Best of Foundr
Welcome to our special “Best of Foundr” edition of the podcast!
To celebrate Foundr’s 5th birthday, we put together a series of special edition podcast episodes that feature the best snippets from our most popular episodes. We pulled out the gems from each of your favorite interviews and compiled them into a three-week series of pure content gold.
This is the second week of our three-part series. Last week, we heard from four successful entrepreneurs on how to build an epic online presence.
This week we are focusing on investing, sales, and scaling your business. You will be learning from two masters of sales, Ben Chaib and Matthew Kimberley; from the shark himself, Robert Herjavec, on investing and scaling your business; and lastly from Mr. E-Myth himself, Michael Gerber, on setting your business up to scale.
These are some of my personal favorites that have had a huge influence on how Foundr is run today! Enjoy listening to the best of the best!
- Get a master lesson from Ben Chaib on how to sell anything
- Learn from Shark Tank star Robert Herjavec on selling, investing, marketing, and building your company
- Michael Gerber explains how to leverage systems to scale your business and get it ready for sale
- Matthew Kimberley reveals his blueprint on how to become a sales master
Full Transcript of Podcast
Nathan: Welcome guys to the second week of our 3 week, “Best Of” series!
We have clipped and edited the most popular episodes of the podcast we have released, and found the gems from each episode that will really give you an edge when thinking about your own business, your own brand and how you are operating.
This week we have some epic conversations lined up for you around Investing, Sales and Scaling your business!
In this week’s episodes you will be learning from The masters of Sales, Ben Chaib and Matthew Kimberley; from the shark himself, Robert Haverjac on investing and scaling your business; and lastly from the master of scaling, Mr E-Myth himself, Michael Gerber on setting your business up to scale!
These are some of my personal favourites that taught me so much and have truly had a huge influence on how Foundr is run today!
First up, we have Ben Chaib. This is probably one of the most dangerous podcast episodes that we are going to release. I just know that if you use this stuff, it can be absolutely game-changing and explode your business. Here’s part of my conversation with Ben.
92: A Mastery Lesson on the Process of Selling ANYTHING! with Ben Chaib
Nathan: Yeah, I see. So I’m curious. This might be an interesting discovery session, but you’re very, very good at sales, Ben. So when you started out, what is…? Can you work us through the process of how you’ve built up your business? Because I know you’re doing some amazing things not only for your clients, but your own business and you’re a sales master. And that’s why I really, really wanted you to come on and share with our audience the sales process and how you take some…like, a prospect or even find a prospect and take them into…make them a paid customer, a personal paid customer. So can you take us through how you’ve built that business up in the past year?
Ben: Sure, absolutely.
Nathan: And then, also your process, your sales process.
Ben: Absolutely. Well, first off, what I did focus on is what I was great at. And then, I found ways to generate revenue in the things I’m great at, which is sales and teaching sales. But then, I took all of the things that I’m not great at, which is marketing, building, you’ve referred some great people to me on the technology side. But anything that I’m not great at I didn’t spend any time on. I just doubled down on my strengths. And so, I really focused on what I’m strong at.
So if someone’s strong at marketing, but they’re not strong at designing things, I’d say hire someone to design and go market your products, right? If you’re strong at sales, but you’re not strong at the back end of your CRM, go hire someone to do the CRM and focus on talking to prospective clients. So that’s what I did. And you know, my partner, she’s strong at consumer analysis and trend analysis and that’s what she focused on and she didn’t focus on anything else, right?
So I think you have to focus on what you’re strong at that’s going to generate your money and then, you have to start investing in the areas that you’re not strong. And I think that’s key. And a lot of people get scared and say, “Hey, it’s like the chicken or the egg,” right…
Ben: …”the cart and the horse. What’s first?” If you focus on your strengths, you can make money on your strengths, you can make money on your strengths. And so, but I’ve always taught people is, the sales process…which I’ll talk about this right now…is, you’ve got to make a sales process natural and you and authentically you. You have to understand that you’re taking your potential client through a journey through your conversation. And when you’re leading them through this journey, it’s important to understand that it requires a lot of listening and asking questions.
And a lot of times, Nathan, people go so fast in giving their pitch that they don’t know enough about their plan to even know if what they offer is right for their client. And that’s what I really focus on, is really teaching others how to find us.
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I think when you first start to…you know, when you’re first getting into this whole sales stuff…is, you feel like a scammer, you feel…it’s scary to sell, you feel guilty. What advice do you have to people that are just getting started, or they’re starting their business and they need to go out and get sales? Because I get something that…I love what Mark Cuban says. He’s like, “Sales cures all.” And it really does.
If your business is struggling, you need to get out there and hustle and start selling. But how do you bridge that gap between…inside of you, not wanting to be this kind of person that’s really sales-y, you don’t want to be one of those slimy, sales-y, kind of car salesman kind of guys? What advice do you have for people, to show people a way to not be afraid of selling?
Ben: Well, I think first, you need to have a lot of conviction in what you have to offer. You have to be convinced to run through that what you have–whether it’s a product or service that you have to offer–that it’s going to help your client. And that without a doubt, that it’s…they’re going to lose out if they don’t hire you or do business with you, because what you have to offer when you ask all the right questions… Again, this is not about pitching, this is making sure that you uncover the needs of your client and you find out that what you have to offer fits that need and narrows that gap that they have.
Only then, when you’re thoroughly convinced, it’s really not selling. It’s about asking your clients to write questions to uncover if there’s truly a need or a gap in their life–where they are compared to where they want to be–and that you can fulfill that gap. If you cannot fulfill that gap, it’s okay to let them know you can’t and refer them to someone that can. And what I have found is when you have that kind of mind-set, you generate more sales.
Nathan: That’s really interesting. So dude, take me through this sales process, this framework that you have. You showed me this diagram last month. It was killer, I loved it. And you started taking me through it and I was like, “Dude, let’s save this for the podcast. We’ll…
Ben: All right.
Nathan: “…we’ll put it in the show notes.” Take me through it. And can we use…can people use this framework for not only just getting on the phone, but also if they wanted to do webinars to sell their SAS…a SAS product, or anything at all?
Nathan: A sales presentation, whatever, in person, on the phone, webinar: you can…this applies to all, right?
Ben: This applies to all. The difference is how you would go about…if you’re not talking to something you’re doing on a webinar, you need to answer the questions in the webinar, right?
Ben: But the framework itself answers to all. And I think what’s key in the framework is to know that it’s an eight-step–it’s called the S8 process–and I’ll walk you through each step in the process, okay? But like I said before, it’s taking the customer through a journey. And also, Nathan, I’ll send you something that you can use that anyone can download, to walk them through the process. So after they listen to your podcast, if they want to run with it and go on it on their own, they can do something and they can start generating revenue from it.
Ben: Because I just know if they learn how to do this, they’ll make more money.
Nathan: That’s what it’s all about, man, you know…
Nathan: …get more customers, growing your business.
Ben: Absolutely. So you know, what’s important is: one, you have to be great at listening and great at asking questions, because your clients’ needs and issues, they vary so much. And what our job is to do, is to determine the root issue and address it appropriately for each client, so they can make a decision for himself or herself, “Is this a good fit?” So what I’m going to do is take you through the process. There’s a lot of open probes which I’ll talk about throughout the process. And open probes are basically, how to get your customer to engage, how to get them to speak more. And I’ll share what those are throughout this process.
So the first step in the process is called “share.” “Share” is about listening to stories and building rapport, because when you’re first talking to a client, Nathan, it’s about connecting with them. It’s about building trust, making a friend, showing an interest, making them laugh, finding a common ground. And how you do that, it’s really getting them to open up, so they speak more freely and they can build a connection. It’s asking them, telling them about what you…what they currently do, asking them, “You know, tell me about what you currently do. What else should I know about what you currently do?”
And when you get one-word answers is when you go in, “Hey, do you mind elaborating a little bit more on this? Can you share more with me about what you currently do?” It’s getting them to open up. What happens is, we’ve got to get our customers to feel comfortable with talking with us. And a lot of times, what we do is, we go in there pitching. And our goal in the sales process is to really…when you have your offer…is to determine the person you’re talking to, if they qualify to see your offer, because not everyone does, because you can’t help everyone. That’s the reason why there’s so many different offers out there, right?
Ben: So it’s getting them to open up, share…
Nathan: To establish rapport.
Ben: …establish rapport, listen to their stories, build up rapport. And when you get short-worded answers, it’s getting them to elaborate, “Tell me more about that.” That open probe, getting them to speak up a little bit more. The second step in the process, Nathan, is suitability. Suitability is about confirming a basic need and seeing if that client qualifies for your offering. You know what your offering is. This is not the time to share your offering with your client. This is the time to understand their needs and to see if they qualify for your offering.
So it’s making sure there’s a good fit between your product and your customer’s needs, understanding their needs and what they’re trying to accomplish. Asking basic questions like, “What is your current challenge and what goals are you trying to reach? How long have you been trying to reach this goal,” or, “How long have you been trying to find a solution to fix the challenge you’re going through?” Understanding what avenues they’ve already explored.
It’s these kinds of questions that really start to give you the ammunition to see if it’s going to be a good fit. And I recommend when you’re asking these type of questions, you take a lot of notes, because you really want to understand your client’s needs. Asking them what do they think they would be using the solution for, using the developmental probes. When you get one-word answers, Nathan…this is where it’s key. Every time you get a one-word answer, it’s about, “Can you share a little bit more with me? Would you mind elaborating a little bit? Tell me more about that.”
You want to get them to open up. You want them to share more, because what’s interesting is, the more you get your customer to share about their problem, the more they’re selling themselves and they need a solution. That’s key. So if you think about it, when you’re talking to someone about Instagram and what’s their challenges of getting out there and where they looking to using it, what happens is, if you just be quiet and let them speak, they start selling themselves, why they want and need a solution. It’s amazing.
Nathan: Is that called future pacing?
Ben: Yeah, I guess that’s the technical term for it and it’s future pacing. But to me, what I found interesting is, I rarely have to ask a client if they want to do business with me. They usually tell me…by the time I get to the eight steps, they’re usually asking me, how can they get started with me, because I take such an interest in that client that it makes me…And that’s what I train everyone on, too. And that’s what happens: is, one client that I’m working with right now, it’s an $8-million company. We’re already pacing to $25 million and we just started working together just two months ago.
Nathan: Yeah, wow. All right, let’s…I really want to delve in on the work that you’re doing with one of your clients, because I think that would be really interesting. But let’s keep going for this process…
Nathan: …because we’re not finished yet.
Ben: So the second step was “suitability.” The third step is called “significance.” Significance is where you really uncover the problem and discuss the implications of inaction. This is where you start to understand their motivation and what it’s costing them for not finding a solution. See, price is only an issue, Nathan, in the absence of value and between these next two steps is where all the value is built in your conversation. It’s having them recognize how important it is in their life and the pain of doing nothing. How important it is to find that solution and the pain of doing nothing. Help them realize where they are and if they don’t make a change, what are the consequences of that inaction.
So some of the questions I usually ask people is, “What’s motivating you to pursue this solution? Why is it important to you? What will change if you move forward?” See, this is what’s interesting. When you ask a person, “What will change if you find this solution? If a solution existed that was able to generate more leads for you, what would that do for your business,” this is where your customer starts to build value. They might tell you, “Well, it’ll bring me more customers.” “Okay, how many more customers are you thinking? If you had a solution right now that would bring you…”
Like, if I was in marketing and I generated a lead–so I was a Facebook marketer–and I said, “If there was a solution that existed that would allow you to get more leads through Facebook, what do you think it would do for your business?” This is where your customer will start building value in a solution. And then, if they say, “Well, it’ll bring me more customers,” “Well, great. How much is that customer worth to you?” Then, they’re going to give you a dollar amount. “Okay, so how many more customers do you think it will bring you if you had this solution?”
Get very specific of what it’s going to do to their business, once they have their solution. And the more specific you can get and narrow it down to a dollar amount, this is the true value of your offering.
Nathan: I love that, because then, it becomes a no-brainer.
Ben: It does, because usually, what happens is, they give you a value. Like, one person might say, “Oh, each one of my customers is worth $1000. If I had this solution on Facebook, I’d bring in 10 more customers a month.” Well, that’s $10,000. And if I am a Facebook marketer and I only charge $2000 a month, well, it’s free to hire me, because a person’s going to make $8000 dollars profit on that investment. They know that in their head. As long as you get them to verbalize it, it’s true. If you start verbalizing it and you tell them the value of it, that’s suspect. So you’ve got to get your customer to verbalize it.
Nathan: Gotcha, gotcha. Because if you say it, then that means they’re being sold to. And people don’t like to be sold to, right?
Ben: No, they don’t. They like to be sold on their own ideas, but they don’t like to be sold to. So they’re happy to sell themselves. They would love to convince… they love convincing themselves why they want something and why they need something, but they don’t want to be convinced by anyone else. Because every time we purchase something, don’t we justify it?
Ben: We always do, regardless of the purchase. Regardless of if you’re buying shoes, a watch, a car, a toy, it really…a widget…it really doesn’t matter, you always justify it. So the greatest salespeople really get that person to sell themselves on the idea of the reasons why they need this solution, this widget, this gadget, whatever it is. So I think it’s significance is also to understand what’s get them from pursuing this before–pursuing the solution–because you need to understand where have been the hurdles in their life. And you need to know what’s kept them from moving forward, because if that thing still exists, you have to overcome it.
But then, they’ll let you know what has kept them. And then, I’ll say, “What happens if you do nothing?” You know, what happens if you do nothing? That answer that that person gives you scares them. If they say, “Well, I won’t be able to accomplish my goals,” then you have to follow with, “How does that make you feel?” Because you’ve got to remember, Nathan, people make decisions–buying decisions–because of their emotional decisions, right? So you’re trying to get movement, motion. And I said you cannot get any customer to move towards a direction until you put an “E” in front of that word, “motion,” which is…?
Ben: Emotion. If you don’t have your customer emotionally engaged–understanding how they feel, what are they thinking–they will not move forward. Or if they do, they have buyer’s remorse. Now you notice, we’ve went through “share,” “suitability” and “significance” and I still haven’t shared what I do.
Ben: So that’s the importance of these steps. So the next step after “significance” is “stretch.” It’s helping them imagine the possibilities, getting them to think big, imagine the future with this solution, creating vision, the value of making change, move them forward towards their goals. So this is where you can say, “Well, what would your life look like, once you learn X or have Y?” Or just help them build the vision and you’ve got to make it visceral. You’ve got to get them to give you the details.
And they’re…you know, great. If they say, “I’d make an extra $10,000 more a month if I’d learned this,” or “I had this,” or if they say, “It would really improve my business,” or, “It would improve my team’s performance,” you’ve got to say, “Okay, great.” And then, once you get that dollar value, it’s not enough to know what it’s going to be per month. You need to know what they’re going to use it for, because it’s not the money, it’s the use. What does that allow them to do? Now, you’re making it real for them, because now, they’re putting…they’ve already started spending the money in their head.
They’re saying, “Well, I’ll be able to reinvest in my business,” or, “I’ll be able to hire a person or give a person the reins.” Then, you’re able to get deeper in it to…and ask them questions like, “Tell me, how does that make you feel? Why is that important to you?” You get them to really buy into this idea that the solution has provided this value in their life. You know, it’s asking questions like, “What opportunities will open up for you once you’ve mastered this skill, or you’ve…Your team has mastered the ability to do X?”
Whatever it is that you’re selling, you’ll go, “What opportunities would open up? How do you believe your life or your career would be different once you complete X,” or, “…once that solution is involved in your life or in your business?” You know, “Once you find that right solution, how will this improve your income?” Per month, per year, it really doesn’t matter, because what you need to do is, once you really understand this and they’ve put a dollar amount to it, you can ask them what they’re going to do with it. But what’s important is not take it to the month.
Take that monthly, make it a year and ask the question, “So you plan on being in business for the next five years, 10 years, 20 years? How long do you plan on being in business?” They’re always going to give you a time that’s longer than five years, usually, right?
Ben: So if they say, “Ten years,” the value of your product or your offering or your service is basically that monthly amount times 12 times 10 years.
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What happens is, they start selling themselves on why they need that solution. They’re selling themselves this whole time on why a solution will really change their life, but it’s still not time to pitch. You go from “stretch” now. So we’ve covered “share,” “suitability,” “significance,” then we hit “stretch.” Now, we go to “select.” Select is where you’d learn their options and why they want you. This is where you get them to verbalize that they’ve looked at other options, but they see you as the only option now.
This is where you get them to sell themselves on working with you. This is, “How long have you been thinking about finding a solution? What did you like about the people you were working with before? Who else did you look at and what didn’t you like?” This is where you start building the ammunition, so when you give them your solution, you have all the things that are important to them and none of the things that aren’t. “You know, “What’s kept you from pursuing this,” or, “kept you from completing this…finding the right solution before now?”
And then, it’s okay to tell them, “Look, you can get these type of services other places. Why are you interested in working with me?” I ask that a lot. And what happens is, they start selling, “Well, you’ve really listened to me, Ben,” or…
Nathan: This is crazy, man. I’m laughing because this is so powerful. Just please, keep going. This is crazy.
Ben: Yeah. Yeah, because once they…what happens by asking them, “Why are you considering working with me,” they sell themselves on it. I don’t have to sell them. I don’t have to tell them why I am, they’re going to start telling you why you’re so great for them. You’ve listened to them, “Well, I’ve looked at your website,” or, “I’ve heard a lot about you.” They start selling themselves. Then, they start identifying the things in other places that did not suit their needs. You’ve got to say, “Tell me more about that. How did that make you feel?” You really need to uncover these things.
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Ben: All right, so if you look at that, it’s assigning a value to your program before you even ask for the investment at the end. So as an example, if I talk to a person and they said, “Well, you know what? If I had a solution that would really improvement sales skills…” because that’s what I do, right? They said, “If I had that solution, I’d increase my revenue $10,000 a month,” all right? And I say, “Okay, so how much is that a year?” I make them do the math, I never do the math for them. I literally say, “Go get your calculator.” And I wait, because if I’m not there physically, I’m on the phone, I have them do the math…
Nathan: Do they do this on the webinar, too?
Ben: On the webinar, too? What I would do is, I’ll ask the questions like…you know? And then, I’ll take the average of all the totals that people are giving me and just say, “Hey, can we all settle at this number?” And they said, “Yes, of course.” But what I’m trying to get them to do is create a value. And if I can take it from $10,000 a month to $120,000 a year, I ask…I say, “You know what, Nathan, I’ve got a funny math question for you. If I were standing in front of you right now with $120,000 cash, would you give me $30,000 for me to give me $120,000?”
Nathan: Of course.
Ben: Of course. So what did I just find out? Their willingness to invest. Now, because I already got them in the headspace that they need to invest to get…because they just talked about a solution given, now they’re thinking in their mind–it’s already seeded–“This can be $30,000.” But then, I ask them another funny question. I say, “Okay, you know what? Let’s say you only had two hours to come up with the $30,000. How would you do it? This is where people start telling me, “I’d put down a line of credit,” “I’d write a check for it,” “Take savings,” or, “Take a loan out,” “Put it on my credit card. You start finding resources they have.
Sometimes, I have a client that says, “Well, you know what? I just can’t do it.” So I’d say, “You’d let $120,000 walk out the door, because you just couldn’t figure it out?” And they go, “No, no, no, no. I’d figure it out and this is how I’d figure it out.” It doesn’t matter what they say, I just want them to think. I want them to communicate to me what they could do. Now, my offering, I always use a ridiculous amount, usually double or triple what my offering is.
Nathan: Yes, why?
Ben: Why? Because what I want to do is, when I give an offer, they already were seeded that the offer could be more. But I come in at $20,000 and I just use a $50,000 example or $30,000 example, they thought they got a discount. And it makes…there’s less apprehension to invest and get started now. And what this also does for you, as you’re learning and you’re building your business, it starts giving you what your true value is. So for me as an example, when I first started, working with me was $3000. Then working with me just started increasing to $5000, $6000, $7000, $10,000, $20,000. And it just continued to increase, because I started seeing the value I was bringing to people.
98: Robert Herjevac – Lessons on Selling, Investing, Marketing & Building Your Company
Nathan: Ok, next up guys, we have one of my personal favourites, Robert Herjevac. I got so much out of this interview and we have had some pretty incredible feedback from our community on this one too! Had a fantastic conversation with him, and we talked everything from pitching, selling, what he looks for when he’s investing, how to build a successful business. Robert is a super humble guy, so I hope you it enjoy it as much as I did!
Nathan: I see. And back then when you sold that business, who got a good deal? Was it like how deals go down today in “Shark Tank” or…
Robert: Yeah. I think we…I mean I look at back on it and I…you know, I had this long talk with people I know like Mark Cuban and other people. And I always think, “When is the right time to sell your business?” When the money changes your life. And back then, you know, we sold the business for $32 million, I think, and I didn’t have any money. I mean I was putting everything I made into growing the business. And you know, we were always rich on paper, but poor in cash, like many entrepreneurs when they started out.
So getting $32 million in cash was gonna alter my life, my kids’ lives forever.
And you know, it was really hard. In fact, I always treated it like my baby, and I didn’t wanna sell it, but I’m really glad I did because it got me kind of to where we are today.
I always think there’s three reasons to sell your business. One is if the money you’re getting will change your life, if you think the market you’re in has peak, and if you don’t wanna do it anymore. And I wanted to do it. I thought the market had legs, but the money was so extraordinary back then it really altered things for us. And so we sold it.
Nathan: Interesting. And when you…you did a previous interview, and you said that one thing that you wish you had have done in the earlier days was dreamed bigger. What exactly did you mean by that, and why do you think this is important?
Robert: Well, you know, I think it’s kinda like we’re talking about we’re now a global company. We compete in the U.S. We bought a company in the UK. We compete there. I never imagined that. You know, I never imagined that we could do that. We didn’t have that confidence to be able to scale to that level. And I think the beginning of any great journey is you kinda have to have an idea where you’re going. And I grew up in Canada, all my businesses were in Canada, and so our vision was to be the biggest and the best company in Canada. And now, my vision is to be the biggest and the best player in my space in the world. And I think, “Why can’t I do that?And it’s just the level of confidence. I wish I would have thought on a larger scale. It would have given me more growth, and more incentive, and a greater vision to start.
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Nathan: I’m curious. You’ve often told the story about how your mom…and this is a good segue into your book, your new book, “You Don’t Have to Be a Shark,” that had just come out. You once…I’ve heard you talk about that your mom sold a vacuum cleaner for $500 when you were a kid, and that was seven weeks’ salary. Why do you refer to that story?
Robert: I think it was really prolific for me because it taught so many things about sales, good and bad, and really understanding the language of business. I mean some salesmen took advantage of my mom because we didn’t know any better. And I think it really hit home for me. It was really traumatic because we couldn’t afford it. My dad was trying to save money for, you know, buying a house, and here we are, seven weeks’ salary into a vacuum cleaner. I mean it was crazy, and it really upset them. But for me, it was really an epiphany. If you don’t understand the language of business, if you don’t know how things work, and if you can’t make a certain amount of money in North America, you’re gonna take advantage of. And to me, it’s being taken advantage of. And I realized I better go out and make something of myself, make a certain amount of money to take care of the people that I love. I don’t…who wants to be taken advantage of?
Nathan: And yeah, look. I’m sure there’s many stories like this where sales guys, they just…yeah, they’re just sharks. So could you tell us about your new book, “You Don’t Have to Be a Shark”?
Robert: Yeah. It’s…I talked to…did you ever read a book called, “How to Swim with the Sharks and Survive”?
Nathan: No, I haven’t.
Robert: It was written by a guy named Harvey Mackay. So he…you know, I read his book when I was a young kid. And Larry King put me in touch with him yesterday because I always wanted to meet him. And it’s interesting. You know, the purpose of the book is you don’t have to be a shark, but you have to learn how to swim with them. And it really comes down to sales. You’ve got to learn sales. Sales is everything in life. If you can’t sell yourself, you’re gonna have a hard time getting ahead. Because in seven years of doing “Shark Tank,” that’s the one thing we’ve really learned is people are definitely afraid of sales. They’re afraid of rejection. They just think they can’t do it. They think they have to be that vacuum cleaner salesman guy — you know, pushy, or sleazy, or lying, or whatever the case might be.
And you know, I wrote the book just so anybody can learn sales and you don’t have to be that in order to do sales.
Nathan: Because I think, generally, when you’re selling, sometimes it can…or if you…the thought of selling to people. People don’t wanna be sold to, so it can feel kind of like a negative feeling or you know, something that’s holding you back. How did you get over that fear of selling?
Robert: Just by doing it wrong. I think that everything I’ve learned, I’ve done wrong, learned from it, and did better the next time. For me, the hardest thing about sales was rejection, because people in sales, they know a lot to you. And you go through this phase where you think, “Oh my gosh. It’s me.” But you realize, sometimes the product just doesn’t fit or it’s not the right opportunity. And I learned that the best way to do sales is to try to qualify and not waste your time.
Nathan: What are some practical tips for being a good sales person, not being a shark?
Robert: I think the first thing is you gotta listen more than you talk. That’s the big one. People think you have to…people don’t wanna be sold today. They wanna be educated. The other one is before I teach you to sell, I have to teach you who to sell to. Qualify. Always try to qualify who the right prospect is. The third one is motivation. You gotta understand what motivates the other side in anything. When people come on our show, they always tell us how good their business is. They tell us how they’re gonna make money, how the business is gonna make money, but then they don’t tell us, the investors, how we’re gonna make money. You always gotta understand what the other side wants out of it.
And then, you know, the final point I would say is, make it simple. People getting bombarded with information all day long, they don’t want big, long, complex stories. They want it to be simple. Have your value proposition down to a few key critical words that you can say in 30 seconds or a minute.
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Nathan: So when it comes to…you said you invest in the person more than the product or the service or the idea. What sort of qualities does that person usually have? Is there any rules that you stand by when you’re investing in that person?
Robert: You know, I think that the big thing that I always look for is the ability of that person to sell themselves. I mean I think if you can’t sell me on you, you’re gonna have a hard time selling a product or anything else. And so it’s funny because we usually make up our mind on somebody in the first couple of minutes, and everything that happens after that either supports that opinion that we’ve already prejudiced ourselves against, or something extraordinary has to happen for us to change our mind.
And so it’s, you know, how people come out, how they speak, the cadence of their voice, how confident they are. And then it all kinda leads from there. You know, if someone is really confident, and you know, humble, and they don’t know their numbers, we’re gonna help them. Somebody comes out, and they’re cocky, arrogant, and they don’t know their numbers, we hate them. And we see that on the show all the time.
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Nathan: Yeah. Wow. And I’m curious. The ones that are struggling, why is that?
Robert: I would say, if I had to pick a commonality, it’s adaptability. Great business founders have the ability to see the wall before you hit it, and they adjust. Like I always look at one of my best investments is a company called Tipsy Elves. If we would have stayed just doing…their original product, and their only product, was inappropriate ugly Christmas sweaters. If that’s all we still did today, we would be in trouble. But they expanded. Now we make, you know, ugly college sweaters, and we make Fourth of July t-shirts. And they make ski onesies and stuff like that.
I think that’s what founders do. You know, great founders have the ability to zig and zag. They’re adaptable.
Nathan: So is that what you were kinda doing with the Herjavec Group right now? You mentioned to me around how you’re taking the brand globally. You’ve just set up on offers in Sidney. Are you always…how many years are you thinking ahead? Do you set goals and work your way backwards? I’ve been told many multi-millionaires they…and billionaires, they think like years and years and years ahead. And they actually trace their step backwards. Is that how it works for you?
Robert: Not really. I mean I think we have a long-term ambition. But in tech, long-term is three years. Somebody once asked me. They said, “What’s your five-year plan?” And I was like, “Oh my god. I can’t even fathom that.” So we have a three-year vision, but we try to be focused on execution on a quarterly basis.
I think it’s important to know where you’re going, but in tech, it can be difficult. We have a short-term vision and a long-term goal.
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Nathan: I see. And how do you breed that kind of dogged determination and culture in your company? Because that’s not easy.
Robert: It’s funny. It took us a long time to figure out what we’re good at and what we’re not good at. And I think that’s one of the things that we are really good at is we know what works for us. We like to grow, we’re very competitive, and we’ve always been like that. And we try to find people who like to compete. In our industry, if you don’t like to compete, you’re gonna have a really hard time. And so what we’ve learned over the years is we tend to do well when we hire people for their character as opposed to their experience. When we hire people for their experience and they don’t fit in with us, culture is the hardest thing to hire for. And now, we hire people for culture.
So we have a lot of former athletes, we have some former Olympians. Well, you’re never a former Olympian, as I’m told. You’re always an Olympian. We have Olympians on our team, that kind of stuff.
Nathan: Yeah. Okay, I see. And I’m curious around leadership. This is something that I’m actually going through now in my company because we’re starting to hire a lot of staff. And it’s difficult. And I know many of our audience are going through this transition now from founder to CEO. I’m curious. What advice would you have for people that are scaling up, are hiring, are a first-time CEO? What lessons would you give?
Robert: In terms of growing quickly?
Nathan: Yeah. In terms of growing quickly, and managing and leading people. Because it’s very difficult, especially when you’re a first-time CEO.
Robert: You know, I think it’s really hard, but you’ve got to look at in terms of creating a greater team. I think a lot of entrepreneurs, when they’re small, get very frustrated with that and think…you know, I can’t tell you how many times I’ve heard entrepreneurs say that the best business is a business without employees or you know, the best employee they have is themselves or that kind of stuff. And I’ve never really thought of that. I’ve struggled with hiring people, but I’ve only seen it as an integral part of growing and getting scale. And as you grow your business, your greatest quality has to become the ability to build the people around you, and get everybody pointed in the same direction.
Nathan: I see. And how do you get people to do their best work?
Robert: Well, first of all, you have to hire people that wanna do their best work. And you have to have a common goal, and you have to lead people. I think people today wanna be led as opposed to managed. So I think you’re just…you’ve got to be constantly giving them the direction, motivating them, and you’ve got to be the top sales person in your company. People wanna be led with vision and passion and purpose. Nobody wants to go to work and say, “Oh, it’s just a job.” Even though it may be just a job, they don’t wanna feel that way.
Nathan: Yeah. I see. Just a few more questions for you. I’m just going to say, when it comes to “Shark Tank” and pitching, do you have just some…you know, a couple of pointers and advice for people that are going out and pitching their product or service?
Robert: A couple of things. One is never forget the first thing you’re selling is yourself. Make it simple. Don’t overcomplicate it. Have a value proposition that’s easy to explain, but understand the motivation of the people that you’re pitching to. You know, we went to Silicon Valley last week because we’re thinking about maybe bringing in some investors, that kind of stuff. And one of the things we did is we always try to understand what the exit plan is and what the motivation is for the other side.
Nathan: Yeah. What’s in it for them, how can they get a return.
Robert: Yeah. Because everybody’s got to be on the same page. The mistake that people make is they try to bring an investor in, and that investor’s goal is not equal to theirs. They may wanna grow the business, keep it for five years, and somebody just wants to come in for a quick return.
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Nathan: That’s a great attitude to have. Awesome. Well, look. Two more questions. One, do you believe that you always need to raise capital to build a successful business?
Robert: No. I don’t believe that at all, but I think you have to have access to cash when the business needs it. That might be a line of credit. That might be your credit card, but cash is the life blood of your business. So if you’re not gonna raise capital, you better have a really great relationship with your bank in terms of a line of credit. And I think the only time you should bring an investor in is to help you grow faster. You know, as an owner and a founder of a small business, your biggest payback is equity. Try to hang on to it as much as you can for as long as you can.
Nathan: That’s great advice. And also, when it comes to, you know, growing a company, running it, when do you know when to give up, and when do you know when to keep going? Do you ever give up?
Robert: Absolutely you should give up when you’re not growing. I mean I think in our world, it’s really easy. You either grow or you die. We don’t have a choice. So if we don’t grow, we’re moving backwards, and we’re going out of business, is how we look at it. There’s a great saying by Andy Grove, the guy who ran Intel, “Only the paranoid survive.” And I’m not sure if that applies just to technology. I think it applies to everything. And we’re very paranoid. But you know, sometimes in the business, if your market’s dying and people are eating away your market share and you don’t wanna do it anymore, there’s nothing wrong with giving up and starting again. But I’ve never done that. I’ve always been able to adjust to changing markets.
120: The Master of Systems (Michael Gerber) Shares How to Scale Your Business
Nathan: So the next highlight is an absolute treat for you! His name is Michael Gerber, and he’s the author of a very world-renowned famous book called “The E-Myth.” And in this interview we talked about systems, the importance of them, how you can use them to scale and grow your business, but also get your business ready to be sold. A lot of people thank him for setting up their business in a structured way, because it’s all about building a business that’s a well-oiled machine where you have processes and systems in place, which allow your business to run like clockwork.
Nathan: That’s really interesting. So the first question I have then, is you’re saying that things haven’t changed? What is the common problem that you tend to see in any type of business and how do you solve it?
Michael: Well, the common problem we discovered years ago, and that we keep on rediscovering day after day after day after day, is that the misnomer…based upon this idea of entrepreneurship, is that in fact, very, very, very few people I meet are actually entrepreneurs what I’ve come to call. Instead, they’re technicians suffering from an entrepreneurial seizure. Meaning they went out to create a business, we’ll call it, though I have another name for it.
They’ve gone on to create their own business, but they don’t do it like an entrepreneur does. They do it like a technician does. They create a job for themselves. And they create a job for themselves to do what they know how to do.
But as they do that, becoming what we’ll call a “company of one,” they leave out everything else that, in fact, they need to learn how to do. So our job has been discovering what’s missing in this picture in almost every one of the hundreds of thousands of companies we’ve walked into, Nathan. Just think about that; hundreds of thousands of companies. High-tech, low-tech, no-tech, makes absolutely no difference. Hundreds of thousands of and 100 companies in 145 countries. So it doesn’t vary from country to country. It doesn’t vary from industry to industry. It doesn’t vary from product to product or service to service. It doesn’t vary from person to person, from culture to culture. Even though, obviously, there are differences.
What’s most intriguing is what the similarities are. Because the moment you can see that systemically, from that 10,000-foot level, let’s say, you suddenly open up a door that’s just magical. And it’s magical because it suddenly demonstrates to you the universality of opportunity. The universality of problems. The universality of business. As opposed to the highly specific nature of each and every thing we do, and each and every way that we do it, etc., etc., etc., etc.
And if what I’m saying is true, and it’s absolutely true, we have proven it with over 100,000 small business clients since I started the company in 1977. If that’s true, and it is true, well, then what? It means that all of the sturm und drang, all of this stuff that everybody is doing is somehow off the point. And if it’s off the point, I’m essentially meaning that there’s something fundamental that every single individual owner of every single company of one. Whether it be one person or five or nine, it really doesn’t make much difference. Every single one of them can suddenly discover something they’ve never seen before. It oughtn’t to be as difficult as it obviously is. Otherwise, there wouldn’t be such an enormously tragic failure rate among small businesses worldwide.
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Nathan: Yeah. Now, I’m really excited, too. Can you share a little bit more on what it takes to build a fast-growth enterprise?
Michael: Absolutely. Now, hear this, you just said something which is a bit different than I said. You said “to build a fast-growth enterprise.” Great companies were not grown fast. Now, understand, relatively speaking, it could have seemed to be fast. But FedEx wasn’t fast. Amazon wasn’t fast. It took place over a significant amount of time. Now, obviously, what took place over that significant amount of time was significant. Meaning Amazon is significant. FedEx is significant. So it wasn’t fast. It was very, very, very specific.
So let me share with you the steps that we’ve defined in “Beyond the E-Myth: The Evolution of an Enterprise from a Company of One to a Company of 1,000!.” The first stage of that process is that platform that I was speaking about earlier. And that platform really is built around the four very critical personalities of a true entrepreneur. Nobody has ever really talked about the entrepreneur the way I’m going to describe it to you.
But the very clearly four distinct personalities, you might say necessary skills, to be an entrepreneur. The entrepreneur, first of all, is a dreamer; second, a thinker; third, a storyteller; and fourth, a leader. Now, understand, I’m not using these words rhetorically, meaning this is not just shtick. Meaning everybody has got to have a model. That this isn’t…the point is, that a dreamer has a dream, a thinker has a vision, a storyteller has a purpose, and a leader has a mission.
So the steps that I just described, the very specific component parts of a true entrepreneurial personality, are fundamental to growing a true enterprise. Because without a dream, it ain’t getting there. Without a vision, it can’t take form. Without a purpose, it’s not serving anything. And without a mission, there will be no system there. So the dreamer has a dream, the thinker has a vision, the storyteller has a purpose, and the leader has a mission. That’s the platform.
So the very first thing we say to a prospective entrepreneur, a new entrepreneur, an awakening entrepreneur, a small business owner, or someone who wants to start a small business, is “First of all, we have to discover your dream, then your vision, then your purpose, and then your mission.”
So let me define for you what those are so that you and your audience can actually lay them out before you and see the logic of them. Because, Nathan, if what we do…and understand with over 100,000 clients over the years, what we do has to work. Meaning it has to produce a positive impact. Otherwise, there’s no point. We talked about the business development process of innovation, quantification, and orchestration. Innovation, reinventing what you do to improve it. Quantification, measuring the outcome of that innovation to make certain it is an improvement. Because if it isn’t, it’s just change for change’s sake. And finally, orchestration. That means documenting that change, that improvement to become an operating system.
Because in the absence of an operating system in any company, all you have is a random exercise. You could have six people selling whatever you do, and every single one of them sells it different. You could have six people doing what you sell. And every single one of them does it different; my way, his way, her way, their way. And in fact, that’s exactly the opposite of what must exist for an emerging enterprise to truly do what it’s set up to do, which is to scale.
Meaning hamburger stand number one, hamburger stand number two, hamburger stand number three. Salesperson number one, salesperson number two, salesperson number three. Chiropractor number one, chiropractor number two, etc., etc., etc. Meaning it’s got to be replicable. It’s got to be scalable. And the only way you can do that is with a system.
So you ask how do we apply it? So the first thing is “I have a dream, I have a vision, I have a purpose, I have a mission.” I’m saying every single small company must have a dream, a vision, a purpose, and a mission. You can’t get anywhere without it. You can’t sustain any energy, the energy you’re gonna need, to go through the hierarchy of growth, as well it, from a company of one to a company of 1,000. Can’t do it without a drea, a vision, a purpose, and a mission. And each of them have their distinct purpose.
And it’s a process. Not just four different things, it’s a process; first, the dream, second, the vision, third, the purpose, fourth, the mission. So I’m saying every single one of the people listening to us right now needs a dream, a vision, a purpose, and a mission. There’s absolutely no way around it. And they don’t have one. And if they do, I will absolutely assure you, the dream and the vision and the purpose and the mission are incongruent. Meaning they don’t fit. And because they don’t fit, they’ll never work.
And so, what most of us don’t understand is how we think at 10,000 feet determines what we do at one. And that was the brilliance of Ray Kroc, who started out his first store at the age of 52. Can you believe that? So much for “You’ve got to be young.” No. You’ve just got to think differently.
And so, your audience, all of the folks you’re speaking to, that we’re speaking to right now, I’m telling them the good news. The absolutely spectacularly good news, that there’s a way to do this. Not the best coach, not the best mentor, not the best facilitator, not the best guy, not the best lady, not the best…this is the best. There’s a way to do this. And that way is available to every single solitary soul on the face of the planet. And there’s a logic tree to it. Step one, step two, step three, step four.
So once you get your platform built, your foundation built–my dream, my vision, my purpose, my mission. Not personal dream, but in-personal dream. “My dream isn’t about me. My dream is about them.” Who? In my case, every small business owner on the face of this planet. Because if what we said earlier is true–they’re broken, they don’t work, they fail–then we have the greatest opportunity imaginable. Because we can invent a system that alters all of that. And that’s what we have done, and that’s what we’re continuing to do.
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Nathan: I love it. I’m looking forward to picking up a copy myself. Look, I have a couple more questions, Michael, this has been fantastic. I could talk to you all day, but I’m mindful of your time. A couple of questions and we have to work towards wrapping up. You talk about a company’s purpose, eventually, is to be sold. How do you know when it’s ready to be sold, and what are some things that you can do to achieve the highest multiple?
Michael: Well, first of all, you know when it can be sold because you know what the market is saying to you. When a company is ready to be sold or not ready to be sold, you know you’re doing something when people begin to walk in and say, “I’d love to buy your company,” or “I’d like to have one like yours in Pittsburgh.” Or “I’d like to open one up in San Mateo. You know it. The consumer’s telling you, your people are telling you, your results are telling you, your accountant is telling you, your CFO is telling you, everybody is telling you. “Wow, wow, wow.” You know it’s ready. You know it’s ready to be sold. Whether or not you’re ready to sell it is a different story.
How do you increase the return on your investment is by doing what I’m saying needs to be done with just extreme, extreme determination. In short, when I say “turnkey,” you’ve got to accept it in its fullest sense of the word. “Turnkey” means, literally, “turn key.” Look, I opened the second one, the third one, the fourth one, the fifth one, the tenth one, the 90th one, whatever, whatever. And each of them can operate in identically the same manner, because they do what they do with precision. That method, that mindset is critical to it.
And that’s at the core of the return on your investment. Because when you’ve created a company that has the power to do that, to scale at will, that all it requires is capital. You understand? All it requires is an infusion of growth capital to open up the third, the tenth, the 50th, the 10,000th. But what you know is you know how to manage it. What you know is you know how to lead it. What you know is that it knows how to do what it’s become famous for doing.
Nathan: Yeah, no, you put it brilliantly. So look, I have one last question, and that is around personal branding. If you have a strong personal brand, do you think that you have to be careful because that can tie the, I guess, the value generation system that you have within your business to potentially be sold?
Michael: Well, let me put it in a different way. I’m saying first of all, personal branding is nonsense. And I say personal branding is nonsense simply because no entrepreneur sets out to create a personal brand. Ever. Only technicians do. Because the technician is selling himself. The entrepreneur is selling his company.
So no entrepreneur sets out to create a personal brand. Now, they will simply by the fact that they’re really good at what they do. So Steve Jobs obviously had a personal brand, but nobody bought Steve Jobs. Nobody went to the store and said, “I’d like some more Jobs, please.” Right? It’s the dumbest idea in the world. Why would he do that? No, instead, he created the wealthiest company in the world. Instead of creating a personal brand, he created the wealthiest company in the world. Why? Because the sucker works. Doing what? Doing what he set out to do. It works. He doesn’t.
Now of course, he works as the leader of that enterprise. You understand? As the leader of that enterprise. Steve Jobs is the least likely guy to become Steve Jobs. He dropped out of his college in his first year. He went on a spiritual search to India and dropped out of that in half a minute. Came home and got a job in technology and he was a disaster at it. And he went to his father’s garage to open his company. Never had any experience in business. Never succeeded at anything.
So then what? Well, I’ve just shared with you “Then what.” So personal branding is a silly thing. Personal branding is something that coaches create to sell to people who need a personal brand. Because they got a job doing it, doing it, doing it, doing it, busy, busy, busy, busy, and they’re selling themselves. “Buy me. Don’t buy them.” “Buy me. Don’t buy him.” You follow me?
Nathan: Yeah, 100%.
Michael: Yeah, “Buy me, buy me, buy me, buy me.” That whole bullshit conversation is such a tragedy because in reality, very few people ever develop a personal brand, albeit they’ve spent a fortune on being coached in how to. But in fact, it’s absolutely the opposite of what they should be doing. They should be miserable.
So all of this is counterintuitive, Nathan. But it’s so exciting. And it’s so exciting just as I said because everybody can do it. It doesn’t mean that your dream is gonna be my dream, is gonna be his dream, is they’re gonna be dream; it doesn’t make any difference. Your dream could be exactly what my dream is. Your vision could be identical to mine. Your purpose, identical. Your mission, identical. But when we’re both done, they’ll be different. Unless you stole mine. Do you understand?
Nathan: Yeah, 100%.
Michael: And they’ll be different because we’ll have seen them differently, applied them differently, tested them differently, quantified them differently, documented them differently. And what a joy to behold. When companies are working at that level, Nathan, all the guys who are listening to us right now, every single one of you listening to us right now, when we’re working in that world, it’s a completely different planet. That’s what moves me.
So when I use the word “transform the state of small business worldwide,” I mean, literally transform it. Because it’s a completely different universe when we’re operating that way. Just as Apple is in a completely different universe than every company on the face of this earth. And Google is in a completely different universe than every single person listening to us right now. It’s not “They’re in business. They’re in business.” No, it’s not “They’re in business. They’re in business.” Google isn’t in business in the way that Jerry is. And Jerry isn’t in business the way Google is. Jerry is simply doing it, doing it, doing it, doing it, doing it, doing it, doing it, doing it. Goes to work every day, goes to work every day, goes to work every day, goes to work today and says,
“I’m a solopreneur.” And I’m saying, “Bullshit, Jerry. You’re just confused. Please, let me clarify it for you. Let’s just spend this little time together so that I can hopefully alter the way you see it, and if I can alter the way you see it, everything changes.”
134: A Blueprint on How to Become a Sales Master with Matthew Kimberley
Nathan to record: And lastly guys, here is a conversation I had with Matthew Kimberley. Matthew and I meet at a conference a few years ago and really hit it off, we are still friends to this day! With Matthew, we really delve into the fact that Sales is the lifeblood of your business and if you can’t sell your product or your service, you’re in a bit of trouble. And that’s why I asked Matthew to come on, because he’s got an interesting framework. It’s really, really solid as well. Enjoy!
Nathan: Let’s switch gears. Can you sell without being slimy?
Matthew: Absolutely, categorically yes, you can. And I think the proof, Nathan, is that you buy stuff, right, probably on a daily basis, as do all of us. The people who are listening to this buy stuff on a daily basis. And how many times do they come away from that feeling, “Yuck, I’ve got to take a shower,” or, “I’ve got to have a steam wash,” or, “I’ve got to be de-slimed?” Almost never, to the point that when it does happen, it really sticks in our brain. Why? Because it’s an irregular occurrence. So if us, as consumers, don’t feel like we’re covered in ectoplasm after entering into a buyer-purchaser relationship, why is it that so many salespeople have got this hang-up that the minute they encounter prospects, they’re going to cover them in ectoplasm?
Nathan: Why? I don’t know. Yeah, why is that?
Matthew: Yeah. Yeah, why is that? That’s what I’d like to know. When we have a negative experience with a salesperson, then that takes in the craw. It remains stuck in our brain as being an example of what we don’t want to do. And so, we start to compensate–we overcompensate–for not being slimy by either never making a sales offer, or by making a weak sales offer, just because we don’t want to be that slimeball who once pissed us off, or the kind of traditional car salesman that goes down in folklore and is on every…every TV show, there’s always a dodgy, ambulance-chasing lawyer or a slimy salesperson or an ethical train crash of a financial services provider. They make good TV baddies.
They make good TV baddies, so we overcompensate for that and say, “Sales equals slime. Therefore, in order to not be slimy, I’m going to not make sales offers.” And this is problematic. So I think the people who very rarely come across or who have the least…let me say…rephrase that. The people…the salespeople who most rarely experience the “Am I a slimy salesperson” doubt are the people who are confident about the value of their product. I think if you have…and I think it genuinely is a confidence issue.
If you are not sure if your product or service is for the person who’s in front of you, you’re going to have to go out of kilter with what you believe is best for the person in front of you or the humanity–the empathy side of things–by delivering them something that they don’t want or need. So if you’re a person who…because you don’t believe they want or need your product. If you don’t believe they will want or need your product, then you will have an ethical quandary, providing that you experience some form of sensitivity towards other people, providing you’re not a full psychopath.
So if you’re not sure…and this comes with experience, as well. It’s easier to sell something that has worked for a dozen other people. It’s easier to sell a widget that you use yourself. If you wouldn’t sell it to your grandmother, if your grandmother was in your target market, you shouldn’t sell it to the person in front of you. If you doubt your ability to provide that service, then then you’ve got to be upfront about that doubt and even upfront about that doubt with your prospect, if necessary.
But I still think you can follow a systematic process, even if you’re not 100% certain, in order to allow that person to make a decision. Sales is not forcing somebody to do something. Sales is encouraging somebody to make an appropriate decision for themselves within a timeframe that suits both of you.
Nathan: Interesting. So when it comes to selling, professional persuasion, where’s the first place that people can start? You talk about a system. What does your sales process look like? Can you take us through it?
Matthew: Absolutely right. Yeah. So in order to sell, you can either leave it up to the prospect…so you can say, “Right. Here…I’m going to stick up a sign that says, “You can buy my widget here,” and if people are interested in a widget, they’ll find out about it. And just in marketing, you can say, “Look, widgets for sale.” And people can come and have a look at your widget and you stand there with an order book and those who are ready to buy, buy, right? Or you can make it more likely that they buy, more likely that they have all the information they need by following a system for selling and many large organizations have these systems in place.
They’re called pipelines, they’re called sales processes, they’re called funnels, they’re called launches, right, where you make sure that you hit all the likely buttons, that people have the information that they need, in order to…and to build out some excitement and to give them an incentive to do it now instead of later, which is better for everybody, if you believe that they should have it now rather than later. So…or, you can leave it up to chance. And too many people–particularly the solo operators that I tend to work with–leave it up to chance.
So instead of leaving it up to chance, you can lead them through the stages of the pipeline, the steps of the funnel, the process. And what I’ve done over the last 15 years or so, since I’ve been studying this off, is take all of the individual elements and piece them together in some kind of order which makes sense to me. And that is my professional persuasion program that begins…it begins with the qualification phase. So who’s the person you’re talking to and who are you? You qualify themselves and then, you qualify yourself as the vendor of choice.
Then, you enter the clarification phase. The clarification phase is when you actually let them know what they’re getting: what it is, how it works, what the numbers are for, how to turn it on and whether or not it’s for them, if other people are using it, if it’s appropriate, stuff like that. Then, you do…once they know what they’re getting, then you can just start to quantify that with prices and sales conditions. So you say, “Now, you’ve seen what you’re going to get. Let’s quantify what that means for you in monetary terms today,” and then, you close, right? And those are the four big big-picture steps.
So the qualification stage is absolutely critical. And I don’t need to torture you or your audience–I believe–about the importance of a niche, the importance of a target market, the importance of making sure that the person in front of you has the financial means, or access to the financial means, in order to become a customer. I don’t need to tell your audience, Nathan, that if you want to sell hotdogs, don’t sell them to people who are walking out of a restaurant. It’s kind of the basis of qualification. Is this person…does this person have the emotional drive, do they have the financial capability, do they have the situational need: if they need it today?
Identifying the last part–which is often neglected, but which I learned from my mentor, Michael Port–is, do they belong in my world? Do I want them…? Maybe if you’re selling a widget, it doesn’t matter. But if you’re selling a service, do you want to work with this person? Do they pass your red velvet rope policy or do they fail the douchebag test? So that’s important as well. There’s got to be a good deal of qualification. The more you work on qualification up front, the less…and this is after your marketing has done its job of bringing people to your front door, right?
Then, you qualify these people: are you allowed in? Do you belong here? Is it appropriate for you? If you do that hard work and really hard…another one of my mentors, Taki Moore, has a process called application selling. It’s like, if people want to work with you, they have to fill in an application. That’s great qualification, because they’re filling in the application themselves. You’re not saying, “Come on, come on, come on, come on. Come in, come in, come in.” That makes you a needy salesperson and that’s unattractive. That shifts the balance of power to the buyer, where they’re dangling the carrot and you, the salesperson, are trying to grab it.
It should be exactly the opposite way around. It’s like, “I’ve got something for you and if you’re lucky, you can have it. Oh, and not just lucky, but you’ve got to qualify.” When you go to the doctor, the doctor doesn’t say, “Choose me, choose me, choose me.” He’s like, “You have a verruca on your foot, but I’m definitely the person to do it. Let me show you all the verrucas that I’ve cured in the past.” No. He just goes, “Of course I’ve got the answer. And if you give me enough money, I’ll help you.” That’s the way I think that we should be approaching things. That’s the mind-set shift.
Instead of putting up prospects on a pedestal and kissing their feet, you say, “I am the prize and if you qualify, you can get a piece of me.” That’s difficult for a lot of people. And that’s why people fear being slimy, I think, because they don’t see themselves as the prize.
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Nathan: And when it comes to qualification, do you think someone buying, like…? What are your thoughts on the ascension model: having a series of products throughout the sales process or in the funnel, having some sort of level-entry product or service or something to qualify them. So you don’t have to pay a nominal fee to be somewhere, or you don’t have to pay a nominal fee to fill out the application, or a deposit, or…what are your thoughts on those kinds of things, in terms of qualification?
Matthew: Yeah, I think it’s absolutely critical. And you’ll know, Nathan–as I know and any other person who’s sold more than one thing in their past–that your best customers are your existing customers. Anybody who is a happy customer who has already spent money with you and has gotten what they wanted will be more inclined to spend money with you again, because the element of risk has almost been annihilated. There is no risk if you’re going back in…well, there’s always some elements of risk, but it’s much less.
I’ve just launched a coaching program, Nathan, and I’ve asked everybody who’s come through…I’ve said, “Why did you join?” And a lot of them have said, “Well, because it’s you and you never fail to deliver.” And that’s fine, right? “I didn’t even know…” like, somebody…one person said, “I didn’t even know what it was, but you’ve never let me down in the past. So let’s see what you’ve got. I generally need it,” right? That’s the…great. So that’s…yeah. So the ascension model, can you…? Yeah. People commit. Commitment creates commitment.
Commitment creates commitment and people commit different things, right? You can commit money, but you can also commit time or energy or attention to something as well. One of the famous qualification tests…I’m trying to think of the name of the guy who told me about it. I can’t now. It’s like, all these kids are sitting and exam, right?
Matthew: And to pass the exam, you need to get 100%. And the first instruction is, “Read through the entire paper before you answer any questions,” right? And then, the first one is…point number one, “Take out a pencil and write “X” at the top of this paper.” Good. Point number two, “Stand up and shout, “Hi, I am here.” And people around the class are doing that. Step number three, “Do five push-ups.” And these people go, “Yeah, this is easy. I’m easily going to get 100%.” And then, you get down to question number 20 and it says, “Thank you for reading to the end of the paper. Do not do any of these questions. Hand in a blank paper.”
So that’s a great qualifier. That’s a great qualifier. Do you see why that’s a qualification? You’re getting people to…if you don’t do what’s expected of you in question number one, the chances are, you’re not going to pass the test. It’s the same with interview applications. We see this a lot. When you’re hiring a VA, I’ve seen a lot of recommendation would be, “Please follow the application of rules to a letter,” to a T. So, “I’m looking for somebody who’s going to create”–let’s say…I don’t know–“curate my Instagram feed. I’m looking for somebody who’s going to run my Instagram feed. If you think this is you, please submit an application of no more than 100 words and tell me what your favorite color is.”
And the minute you receive an application which is 5000 words and they don’t mention their favorite color, then you know that this person doesn’t qualify to work on your team. They have disqualified themselves by not answering the right questions. So when it comes to the ascension model, people can invest their time. You can ask them to read…you know, “Read this before you show up.” Or I have a friend who introduced me to action-based coaching, where I used to have a problem when I was a coach. I used to do a lot more coaching than I do now.
But the problem was, I would sit down with people and I’d go, “Right. So here’s what we agree that you would do before the next session. You’ll go out and you’ll have 10 sales conversations, then you report to me when you get back. Right? Good. Okay. So let’s fix our next meeting for Wednesday next week.” And they’d come back Wednesday next week and I’d say, “So how many of those sales conversations did you have?” And they’d say, “Well, you know, I couldn’t have any, because the cat was sick,” or, “I had an existential crisis,” or something like that. And we’d end up having a therapy session and I wasn’t good at this. So I said, “I need a better quality of client who qualifies themselves upfront.”
And I think it may…it might have been James Shenko, actually. I don’t remember. And…it could well have been. He was like, “Well, why not try something else? Why not qualify them for every single call?” Which is, “Okay, here’s what you need to do. At the end of our session, you agreed to go away and have 10 sales conversations and try this approach.” “Yes.” “Good. When you’ve done that, send me the report and we’ll schedule our next call. But you can’t have your next call until you’ve done that.” So that’s an ascension model. You can ascend to the next call if you have followed through.
I think it’s very important to allow people to make investments…and this comes directly from Michael Port, who I worked with for six years at Book yourself Solid. This is directly his quotes. It’s not mine, but it stuck with me. “People will make investments that are directly proportionate to the amount of trust that you have earned.” So if you’re asking somebody to invest $5000 and they’ve never met you before, then that might be asking too much. If you’re asking them to invest 15 minutes to watch a video or to fill in an application form, that might feel right for them.
And here’s the thing, trust develops at different times for different people. So I stand up on stage, I give a keynote of 45 minutes to a crowd of people who’ve never met me before. One person comes up to me and says, “I want you to be my private coach,” and I say, “That’s $30,000 a year,” and they say, “Hmm…” yes or no, right? But some of them say, “Yes.” Some of them say, “Okay, that’s great. No problem.” And I say, “But you’ve only known me for 45 minutes. How do you know it’s right?” And they go, “I just know.” We haven’t even had a conversation, right? So it took 45 minutes for $30,000 worth of trust to be developed, right?
Then, I’ve been running a mailing list for probably five or six years as well. I’ll have somebody write to me maybe once a month and say, “Hey, Matthew, I’ve been reading your emails for the last five years. I just wanted to let you know I really appreciate everything that you do and I just bought your book.” My book is 99 cents or $3.99 or something on Amazon. So it took five years for three dollars’ worth of trust to be developed. So the ascension model is important, yes, but I don’t want to stick everybody into a funnel.
If someone walks up to me and says, “I loved your talk, I want you to be my coach,” and I say, “Wait, wait, wait, wait, wait. That’s great. But first, have you taken my survey and bought my $99 course?” I’m not going to say that. That’d be crazy. So yeah, I think the ascension model is really important, but I think we should consider it to be a…you can enter at any point, right? It’s a carousel, it’s a sales cycle, like Michael Port says, rather than, “You must ascend from one dollar.” If you’re ready to jump to the $30,000 offer off the bat, then you should do that.
Nathan to record: Thank you again guys for listening today! I really really hope you have loved listening as much as we have loved going back to the archives and putting these episodes together!
Please let us know what you would love to hear more of, we would love to hear from you!