and hire a bunch of sales reps to help grow. Like go hire one in this state, go hire one in that state, just let them hit the ground and start selling. When we dug into their data, we found how vastly different their conversion rates are.
So from customers who had bought from them before, they had a 40% conversion rate. So if they get 10 deals, they have a pretty good sense that they can win four of them. However, when they look to brand new customers who had not bought from them before, their conversion rate was 10%.
And so it’s very different. And if I take the average of that, if I say my conversion rate’s about 25 or 30%, you can see how that starts to create very different results when you go out and hire five new salespeople and expect them to convert at 30% when in reality you’ve only been converting at 10%. Same thing for sales cycle.
He thought that the average sales cycle was about 20 days. And as we dug in a little bit, we determined the average sales cycle is more like 45 days because they were looking at a certain deal that in a certain market or certain type of deal actually takes longer. So they were eliminating those from the conversation, but you can start to see how this generalization and staying very high level really can create some problems if you’re using that to make decisions to hire and grow and invest in sales.
Armando (34:04 – 34:47)
Well, I like the approach because it can, we’re having data, having data, having metrics, of course, it’s hard to argue with numbers. And when you’re using their data, their existing data for conversion, for sales lead cycle, et cetera, using their own data to establish that baseline, then it makes it easy to see, well, we’ve been doing this now for six months, what’s it look like? And so I guess my question to you when they go through that process with you, I guess it depends on the sales cycle.
When should they expect to start to see some results? Is it 30 days, three months, six months? What does that look like for them?
Tony (34:49 – 36:41)
Yeah. So I think there’s a couple kind of two general things. And the answer that I’m sure a lot of people would always say is it depends, but I think there’s two things that hold true with a good understanding of data and metrics and what is truly happening in the sales process.
First and foremost, you could start to measure it. You could start to measure improvement as soon as possible. And so you have to have that clear baseline.
If you stay too high level and you have that example of the generalized 30% instead of understanding there’s 40 and there’s 10%, if you stay too general, it becomes much harder to actually track improvement. So with the proper baseline, if we think about adding efficiencies through understanding the data, there’s going to be opportunities to find ways to improve the sales process and hence get a little bit of a boost in sales pretty quickly, call it two to three months. And the same goes for the skill development, call it another two to three months.
So as we understand where our team’s at, what this also does with the clear understanding on the data, it allows us to pinpoint the proper skill development that’s needed with the team. We understand where deals are falling off. We understand in which markets now we can provide specific targeted training and coaching to help give our team the biggest lift right away.
So this is not like a transformative process on everything you guys have been doing is broken or doesn’t work. It’s how do we move the needle right now, slowly every month, little by little by the skill development of our reps. In order to do that, we use the data to pinpoint where are we going to get the biggest bang for our buck.
Armando (36:42 – 37:50)
Yeah. And I like that you pointed out, Tony, in the example you were using that the company you were talking about, they had capacity. They could fill it.
Adding to that top line would bring more customers in, but they already had built the engine. The company was there. The people were there.
Facilities were there. They could service more customers and do more sales because they already had that built. So it’s pretty easy to see that if they can simply, not simply, if they can increase that top line in revenues and sales, that that goes very quickly to the bottom line, to the profitability.
And when a company is going through a sale, often that sale is based on EBITDA, which is less profit. And it’s a multiple, a number of times that profit times that EBITDA, which gets them the sales price. So for a company like the one you described, who already has all the capacity there, but they just need more customers, you can very, very directly have an impact on that sales number they’ll be looking at when that time comes.
Tony (37:51 – 38:57)
Yeah. And to play this out, as the data became more evident, what it really meant was they naturally were actually already spending a lot of time with existing accounts versus brand new accounts. And so this actually, it influenced the team structure, right?
And so they shifted some people who were primarily working with existing accounts who kind of really got in the weeds on like why people buy, why they don’t. And they moved that into a brand new new business role, which could have a bigger initial lift than if they were to hire somebody brand new into the company, get them onboarded up to speed. So the data also helps us understand like from a talent perspective or a team structure perspective, alternative ways that we might think about accelerating sales aside from just going and hiring new salespeople.
Armando (38:59 – 39:16)
So when you’re going through this process with a business owner and say the management team or executive team, what are some of the big ahas that they say? We never knew that. Tony, it’s been in front of our face.
We didn’t know that. What are some of those that you hear?
Tony (39:18 – 41:34)
Yeah. I think the first one is just as I start to ask about certain things around their sales and metrics and numbers, they tend to be able to speak pretty high level but then tend to go blank once I start to dive in and ask very specific questions related to their markets or product or types of customers, et cetera. And then it’s not a conversation to make them feel bad or that they’re not doing the right thing, but it’s meant to highlight the fact on why this might be important to know and why it’s critical to know.
And so I tend to share a couple examples like I did just now with why it’s important and why it’s critical for them to know that if they do want to grow and scale. The other kind of aha moment is the realization that there is a knowledge transfer that is lost between the business owner and the salesperson. And what I mean by that is the business owner, especially the one who’s been in business for a long time, they know their industry and product in and out.
They’ve just had so much knowledge on things that what I’ll call just come naturally to them, come naturally to why the buyers buy, come naturally to why they buy from business problems and not product and features. And so they just have all this experience and knowledge, but the transfer of that to other folks in the organization or the transfer of that to the sales team is just not there. And it’s not by anyone’s fault.
It’s just that there isn’t a deliberate mechanism or vehicle to be able to do that and really take all this knowledge that’s been built over time and ensure that the sales team is carrying that forward and ensuring the sales team is able to deliver the exact same message. And that’s where that skill development comes in. And it’s around how do we develop the right types of skills and habits with the sales team so that they can carry that message forward that’s in the head of the owner or the president for so many years.
Armando (41:34 – 41:46)
And Tony, how do you help that owner transfer that knowledge to the sales team? How does that happen in a way that it’s received well and implemented by the sales people?
Tony (41:47 – 45:43)
Yeah, the one thing, a very, very common response from sales teams is really like they are naturally, we work for a company, we tend to like what we sell, we tend to like the product and solutions that we’re offering. And so those are the things that we want to talk about from a sales perspective. We want to listen for things that would make us believe, oh, yeah, they need my product, I’m going to make this sale.
When what really needs to happen is kind of a step back, and this is what business owners do well, is they’re almost like, well, I’m not going to sell you my product unless I really, really know why you’re buying. And what that really means is them taking a step back and understanding what problems they’re actually going to help solve for the company. And that’s the first thing is getting the sales team to understand what are the key problems, key business problems that a company, a product or solution actually solves for somebody and why they’re going to buy that.
Because they’re not really going to buy a product or service just because it has cool features or does this or does that. They are buying because they need to fix something or they need to change something that they’re doing today. And it’s up to the sales person’s job to connect the dots for that buyer to help them understand why they should buy.
And the way to do that is to first understand what high level problems that you solve. And then the how is all the details, all the product, all the services, all the features. But salespeople have a really hard time removing themselves from the product and the services and features and getting into the high level business conversation.
That’s why one common piece of feedback that I hear from reps is like, well, I can’t really get to the decision maker. I can’t have this type of conversation. And it’s because they’ve created that own environment.
If you stay in the technical, if you stay in the product and feature conversation, that’s who you’re going to be talking to at the organization. It’s when you start to escalate the conversation that you start to be able to get access to higher level folks in the company, decision makers, owners, president, the level, et cetera. So that gap there, that skill gap is really all about training, practice and coaching.
This is like the fact that if you go look at any professional athlete and really any sport, yeah, they have coaches, head coach oversees the team and that coach is coaching for the entire team. But then you look to an American football team, for example, and they have a defensive coach, an offensive coach, a quarterback’s coach, a running back coach. Now we have very technical and specific coaches.
And so that’s how I think about sales. Sales is in much need of a coaching culture and really someone to take a look at overall sales, call it the head coach and then the specialized coach that can coach in certain areas. And then after that, going with the professional athlete theme here, you’ll see many professional athletes, whether the play just happens or right after the game, they want to go see the tape.
They want to go see the film because they want to see exactly what happened so that they can go and try to address this so it doesn’t happen again. That needs to become a lifeblood of the sales organization. Like, hey, I just got off this call.
I really understand what went well, what didn’t, so that I can either get the information I missed next time, or I know what to do for next time. So this whole culture of reviewing the play, reviewing the sales and creating this coaching environment really is critical to the upskilling of the team.
Armando (45:44 – 45:58)
Yeah. And that’s helping them learn to see if they can watch that tape or play back that tape or listen to that tape and hear what they said, what they didn’t say, or what the customer said that, like you said, they just didn’t hear. They just didn’t hear when you said it.
Tony (45:59 – 46:34)
Yeah, it’s funny. Sometimes I’ll do coaching sessions and I tend to review the call and first make some notes, go back, listen to it again, and then meet with the rep or the team. Sometimes I don’t even have to say my notes because I just play it back to him or her and the rep goes, I said that, or why didn’t I ask this question next?
Why didn’t I ask that question? So it’s just even just the review of it, like the practice of reviewing it already starts to create new behavior, let alone the actual coaching that will help it as well.
Armando (46:34 – 46:49)
Yeah. And we see those professional athletes and they look spectacular. Well, that’s what they’ve been doing over and over and over again and getting the specific coaches to help them to execute well on those moves.
So we should have those same coaches ourselves, right?
Tony (46:50 – 49:18)
Yeah, absolutely. Especially in sales. I think my advice, especially to sales managers or sales leaders, to some extent it’s to get out of the way of reps, especially if you’ve hired the right people, they should be motivated, they should be excited to sell.
They should know that they have ownership in what they’re doing and it’s up to them to help themselves to be successful as well as the company. And beyond that, us as managers or leaders, we’re really here to facilitate probably like two or three things. That’s it.
First thing being is training and coaching, like being able to coach our team to help them get incrementally better over and over so that when they stepped into our, they look a lot different a month from when they step into organization to three months to six months, like they should continuously be getting better. And they’re going to do that through management’s constant coaching and feedback. So managers as coaches is critical.
The second piece is really helping reps become, helping coach through actual deals and opportunities. And the traditional way managers do this is by saying, hey, when is this deal going to close? Or hey, when is that deal going to close?
Or hey, can we close it this month or this quarter? And that is not really helpful for reps. If reps knew the answer to that, they would have closed it already.
And so instead, this whole concept of really shifting to be what kind of information do we know about this opportunity? What don’t we know about this opportunity? What do we need to find out in order to ensure that we should be forecasting that we can win this deal?
Where do we think, what are we missing that leads us to believe we’re not going to win this deal? Because we don’t want to get to the end and be completely blindsided, which happens all the time. Like, oh, I thought we were going to win that one.
They went dark on me for two weeks. And then they told me they’re not moving forward. We have no idea why we lost the deal.
And in reality, we should know that very, very early on. So as managers, we have to get better at coaching our team around deal management, pipeline management, etc. And then lastly, as leaders, working to fill top of funnel, where should we be going?
What markets? What new industries? Where can we replicate our success into new areas?
Again, if growth is part of our journey and our plan, and we’re willing to invest in it.
Armando (49:19 – 49:40)
So let me ask you about that sales cycle, Tony. You’ve touched on that a few times. And that sales cycle can be, for different product services, can be very different, of course.
How, as you’re getting that baseline data for them, how are you helping them to understand what that sales cycle really is?
Tony (49:43 – 52:08)
Yeah, it’s, you know, to me, it kind of depends on the company. And it depends on what their current sales motion is. For me, personally, I like to separate the sales cycle into two components.
First one being what I’ll call in pipeline, meaning they’ve actually are ready to talk to us. So to some extent, they haven’t talked to us before. And they’re ready to talk to us now.
So from that initial conversation, to the time that we actually have a signed contract. So I’ll consider that a traditional sales cycle. But based on the industry, based on the product, there are two other sales cycles that companies need to be aware of.
The first one being on the front end, which is the kind of the pre funnel sales cycle, meaning by the time I reached out to this person to the time they took the meeting, what does that look like? And I worked with a company who really, who thought their sales cycle was the in funnel sales cycle. And when you go to make investments based on the in funnel cycle, but you apply it to the pure outbound marketing pre funnel, you’re not going to get the same results that you thought.
And so it’s critical to also understand what your pre funnel cycle is from the time you actually start running the ad, you start targeting this audience to time they actually take the meeting, because that could look very different than your sales cycle. And so when you go to invest in new marketing activities, your expectation should be, it is the marketing to sign contract sales cycle, not the they took a meeting with me to sign contract sales cycle, because that’s very different. And then the third step is really on the post, post contract sales cycle, because some companies may have revenue that’s generated post signature.
So there, you know, think of it as companies who maybe have different usage, fees or revenue that comes on after a customer signed the contract, or maybe there’s transaction revenue that comes on post contract. So that sales cycle is also critical to understand like where at one point the customer get to where, you know, we want them to be in terms of revenue generation. So there’s really three distinct sales cycles when we think about the full revenue engine for the company.
Armando (52:09 – 52:50)
Wow. I’m so glad we’re having this conversation. It’s I’m so glad just to hear that.
You’re looking at the last piece really got me the, you know, the pre funnel, what’s in the funnel, and they actually buy, but then after they’ve become a customer, get into that revenue that you want so that they can be a profitable customer for you. So there’s obviously a lot, Tony, to what you’re doing, what you’re looking at and data metrics, KPIs, and that are part of establishing that baseline, as you’ve said, and, you know, helping them to really understand how does it work. But you’ve just said so much in this conversation that it’s hard for me to even summarize what you’ve said.
Tony (52:50 – 52:51)
Yeah, sure.
Armando (52:52 – 53:04)
I’m not going to try, but I’ll say instead is that if somebody would like to talk with you, they’d like what they’d like what they’ve heard, and they want to have a conversation with you. What’s the best way for them to reach you to have that conversation?
Tony (53:06 – 54:52)
Yeah, best way is to reach out, email tonyw at rev-sales.com. So email can also find me on LinkedIn, Tony Wiedenski, W-I-E-D-E-N-S-K-I, should be the only Tony Wiedenski out there on LinkedIn. So that should be easy to find or revupsales.com.
Again, R-E-V slash U-P, sorry, R-U-V-U-P slash sales.com. You can see some of the data packages that tend to fit with a lot of organizations. I’ve created what I’ll call jumpstarts to really help organizations see results pretty quickly.
But what to expect, first and foremost, my job as should be any salesperson’s job is to first assess what’s going on in the organization. Where is the sales function today? Where is the revenue engine today?
And from there, determine what I might recommend as a first step, and even recommend if this is something that I can help with, if I believe that I do have a recommendation for a problem that I can fix for you. So first off would just be a conversation to understand where you’re at. And then from there, I think it’ll depend.
It’ll depend on every organization and where they’re at in terms of what a potential recommendation might look like. Maybe the initial recommendation is to take a closer, hard look at the sales operations and process side of things and get that going before we think about training and upskilling the team. And so it really just depends on each organization.
But with any initial conversation, it’s all about understanding you, understanding the customer, and understanding if there’s a potential for me to help.
Armando (54:53 – 55:00)
And Tony, is there anything industry specific about what you’re doing or is it really industry agnostic?
Tony (55:00 – 55:36)
It’s industry agnostic because really I’m focusing on process and things that are just best practices in terms of sales and helping a company understand how to grow. When we get to the upskilling part and training, a lot of those are really helping the sales team and the owner use their industry expertise and knowledge in a new way. So naturally, it really helps them take concepts and methodology and gets them thinking about how they can apply it in their specific industry.
So it’s because of these two things that I am able to work across a variety of different industries.
Armando (55:37 – 56:13)
Fantastic. Well, Tony, thank you so much for the conversation. We’ll also put your information on the notes below to make it easy for people to contact you and reach out.
And again, as I said, a lot of times people are thinking about that exit, this once-in-a-lifetime exit, the business sale. That’s going to be their exit, but that business is going to continue and grow with new leadership and new ownership. And that new ownership wants to buy a company that is typically on the way up.
It’s growing, the revenue is growing, profits are growing. And that sounds like in terms of increasing the top line, that’s where Tony comes in. That’s where Tony can help.
Tony (56:15 – 56:25)
Yes, 100%. So as part of this conversation around increasing EBITDA and profitability, you know, growing top line, that’s where I’m at. That’s where I’m here to help.
Armando (56:25 – 56:29)
Yeah, perfect. Tony, again, thank you. Really appreciate the conversation.
Tony (56:30 – 56:31)
Thanks, Armando. Appreciate it.
Armando (56:31 – 57:07)
Hope you enjoyed this episode of the Founder’s Guidepost. Whether exit is on your immediate horizon or maybe 10 years down the road, there’s something here for you. And remember, we all have an expiration date.
We just don’t know when that will be, which is why planning ahead is critical. And if you’re wondering if you’ve missed anything in your planning, contact me to schedule your founder’s strategy call. You may call our office at 480-367-9000 or schedule a call at axiomcorp.com.
Here’s to your American success story.
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