How Justin Roff-Marsh has been in the business for 15 years and has seen many successes
Justin founded Ballistix, a management and marketing consultancy, specializing in Sales Process Engineering (SPE), which is a radical new approach to the resourcing and management of the sales process.
TOPIC JUSTIN ROFF-MARSH COVERS
- Justin’s company, Ballistics, helps re-engineer sales environments for technology companies and manufacturers
- The importance of a sales process for tech startups
- The concept of sales process engineering
- The difference between sales process engineering and traditional sales approaches
- The importance of a customer-centric approach in sales process engineering
- The role of technology in the sales process
- The benefits of implementing a structured sales process
- The role of data in the sales process
- The difference between a sales process and a sales function
- The importance of human intervention in making a sale for certain companies
- The challenges of managing a sales function and the importance of understanding and trusting the process
- The concept of “sales process engineering” and how it differs from traditional approaches to sales
- And a whole lot more
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READ THE TRANSCRIPTION
Bronson: Welcome to another episode of Growth Hacker TV. I’m Bronson Taylor and today I have Justin Ramos with us. Justin, thank you so much for coming on the program.
Justin: Thanks for having me.
Bronson: Absolutely. Now, Justin, you a unique person to have on this show because your company is not primarily a software company. So tell us, what is ballistics and what does it do?
Justin: Well, I can, I guess, empathize with software companies because we have a development team. It’s a small team. But, you know, I’ve had to figure out the hard way how to go about building software, and I’ve had to learn the importance of division of labor in software environments, the division of separate the the importance of separating testing from architecture and, and design and development from design and so on. So it’s taken us a while to, to get to the point where we have a big enough team to have that division of labor. And there’s been a lot of lessons along the way. But you’re correct, it’s not our core business. Our core business is building or more commonly re-engineering sales environments for generally two types of companies, technology companies and manufacturers.
Bronson: Perfect. We’re going to get into the details of what that process looks like in a minute. But first, I want you to talk to our audience because they’re primarily tech startups. And to be honest, they’re generally clueless about sales as a channel for growth. They like social, they like pay per click. So do us a favor and speak to the entrepreneurs listening and tell them why sales as a channel for growth might make sense for some, as you said, tech based companies, Internet based companies.
Justin: Well, I think it depends what you’re selling. If you’re if you’re selling something that requires a human intervention in order to make a sale or that benefits significantly from a human intervention in order to make a sale, then you have to recognize that those activities you mentioned previously tweeting and social media and so on, are subsets of a larger process called a sales process. So I think if you’re in the situation, you know who you are. If, if, if generating tweets and collecting likes on a Facebook page are not sufficient to make the cash register ring, then you need to recognize that those activities are a necessary but not sufficient ingredient in this bigger thing called a sales process, which presumably exists within a thing we call a sales function.
Bronson: Perfect. And that’s why I brought you on, Justin, because you might be the perfect person to bridge this gap between tech and sales because of the unique way you view sales. You don’t you don’t see it the traditional way you see it, almost like an engineer would see sales. And I think that’s going to apply to a lot of engineering driven startups. You call your approach to sales the sales process engineering. What do you mean by that? Break that down for us.
Justin: Well, I guess that means we engineer sales functions or sales processes. I prefer the word. I prefer to keep function and process separate. The the process lives in the function. Okay. But we engineer those sales functions as opposed to allowing them to involved, which is what normally happens. So not normally. What happens is, is organizations will cobbled together some sort of sales machinery based upon all sorts of myths and superstitions and, and, and as a consequence, management or the founder ends up with this black box that they don’t much understand and not much trust, but that they recognize they need or that their investors recognize that they need. So they put up with and begrudgingly write checks for and as a consequence end up with this sort of uncomfortable relationship between the sales function and the rest of the organization. Now, the appeal of social and online promotion is that is that that is all very scientific. So if you understand stats and you and you know something about process, it’s very, very easy to get your heads around online stuff. But, but as soon as we involve salespeople, the tendency is for it to be treated as a black box. And my central argument for years has been there’s no requirement to the fact that there’s people involved does not necessarily mean this whole endeavor becomes witchcraft all of a sudden. And there’s an enormous amount of science in the areas of production and and in the area of projects in particular that are particularly relevant and that can be brought to bear. I think if, if, if someone in your audience is selling something that’s reasonably expensive. So custom software, maybe custom mobile apps, for example, in more of an enterprise sales environment, you know, if you if if you think about that environment for a second, it’s easy to recognize that that environment is nothing more than nothing less than a project environment. It, you know, in that context, a sales environment is a project environment. So in that context, our advice is very simple recognize that and manage it like a project environment, which means automatically straight out of the gate. The minute we say project environment, we understand a few things. We understand that we need division of labor. We understand that we need to standardize workflows so we have a work breakdown structure. We understand that we need to have a formal approach to scheduling. We have a scheduler, we have leveling algorithms. We it’s important that we distinguish between those activities that sit on the critical path and those that don’t. And immediately there’s a whole bunch of of science, a whole bunch of engineering concepts that we can bring to bear. So the first thing to recognize is that if you’re in a in a in a minus sales environment, in other words, selling less expensive stuff, you should be adopting production engineering principles to the design and management of your sales function. And if you’re in enterprise sales, so selling things that are expensive or complex, then recognize that yours is a project environment and build it and manage it like a project environment. And if you have someone on your team who’s trying to get you to buy into a bunch of mystical principles that you don’t quite understand, it may well be that they’re better off on someone else’s team.
Bronson: Yeah. Now what do they want to dig in? Because I want to paint those two pictures really clearly for our audience, because I know about some of the stuff that you published online. I’m a fan of some of your thinking, but the people coming to this, I want to really make sure they’re clear about the difference in your model and the traditional model. So in the traditional model, you bring on a sales person and they almost need to be the guru that does everything and they are the black box in and of themselves. Is that right? They have to figure out the sales, manage the sales, be the point of contact for the sales, close the sale, follow up with the sale, whatever, anything to do with the sale you give to them and you just hope it works is fair.
Justin: That’s true. And founders, investors will often push them in that direction because they have their own pet ratios. They say, well, if you want to do revenue of X, you need to have Y number of salespeople. And there’s this misplaced idea that there’s a cause and effect relationship, a causal connection between adding salespeople and making sales. And that’s a gross oversimplification, probably almost a gross distortion of the nature of reality. Sure, there’s a correlation between salespeople and sales, but it’s more of a casual one. And if you approach the design of your sales function based upon a model that is that simplistic, it’s highly unlikely that you’re going to end up with anything that you’re going to be proud of at the end of the day. Yeah, unless you strike at Lucky.
Bronson: Yeah, exactly. And so you take what used to be one person, even though it never really was, they weren’t really doing it well, but they were supposed to be doing all these things. And you really what you call the division of labor, you segment out all those different tasks that they used to do as one person and you figure out a process. And so the sales person now is not having to do everything to do with the sales except maybe just the the final clothes or the face to face interaction or those kind of things. And so you say you figured out what the critical things are on the critical path and you come up with a process for them. Is that a fair way to kind of talk about your ideas on this?
Justin: Yeah. So our central idea is division of labor, which makes it which is pretty obvious. It makes a lot of sense. The challenge is figuring out how to do it and also figuring out how to divide labor as is pretty tricky. So that the trick where division of labor is concerned is to differentiate between what I call clerical selling conversations and everything else. And if you’re going to have a salesperson, you want to employ a person and have that person perform nothing other than critical selling conversations. And that might be on the phone if it’s an inside sales function or it might be in the field if it’s a field sales function. But the bottom line is that person does nothing other than critical selling conversations. So so it’s conventional to to group together. It’s conventional to refer to as selling everything that a salesperson does. But once you start to unpack all of the things that a salesperson does, if you look at each of those activities, you know, hold them up to the light and turn them around a little bit. You’re going to realize that most of them it’s not doesn’t make sense to characterize them as selling, you know, conceptualizing solutions, not really selling writing proposals. Well, that’s not really selling. That’s more like engineering really, isn’t it? Prospects for people to sell to? Well, that’s not selling either. That’s promotions. And of course, that’s where we need the the the online promotions, the online marketing activities. So so if you pick up those activities one by one, turn them on and examine them, you end up, I hope, concluding that there’s just one activity that your salespeople should be performing, and as a consequence, you end up redefining the word sales to mean critical selling conversations. Now, there’s an important distinction to make between critical selling conversations and noncritical selling conversations. I call the latter hustling. And the interesting thing about selling is if you take note of all of the conversations that you have with an individual or a company that you’re trying to sell to, probably 80, 90% of those conversations are noncritical selling conversations. In other words, they’re hustling. Yeah, it’s trying to schedule a meeting. It’s ringing. It’s ringing. The customer who said yes in principle and saying, Dude, where’s the order? It’s. It’s. It’s those conversations that are critical. It’s critical that they occur, but they they are not particularly meaningful where the content is concerned. So the first thing that you want to do is take away from the salesperson everything. That’s not a conversation. And the second thing that you want to do is take away from the salesperson, particularly if they’re a field salesperson, everything that’s not a critical selling conversation. Now, if you, as a consequence, don’t end up with enough conversations left to justify having a full time salesperson and don’t have a full time salesperson.
Bronson: Now it makes total sense. And, you know, you mentioned earlier kind of an analogy to this that I want to bring up again, just to really drive home the point. You know, these companies watching this right now, they’re development companies. They understand that there’s a design team or a designer, that there’s an engineering team or an engineer. They don’t usually expect the designer to be the engineer and to also be the CMO. They they.
Justin: Understand the.
Bronson: Labor. Yeah. They understand the design within the things that are comfortable understanding it. But then with sales, they’re okay making the sales, this unicorn that does everything when really that’s not realistic, it’s not practical, and it probably is going to work the way they want it to. But tech companies are so uninitiated with sales that that they can only do what they see. And that’s all they see usually.
Justin: Well, the reality is a little bit worse than that, that what I call the standard model or the go get em tiger approach to selling, you know, where you employ one or more salespeople, put them on commission and hope for the best. If you were to think of a particular profile of a person who was ill equipped to run that model, it’s probably going to be a developer.
Justin: Why is that? In other words, if you if you ran a big organization and you needed somebody to go out there and recruit and manage a salesperson, would you go into the development team and find a senior developer and say, Hey, dude, it’s your job, go and find me and manage for me a salesperson. So the odds are against you. If you have the type of experience and personality that’s conducive to identifying and managing salespeople, the odds are already against you. The odds of the go get them tiger method working in the long run a minimal. But if you’re a software engineer by trade, then the odds of you pulling it off are vanishingly small. And the damage that it can do to your organization is. Is, is. And this my my message is this far easier ways of building a sales function than the go get them tiger method.
Bronson: Yeah. And that’s actually a welcome advice because people have tried that and are frustrated or they feel like they’re the one that failed and they don’t understand why it works. Everybody else not knowing that it may not be working for everybody else either. Because of your view on sales and the process that you really put into play, it’s caused you to have a number of beliefs that run counter to traditional best practices. So I want to run through some of these and let you respond. So you don’t believe in hiring a salesperson as your first move if you decide to build a sales process? Why is that? Because somebody think, well, I’m listening to Justin. I believe what he’s saying. Let me go higher salesperson and they’ll put in this process. Is that a good idea?
Justin: Probably not. It’s not a good starting point. So let’s assume you’ve created a product or a web service or whatever the case is. And let’s assume that it needs human intervention in order to sell it effectively. Either either telephone sales or field sales. The first thing that you have to do is not to employ a salesperson. The first thing that you have to do is to figure out how to generate the sales opportunities that the salesperson will prosecute. And I and of course, the good news is that most vendors are well equipped to do that now. Now, it’s important that you go slowly here, because in the process of figuring out how to generate sales opportunities for your new product or service you have, validating that product or service. And if you can’t generate sales opportunities effectively or sustainably using online tools, you know, CEO pay per click, all that normal stuff, then the issue is not with sales, the issue is with the viability of your product, and it’s best to recognize that early and go and re-engineer your product, or at least go and re-engineer the offering to come up with something that is, you know, if you have a if if you have a moderately decent product, you should at least have beginner’s luck. But if you come out of the gates and you’re struggling to generate sales opportunities, then you’re, you know, dead before you get started. And to say, well, I can’t generate sales opportunities online, so I’m going to go and employ salespeople and hope for them to. All you’re doing is delaying the inevitable. You know, at some point you’re going to drown. You know, better to discover that sooner and fix it than to delay the inevitable or chew up investors money. And then find yourself in a position where salespeople kind of find people who want to talk to them either. So the step one is to build a machine that generates sales opportunities. Now, step two is, of course, to to step two is to to manage those opportunities. And managing those opportunities means, like in a project environment, performing a sequence of activities that will either convert those opportunities into wins or convert them into losses. Now, if it’s an inside sales environment, it’s a lot easier because those activities mainly consist of telephone calls, demonstrations, perhaps quotations, whatever the cases. But the sales will also consist of critical selling conversations. What you need to determine early in the piece is how many critical selling conversations per week is your opportunity flow requiring now if it’s requiring six or seven, which is probably likely in your first couple of years of being a startup, you do not need a full time salesperson because a full time salesperson has a capacity for inside to have 20 or 30 meaningful conversations a day and if they’re outside 20 a week. So if you can only generate six or seven a day, you do not need a inside salesperson. What you’re better off doing is having the founder perform those critical selling conversations. So get someone junior to manage the opportunity. In other words, to hustle the opportunity from one step in the workflow to the next and then have that person’s schedule for the founder, those critical selling conversations. Now you get a whole bunch of benefits from doing that. Number one, you avoid the cost and the enormous risk associated with employing a salesperson. But number two, in line with the lean startup methodology, you end up shortening the I guess the the innovation feedback cycle, thoughtful, for want of a better word, because you have the founder, it all of a sudden it’s become time effective for the founder to talk with existing or potential end users. And the feedback that the founder gets from having those conversations will be invaluable. Now, you don’t have to worry about whether the whether or not the founder can sell, because I don’t care how socially inept a founder is, all of them can sell by virtue of the fact that they were founder. There’s just this special magic. If the person you’re talking to on the other end of the phone knows that you started the business. You can be the most offensive person in the world and people will still buy from you.
Bronson: Yeah, that’s great.
Justin: Getting stories about Bill Gates begrudgingly going to a meeting with a potential client and this might just be folklore, but the story is he went to a meeting with a potential client and the CEO stood up and made a speech on his view of the world as he felt he needed to because he had a dignitary present. And at the end of the speech, Gates kind of woke up and said, That’s the biggest load of claptrap I’ve heard in my life. And maybe it never happened. But. But but it would have been cool if it did. Yeah. And the punchline was, they got the deal. And the reality is that the founders have a special ability to sell. So I don’t care how awkward they all have, uncomfortable they are, they can still sell and they should be doing those initial. The other benefit is you end up creating, you end up prototyping and a sales function that is going to be easier to scale because you have baselines established. You know, you know what the conversion ratio is from, you know, initial discussions to demos or from demos to proposals or whatever the case is. And you have a working prototype. So when you recruit someone, you can plug them into that system, you can watch how they operate and if they can replicate the founder’s results or something close to that, you keep them. If they can’t, then you get rid of them. And if you discover you have to get rid of them, which is not unlikely, then you’re going to make that discovery weeks after you employ them, as opposed to months or years after you employ them. Which is which? Which which tends to be the case with the go get em tiger approach to sales.
Bronson: Absolutely. Thank you so much for being so specific right there. You just gave great advice to anyone paying attention. So I hope they heard that another belief you have that runs counter is you don’t believe in paying a commission to a salesperson. Why is that? What is your view on commission?
Justin: So line, are you a developer?
Bronson: I’m a designer and my brother’s keeper.
Justin: Okay. So you’ve worked in design environments. Yes. So you tell me what would happen if you went into a design environment. Let’s imagine in this design environment, we had a whole bunch of people working together as a team. We had a traffic controller controlling traffic. And then we had we had our directors and we had the normal grist for the mill designers. And then we had copywriters and we had developers, you know, slicing the images and doing all that stuff. What would happen if you went into that environment and said, Look, we’ve got a really cool approach to to scheduling. What we’re going to do is we’re going to get rid of the traffic controller and we’re going to put everyone in this environment on commission, and we’re going to compensate them according to their all their volume of work. So, you know, maybe the number of mass clicks or the number of like straight lines probably or curved lines or whatever the case, let’s say we found some rational basis to connect their productivity to to their activity. So it’s not completely it’s not complete lunacy. So what would happen if we did that?
Justin: So for those of you who who like math, you know, the listeners who are engineers, you can do this really. You can build a really interesting model. You can build it in Excel. So you can build a model of any environment where you could where you have division of labor. Now, of course, whenever you have division of labor, by definition, you have this thing called dependencies. Meaning resource B is dependent upon resource, i.e. to get something done and and reality being as it is. You also have this funky thing called cold variability. So even if you build what accountants call a balance line, which means that in theory, every single one of the workers in your design team has exactly the same capacity on a day to day basis. That capacity fluctuates because people have days off or they, you know, someone puts poisons them with decaf coffee and their productivity drops or something. So when you combine dependency and variability, you end up with a model that is structured such that if you want to push the activation of all of the resources in that environment to 100%, the only way that you can do that is to allow work in progress to tend towards infinity. Hmm. In other words, if you have ten people in your design environment and all of them try and work flat out all the time, which they would do if they were trying to maximize their pay, what would end up happening is work in progress would climb towards infinity. In other words, they would keep opening new jobs until they ran out of new jobs to open. So you would have a massive amount of work in progress. Working progress would would explode. And of course, that would result in a whole bunch of quality issues. It would be starting work on stuff without knowing the specifications. People who should have been dependent upon somebody else to do work jumped the gun and done work for them. You’re going to end up with massive amounts of rework. Quality would drop through the workflow. Throughput would drop to the floor and everyone would hate each other. In other words, if we really wanted to come up with an insidious way to screw up that environment, putting everyone on commission would work just perfectly.
Justin: So exactly the same logic applies to sales for exactly the same region. If your sales function consists of the go get em tiger method where you promise a bunch of hapless individuals commission and send them forth into the wilderness to do battle. Then. Fair enough. The commission plan makes sense. That’s a pretty stupid way to design a sales function in most environments now. Most, not all. In some cases it makes sense for sales to be done by autonomous agents. You know, and a good example of that is resellers. You know, a reseller is an autonomous agent and they earn commission, they get paid on a piece rate. And that makes complete sense. But if you if you want to have if you want or need for your salespeople to be a part of a larger team, then putting them on commission screws up the integrity of the team as a whole. And that really, for anyone who understands even anything at all of that process shouldn’t be any great surprise. The only thing the surprising for me is that people push back as much as they do against the idea of eliminating commissions.
Bronson: Yeah, it’s hard to let go of sacred cows. I mean, it’s hard to let go of the only thing we know.
Justin: Well, particularly hard to let go of those sacred cows that have the most sort of tenuous connections back to reality. Because even in even in the organizations where we work, say traditional manufacturing companies, nutrition manufacturers, you know, when we say what when we when executives argue the case for commissions, they have all these lofty ideas that it’s going to reduce operating expense and it’s going to cause individuals to be more motivated and so on. And that’s their argument for commission. And you can expose the elephant in the room by asking one simple question. You can say, Well, in your organization right now, today, do you have evidence of commissions actually causing these desirable effects that you assume that they’re going to? And and I guarantee when you ask that question, you will get a deathly silence, because everyone believes, in spite of the fact, there’s no evidence. I think it’s something to do with belief if it’s bloody obvious, like the fact that the sun is going to come up tomorrow morning. That’s the that’s not a very it’s very hard to get passionate about that claim because everyone knows it’s true. But if you come up with something, it’s a complete load of bunk. Then everyone has to get passionate about it because then they’d really struggle to believe it in the first place.
Bronson: Yeah, well, that kind of transitions into the next segment, which is let’s talk about the effectiveness of what you laid out for us today. You’re saying on the other side of the equation, it’s not effective. So let’s, you know, build the case for which why what you’re doing is successful. What kinds of successes have you seen?
Justin: When I say not effective, I should I should call it less effective. There are cases where that go get them. Tiger makes sense. I mean, if you’re selling through agents, manufacturer’s reps or some sort of software equivalents, you know, software agencies or whatever the case is. And sometimes it makes sense to sell through agents. If your product is kind of a low profile product that the consumer doesn’t want to bother themselves with, maybe to have a plug in for SAP or something, you might have to sell through intermediaries. So in that case, you know, intermediaries are arm’s length agents. They are autonomous. They should be paid on a piece rate. So I’m not saying that the standard approach is flawed in every context, but in the case of a in the case of a technology company that needs to have a sales function, the go get them tiger approach or the autonomous agent approach probably isn’t the best place to start. It’s high risk and it’s dubious whether ultimately it’s going to be the best model.
Bronson: Yeah, thanks for that clarification. So what kind of successes have you seen with companies that have really put in a process like you’re talking about? And I know you probably can’t give away names of companies. I know that a lot of high profile companies hire you, but, you know, nameless. What kind of successes have you seen?
Justin: We we see a well, we’ve seen a lot of successes over the years. And we and part of that is because we’ve been doing this for 15 years. So you do anything 15 years, you can see some successes. Most of our clients are not hope. High profile companies for whatever reason. Our clients, and for the most part to be the lower profile ones, which doesn’t much bother me. Let me give you a typical let me give you a typical case. I’ve got a case study for you. You know, if I said an average client increases sales by 20% or by 30%, I don’t see there’s much value in that statement. You know, even if I gave you the range, there’s such an enormous variation. And I think that if we look at the organizations we work with so many times, their success or lack thereof is nothing to do with us. Their success is kind of predestined when they design the product and put the management team together. You know, if they’re in a situation well where an ill designed or poorly managed sales function is holding them back and we fix it, we’re going to see breakthrough results. But it’s not the case that we created breakthrough results. The reality is they baked success into the DNA of the organization when we when they built it and we simply unlocked it. So I’m very uncomfortable with quoting numbers because it creates this impression that we did it. And, you know, I will willingly take six. I will willingly take responsibility for the success or otherwise of ballistics. But I’m reticent to do that for other people’s companies. Here’s here’s an interesting case study. You know, we worked with a we worked with a company just recently that I think I might have told this on Andrew’s. Do you mind if I use the same case study as I use next door?
Bronson: Not at all.
Justin: Yeah. So. So this was a company that sold an echo service, you know, a few thousand dollars a month subscription. And it’s an interesting story because it shows how startups evolve. So the company had started off with the founder selling SEO services on a subscription basis. He’d written a book and had a good profile and he built a little team of operators helping him. So AdWords people in copy and a copywriter and a couple of other people. And he’d been successful. So what he’d done then was replicated that models and he’d added another team so he couldn’t add another founder. So in place of a founder, he added a person he called an account manager. And then the account manager built themselves a team of a copywriter and a designer and no AdWords person, and they were on commission. So they treated that second project manager, treated their little group of clients as, as, as a revenue center and the costs associated with that as a cost center. And they earned a commission on the profitability, and then they replicated that a third time. And, you know, to begin with, it was fine. But when they eventually reached the point where the business was collapsing under its own weight, there was chaos. By chaos, I mean, people were you know, people were arguing at each other. It wasn’t quite as bad as punch up punch ups and always. But it was tending in that direction. Yeah. And business development was a mess because these account managers didn’t have the gift that the founder had. And the founder was keen to grab all of the all of the accounts that he could that came from his speaking and so on, so that the poor managers will have to follow it around because they didn’t have the gift of the gab or they hadn’t authored books like the founder had tried to turnover was looking for people to sell to in between in between doing delivery. And, you know, so when we met them, we sat down, we had a frank discussion. It was obvious to me, and I think it became obvious to them as a result of the discussion that that craft shop model wasn’t going to be sustainable if they want to grow the business past its current. Point. So what? What we did was we got them to reconfigure the business and we turned it into a factory. So there was they were functional units, you know, AdWords, copywriting, design and so on. We took the we took the account managers and we left them managing accounts, but they would come back with work orders that were handed in. And those work orders were broken down into tasks and the tasks were allocated to the, to the various functions in the factory. I mean, we didn’t literally call it a factory, but that’s what it was. And then we had a traffic controller, a schedule, who managed the whole thing. Now the scheduling parts work gets interesting. There was no schedule in that organization at all. And central tenant where sales is concerned particularly with small companies as get well I shouldn’t say ten of the normal approaches. Get the founder and executive assistant. Have the executive assistant manage the opportunity flow, manage those opportunities, schedule all the critical selling conversations, and then have the founder just do the critical selling conversations. So we said, here’s what we’re going to do and we’re going to get the founder to do all of the critical selling conversations, and the founder is no longer going to manage any accounts himself. All of the accounts are going to be allocated to account managers, and they were kind of reluctantly okay with that. And we said, by the way, we’re going to eliminate commissions, which they weren’t okay with. I think one or two of the account managers left and a couple stayed begrudgingly, and one of them would be earning like $250,000 a year and they had to have a come to come to Jesus meeting with the founder and accept that their market value was not actually $250,000 a year. It was like $150,000 a year. So they begrudgingly agreed to take a pay cut because they didn’t have any choice. Yeah, so this is a lot messier than the work that we would normally do, but this business was just a lot messier. So the the end result. What was. Oh, and the traffic control piece is interesting. What we ended up realizing is when we counted up the number of critical selling conversations that were required for this organization to grow at a sustainable clip. Mm hmm. It was easily possible for the founder to do those critical selling conversations and have plenty of time left over to do unspecified entrepreneurial stuff and to do some general management of the business as a whole. Yeah, and not only that, but the executive assistant had plenty of time on her hands as well. So what we did was we turned the executive assistant from being just a sales scheduler to being asked to schedule for the business as a whole. Mm hmm. Executive assistant beside her had this massive whiteboard on the wall, which contained a schedule for the entire organization, including sales activities, and made it clear to the skids, to the to the executive assistant, the master scheduler, that there was a minimum number of selling activities that had to occur every week. And she was responsible for ensuring that come hell or high water, there was that minimum volume of critical selling conversations. And then the rest of her time was spent just being a traffic controller for this workflow as a whole. So the the account manager would come back from review calls with the clients, with work orders, the workforce would be split down into tasks, the task would be written up on work tickets, put on the board, and twice a day they’d move all of the tickets one slot to the left to indicate the flow of time, and they’d have work in progress meetings where they would review all of the tickets, identify what was likely to be late, and figure out how to escalate them. And all of a sudden, we had a little factory, we had order, and we had a we have a business that has gone on to scale quite successfully because all of a sudden it’s scalable. So that’s that’s a good that’s a good indication of the work that we do. In that case, sales wasn’t the constraint. They could relatively easily generate the sales that they needed.
Bronson: And we process, yeah.
Justin: We often go into organizations that are saying we have a problem with sales and we just know that sales doesn’t actually end up being a problem.
Bronson: Yeah, it’s almost like you’re doing four for sales, what, four did for automobile manufacturing. You’re just it’s it’s an overhaul. It’s a complete process. It touches every part of the corporation, whether they thought it should or not. When you came in. I’m interested in going forward.
Justin: Ford invented it. We haven’t really invented it. All we’ve done is copy it.
Bronson: Well, that’s that’s what some of the smart people do differences.
Justin: And the one thing we can take credit for is we weren’t silly enough to say we’re going to copy the status quo. Mm hmm. So it’s not like we said. Well, we’re going to collect best practice from around sales functions, because it was even if you go in typical sales functions and click best practice, it still looks pretty bloody ordinary compared to the way processes are designed and run in other environments. So our breakthrough has been to copy what other people are doing in sales and marketing. Copy production environments. Copy project environments. Yeah.
Bronson: And it follows a trend within tech companies that I think people watching this will realize, you know, lean startups that you mentioned earlier, they’re following, you know, the lean manufacturing, you know, out of Toyota. And so there’s there’s crossover between other disciplines and applying things in a new way and not just accumulating best practices within your own field. One thing I’m really interested about is your machinery for ballistics itself, because I know if this is what you’re doing for everyone else, that you have the machinery in place for your own company to begin with. And this is the kind of stuff people are interested in who watch this. How do you generate leads for ballistics? Because I know you said it’s not the salespeople going out and looking under rocks. It’s not the go get on tighter. So where you’re leads coming from?
Justin: Well, it’s interesting. We I had a very interesting experience recently. I moved from Australia and your listeners, viewers can probably guess that’s where I’m from. I moved from Australia to the US because we was building a business here that was going to be well and I also wanted to live in the US, so I grabbed the opportunity and emigrated here and I came from an environment in Australia where ballistics is well known. I wouldn’t say we’re a household name, but if you were to interview probably ten businesses and say, Have you heard of ballistics, probably six out of ten are going to say, Yes, we have because we’ve been around so long and we’ve been so visible for so long. So I came from there to this environment in the US where there was a half dozen people who knew where we were out of out of, you know, I don’t know, five or ten or 15 million businesses or whatever the cases. And so it was a real shock to the system because in Australia, you know, if we’re running short of sales opportunities, we send an email blast, we say we’re running a luncheon loan and we have, you know, 30, 40, 50 people show up in three locations with negligible effort. You know, we have we have put any effort in. So when we came here, we discovered that our tricks from Australia didn’t work here because we didn’t have a reputation here. So we had to go back to basics and we made some terrible mistakes. The first thing that I did was I said, Well, we got to do things the American way because we’re in America now. So we, we. Hired an expensive PR agency out of Boston who were very clever. And to this day, I don’t know why it wasn’t more successful. And we also booked to attend trade shows and exhibitions, the length and the breadth of the US. So I spent an entire year lugging around a presentation kit, you know, with the banners and the little desk and everything until it literally fell apart a whole year lugging this thing around. And we didn’t get any benefit whatsoever from either of those initiatives. And you add up those initiatives, they cost us collectively hundreds of thousands of dollars. The breakthrough for us, not surprisingly in retrospect, was was online. So though the way our process works and the reason I tell that story is to show that we’ve we from a sales perspective, you know, we’re a startup all of a sudden the breakthrough. I did some experimenting with pay per click, and the breakthrough was LinkedIn. The first breakthrough I realized was LinkedIn ads are extraordinarily cost effective, very responsive. But the great thing about them is you can target exactly the individual you want to talk to. In our case, senior executives of certain types of businesses. So we started off giving away content reports that we hastily assembled. And then I was in the process of writing a book at the time, this one here, The Machine, and I’d written the first few chapters, and I think I’m one chapter away from completing it at this particular point in time. But but back then I’d written the first three chapters, so the idea that I had was, rather than giving away reports or white papers, what if I took the first three chapters and turned them into a sample of the ultimate book and give that away? And the advantage of doing that is it looks just like a book. So we we were I wrote an ad offering the book. They created a landing page that makes it clear that it’s a sample of the book. There’s a little video of me holding the book spoken. You type in your details and we’ll send you in the post to copy this book. And that was a breakthrough for us. You know, with with LinkedIn giving away that extract from the book, we can easily generate 50 to 100 well, we can easily generate 100 plus book requests a week. Well, easily. Now we’re always throttling back because we just don’t. We have limited capacity to handle them all. But so that’s where we so we one link we pay per click LinkedIn advertising in Australia, the UK where we recently launched and in the US. Yeah. And that really generates all of our sales opportunities except for Australia where we continue to do other things because we can, you know, physical London on events. Yeah, we used to, we used to channel those sales opportunities directly to. I have an executive assistant who lives in Chicago. I’m Charlene who’s very, very capable. She manages all of the open opportunities we have at any one point in time. We have about between about 150 and 200 open opportunities. So that’s a huge amount of work for her to do, managing all that. But that that queue of opportunities yields a fairly, from my perspective, a fairly maintainable flow of critical selling conversations. So I did two types of critical selling conversations. I do conference calls, which I do here from my office in L.A. and then as part of our sales process, we sell an on site workshop which clients pay for. So I’m either doing initial conference calls from from here in L.A., or if somebody buys a workshop, I’ll get on a plane and fly to wherever they are and run a workshop on site. And out of that comes a proposal for an ongoing service. And then Charlene will follow up to determine whether they want to pursue or not. So that’s basically how it works. Yeah, the front end we use to feed those sales opportunities directly to Charlene, but Charlene just couldn’t handle the volume of them. So what we’ve done recently, which works really nicely, is when somebody goes to the landing page and requests the book, they they get added to an auto responder just using a welder. Yeah. And, and they get a series of about ten or 12 emails encouraging them to book a best practice briefing, which is that initial conference call. So that first part and they use time trade, which is one of those calendaring type services to book it. So that first part is entirely automated up to the best practice briefing. And then when someone’s requested a best practice briefing or if somebody actively engages with us, you know, sends an email and say, Can we short circuit this process? Then then Charlene will create opportunities and CRM and manage them through.
Bronson: Yeah, that’s perfect. Thank you so much for walking us through kind of your own machine for your own company. It gives us insight into how it really works for you. Just Justin, this is.
Justin: It didn’t start out that way. The way the machine thought it with with us was us spending bongo bucks on here events and getting sweet. F.A. Yeah, and also consisted of me flying. All over the US every single. So when I first moved here, I used to get on a plane on Sunday night and I’d fly east. Obviously I live in L.A., I watch my flying west, so I somewhere east, you know, I’d fly to New Orleans, I fly to Chicago, I’d fly to New York or whatever. And I’d spend the whole week traveling around. I’d do a day’s work in Chicago and then maybe two days work in Atlanta. And I did that every single week, and it’s killed me. And then gradually we’ve experimented and we’ve discovered so much stuff can be done by remote control. You know, I will never do a face to face meeting now unless it’s a formal workshop that someone’s paying for, because I’ve discovered it just doesn’t make sense to. But these discoveries didn’t happen automatically. Now, the the reason I’m telling you the story is that I’m the founder. Mm hmm. And I was able to spot this stuff. If I employed a salesperson and pay them under $90,000 a year. They kept flying around the country for ever.
Justin: You know, and so you have agility. And this plays into the lean methodology. I guess you have agility when you’re the founder doing this stuff. So first go around, you know, build it yourself because, you know, you have this critical thing called a process of ongoing improvement. Mm hmm. In the beginning. In the beginning, the rate of change is huge. And then over time, the rate of change starts to level out. Once you have proven systems you know are important that the founder has a hands on involvement. Now, the objection is, well, I’m not a specialist. And and my response is, well, that’s why you should have a hands on involvement. If you employ your first QE engineer and you galloper. Is it necessary that you do QE in order to get that function developed? Probably not. Because you’re familiar enough with the lay of the land that you don’t have to roll up your sleeves and do it yourself so you can employ a QE engineer. You watch carefully what they’re doing, look how they interact with the rest of the team, look at each as they are implementing and you can know that it’s going okay. But if you’re a founder, if you’re a software engineer by trade and you’re looking to build a sales function, the idea that you can employ someone and and and replicate the QE type scenario, it’s just a fiction. It’s not going to happen. You’ve got to do it yourself.
Bronson: Yeah, absolutely. Well, let me close with a couple of questions for you to kind of recommend some stuff for us. Are there any resources or any materials that you think are startup entrepreneurs? The CEOs we’ve been talking about should be devouring any books, blogs, hold up yours. There’s the first of all.
Justin: So, I mean, the two things people people want to request this book so they can go to four appointments a day dot com. So that’s for the letters, not the digits for appointments a day dot com and quests. This book was an extract from the book. Now there’s a couple of benefits of doing that. Number one, you get sent the book. Number two, you’ll get you’ll get you’ll end up on my blog, which is sales process engineering dot net. And in fact, at the time we were recording this, all but the last chapter have been written up on the blog. So you can join thousands of other people who’ve been reading the the chapters of the book as I post them to the blog. So that’s a good starting point in terms of reading other things. I’m a big fan of the The Crossing the Chasm series of books like Everyone Else is in in in Southern California or in California. I think it’s worth reading Al Lewis and Jack Trout on positioning. And, you know, they’re probably the marketing resources. The big one, though, is I would read the go here. Yeah, there you go. I would beat the goal. So if there’s one book that’s going to change your life and if you’re interested by the comments that I had about, you know, trying to model an environment where you have dependency and variability, you go and read the goal by by Eliyahu called rat alley gold rat. It’s probably the the best read business book of all times it’s normally read more by manufacturing types than by it by by software engineers. But I’ve recommended it to hundreds of software engineers and they they love it. It’s a story of a fictitious plant. It’s told kind of like Atlas Shrugged. It’s told as as if it was a fictional story. But but the content is absolutely nonfiction. So. So if you do nothing else, read the goal and then listen to this interview again. And a lot of what I said will make more sense to you on the startup stuff. Of course, subscribe to Mixergy, but I’m sure everyone does that already. What else? I like Kevin Rose’s article. Interviews, too, from Google Ventures. Um, but that’s a that’s a that’s a good starting point. Don’t worry too much about selling techniques. I mean, if you’re a founder and you’re in a position where you have to go out in the field and do appointments, you know, there’s this big debate about different selling approaches. There’s consultative selling versus in Australia, someone wrote a book called Wombat Selling. I don’t have a clue what frickin wombat selling is. Not don’t much care I just think doesn’t matter where. Look, whether we’re talking about consultative selling spin Herman Miller or the original. How to Master the Art of Selling By. What’s his name? I forget his name. Tom Hopkins. The one thing every single one of those books had in common, if you read them, is every single one of those books starts by arguing that the traditional approach to selling is fundamentally flawed and this approach is different. But you know what? None of them are different. They’re all the same thing. The spin selling people make a big hoo ha about it because the scientific it’s not scientific. It’s a study in correlation. There’s no causation in that book anywhere. In fact, the author makes a mention of that apologetically in the in the in the afterword. It’s I mean, I’m not saying it’s bad thing. It’s a bad it’s bad book. It’s a good book. The content is good. But it doesn’t matter what you read with selling techniques. Concern, just read something. Yeah. You know, I started in sales. I was more of a geek than a sales person, so I joined the first Masters Club and I read How to master the Art of Selling and I read a whole bunch of stuff. It doesn’t matter what you read. Yeah, that my messages, the selling techniques and the issue if it comes easy for for founders anyway, focus on building the infrastructure, right.
Bronson: Yeah. Well, let’s end right there, because that is a great piece of advice to end on. Justin, thank you so much for coming on this program and I hope people watch this interview over and over until it all makes sense. If only half of it made sense, then rewind and watch it again. And when it all makes sense, you’re in the right direction. So thank you so much, Justin.
Justin: Thank you very much.