I Doubled A Business in 60 Days to Show It's Not Luck (Part 1)

I have 13 portfolio companies and I just doubled one of them in 60 days by solving five key problems and what I'm going to do is show you the data of what it was before why it was wrong what we fixed and what happened after enjoy three young Founders who are all sad because they were not making the amount of money that they wanted to make so before I show you the data let me explain what each of these terms actually mean so show rate is the percentage of people who have an appointment who show

up for their appointment so in any business if you deal with people you will have sessions or appointments you have a time slot that someone says they're going to show up right if it's a sales consult then they are a prospect and they're going to show up to get sold so if I have 100 people who have an appointment and 70 show up that would be a 70% show rate the second one here is offer rate which we forgot to put in the rate so let me just put that in for you there you go

offer rate which is the percentage of people that we actually make an offer to you might be like well why would I not offer everybody well not everyone's qualified and so for example if I work with only gym owners and somebody comes on it's like Oh I'm a personal trainer well you shouldn't be here we had all these other things that said don't be here but you still came why are you here that means that you don't offer them anything and that's it now if 100% of people who showed up show R you were able

to offer to then that means that your offer rate would be 100% And that is an indicator of the quality of the lead flow that you have the third is close rate this depends on how you can track this all right so you can either do it based on percentage of people who show or you can do it on percentage of people who are offered what I normally do is I'll just track both I'm going to guess that this one is off of offer rate because it's what we have here it's good to have both

stats here because let's say a Salesman wants to artificially increase his close rate well then he will just say well I'm not going to offer anyone unless I know they're going to say yes and so then their close rate's high and then they'll show that there's really low quality score but if that salesman this is why having team stats is so important and individually is because if the team is all saying that their offer rate 70 and one guy saying is off rates 30 but he has 100% close rate and they all have 30% close

rates we know where the data went and this is why having high quality data allows you to see what the problems are if I didn't have this percentage then I wouldn't know it's because we have low quality leads or because my salesman suck this data allow allows me to identify the problem and then fix it so the fourth set here is percentage of cash collected up front meaning if we're selling $1,000 widgets and the average cash we collect today is $500 because people do payment plans then we would know our cash collected percentage would be

50% if I have a low close rate at high cash collected percentage that would tell me a different story than a really high close rate and really low cash collected percentage I'd be like oh so they're just getting anyone to say yes and taking $10 down if they can versus somebody saying we have a hard line and so it's really trying to find the mag between these two and saying how can I get as many people to says and get as much cash collected up front the final one here is just unit sold and this

is really just the output of these four if we multiple these things together how many do we end up closing and that's the result so beforehand damn we had a 49% show rate so let's say we have 100 appointments now we have 49 who actually show up for their appointment and then of the 49 we're able to offer 83% of them beforehand so 80% of that is 40 40 people now are getting offered out of our original 100 appointments of the people who get offered 27% of them which is 10 people roughly are actually buying

in that closing percentage and then our cash collected from those 10 people is we're getting a little less than half of the cash that we closed down now I gave you 100 as a number but the actual number of units sold for this business in the prior month was 56 units all right so this is current state if you don't know these numbers in your business you should so that you can improve them let's say I invested in your business today the first thing we want to do is get the data so that we can

see what Baseline is so we can see where the discrepancies are and where we think the biggest opportunities for improvement are and you're going to have to wait till the end of the video for me to show you what happened after so let's start with problem number one or opportunity for improvement number one we had a low show rate as in based on our benchmarks of 70% for any kind of appointment type business we think that we should have at least 70 there Allen which is a company that I had all we did was show

rates we were doing 4,000 appointments a day we experimented we had a machine learning team to think like what was the number of communications that we had to have with a prospect what was the delay between responses that got the most people what were the total number of exchanges how far apart were the exchanges there is lots of data that we were able to collect so their number was 49% of appointments were showing up what we wanted them to be at was 70% this is our Benchmark where we'd say okay this isn't a problem anymore

now do we want to improve things absolutely but where are we going to allocate our effort at the constraint this was a constraint now to give context here this Delta is a 40% difference 40% is a lot think about the S&P 500 they're like we trying to grow 9% a year it's like boom I unlock that I get 40% growth I don't have to do anything else for like 4 years in the S&P big wins that's what we look for lots of things can affect show rate by the way the number one one that affects

sh is number of total time sits you've available take that to the bank but one of the other ones is the targeting and the offer itself so targeting is who's actually seeing this promotion if I'm targeting teeny boers for example I might get people to schedule but then realize that they're not here for a laser hair removal appointment so the targeting there would be off and so that would affect our show rate and that has nothing to do with our lead nurture sequence or our salesman or anything like that it's just the wrong people were

seeing it so that was issue number one for context for us just imagine that's underneath it was 25 to 35 year olds who were gainfully employed and love their job and this when we came in to look at it was actually targeting 18 to 24 year olds the reason that this was far off for us is that the ad objective now I'm going to get a little bit tactical with you ad acis.com at holdco we have media buyers we have Pros who do this for a living and so when they zoomed in on how their

media buyer was optimized the traffic they were optimizing against what a lot of people would initially think they should do which is optimizing for the lowest cost leads and the lowest cost appointments what we had to do we switch to optimize around cost per sale if we can optimize around who we actually sell to we will shift where the sales come from and just to give you how big of a problem this was they had to cancel 75% of their appointments before the 49% show rate the sales guys are spending most of their time just

looking at their appointment looking up the person cancelling to get their 49% show rate and that's about the closest thing to literally burning money so the second big problem was multitasking and this really goes for any role but especially like sales-driven roles they had a setting team and a closing team and the Setters were both trying to call leads to get appointments and then also nurturing and doing the followup to remind them of the appointment and as similar as that may sound in your mind it's two completely different activities you're banging phones calling people up

you're in that flow and then you're like oh wait Sarah has an appointment today let me go mind Sarah do Sarah going to shup it and then you're like wait I'm calling and then you start like and it's you go back and forth right so they had three big issues number one is that they weren't double dialing right which is one of the most common things that you can do by the way if you're doing phone calls because a lot of initial screens will stop the first call but if you dial twice you'll get through

number two is that the time to contact was too slow so lead would come in and they would just like sit there for 30 minutes 60 minutes an hour 2 hours 3 hours right and they weren't getting contacted it's like what did this person do they're like oh I'd like to find out more information nothing and the third thing is that they didn't have the right time to set appointments and they weren't nurturing correctly so we go same day next day I'm just giving giving you some secrets and they didn't have mning of nurture meaning

if you have an appointment today and you booked this appointment 3 days ago if I don't remind you that day that you have an appointment the likely that you show is lower and so these are the problems that they have no double dial slow speed to contact and they didn't have any mning of nurture but wait there's more the second problem they had or opportunity for improvement was that they had a low close rate and this is based on our Benchmark I would normally give you a kpi but it has so many different variables in

terms of what percentage close rate is cuz if you're sell in in person for example for a low ticket thing you might be able to sell 80% plus of people walking the door on the flip side if you're selling an investment opportunity over the phone on you know a first or second contact you might sell 5% but for this particular type of sale that they had which was a two call close for like I would say a mid-priced consumer service in my opinion they should have been about 40% so 40% is what I wanted them

to be at and then current was 27% so this is where they were this where we wanted them to be and again for context here this is about a 50% % Improvement so problem number one is that they had service level Discovery if you're not familiar with that terminology in a sales script there's different kind of phases that you go through in a conversation and the opening part is often a little bit of Rapport and then right after that you get into Discovery Discovery is where you're discovering what the problems that the person is going

through you're trying to understand why they are where they are why they're on the phone with you why they decided to take time out of their day why this problem is important to them what they've tried in the past etc etc right this is the Discovery this gives you all the ammunition that you're going to use at the end of the sale to close it so the way that they were doing was simply saying how much money do you want to make just asking the one question which is the big obvious question it's surface level

but the big thing that you always want to ask when you're selling is intention why do they want this like what changes as a result of this how will your life look different what can you not do now that you would be able to do as a result of this change who else in that in your life would that affect why does that matter to you right and so these are all why questions and it's to to dig up their intentions because if you can understand why someone's there it's much easier to get them to

agree to getting them there right but if you don't know that someone's trying to let's say replace their income versus quit their job versus just have side hustle money those are very different intentions if I want to talk to side hustle money I'm probably not going to be like this is going to take a ton of time on the flip side if someone's like I hate my job I just want to do something that's not this then I might talk about what the day-to-day looks like in this scenario and ask them if that sounds better

to them so if you think about sales process what they were doing is they were asking questions that were here surfice level but this is where all the meat is and that's where all the money is is the questions that are below the surface is understanding why someone's even doing this to begin with look at that Iceberg killer Iceberg and so the second issue is that they had a lot of objections coming up on the call I'll say objections but I also mean obstacles for those of you who are sales sales senses objections happen after

you talk about the number obstacles happen before you talk about the number if you come on the phone and I say hey why are you here and you're like I just want to find out more information that's actually an obst obstacle like you already have to confront that cuz like no you're not hopping on phone calls all trying to find information what problem you trying to solve and then they're like well and then you get into it right but if you don't address that up front it'll blow up on you in the close so objections

and obstacles is what they were encountering a lot of and part of that is because their Discovery was wrong right they were talking to service levels so then lots of was blowing up on them in the close common objections that happen after you present price is uh this is too much I need to think about it I have to talk to my spouse I'm not sure if this is for me I'd like to get more data can you send me a brochure like these are all just to make believe things that people will say in

order to not buy from you interestingly a lot of times if you stay in the surface level they'll even give you what we call Smoke screens but basically like they'll just come up with uh a reason that they're not going to do it and it's not even the reason they just throw a smoke bomb up and they're like I don't like English you know walk away right has nothing to do with it they just want to get off the phone so those are the two issues that we had on the sales and that was getting

us to this 27% close rate and what this looks like is lots of argumentation and like hard closing and it's because the sales n positioned properly and they were basically talking at people and not listening if the salesperson is talking more than the prospect in your sales like these are likely issues that are coming up I'm going to give you two examples real quick to show you how important delivery of a message is so if I say I have to think about it and I say oh like what are your main concerns or what are

the main like what are the main variables that you're considering you're not thinking wow this guy's a douchebag I sound like I just genuinely want to know I call it childlike curiosity I always cue it by tilting my head I'm like huh what are the main things and I would increase my voice at the end there an improperly trained salesp person might be like well what are the main concerns you have and all of a sudden that sounds like a very different thing so they're saying the script but they're not but the prospect isn't hearing

the same message and these are little details that actually can make a huge difference in ultimately how you close there's a lot of things in tone but I'll just say one is how you raise or lower your voice and the second is where you choose to emphasize if I say I didn't say he hit his wife if I say like that I have neutral Tone If I say I didn't say he hit his wife then it's like I'm not saying that I didn't say he hit his wife is now saying that like those weren't my

words I didn't say he hit his wife he's the one to question I didn't say he hit his wife means like he might have done something else but he did something to his wife I didn't say he hit his wife it could have been somebody else's I didn't say he hit his wife it might have been his kid right and so it's the same sentence but simply emphasizing different parts of it communicate different things and so the tone and emphasis create a altogether package of how we communicate and for them their tonality was way off

as a team because they were missing the first 5 minutes of disc discovering and setting the frame properly and so I'll give you the last set of problems opportunities for improvement and then we'll dive into what we did to solve them and what happened sales problem three opportunity for improvement people in orc structure issues so issue number one is that CEO was the sales manager and that was because he was the best closer he had a significantly higher close rate than the rest of the team but he wasn't a very good sales manager even though

he was a good Closer by the way that's one of the main issues that a lot of sales teams have they promote their best closer as a sales manager and often times those are two very different skills and we could see this because the churn on their sales team was through the roof just to be clear like they were a group of young Founders it's not uncommon it's actually probably very common because usually when you start a business learning how to promote and sell the product is usually the job of the founders like how do

I get people to want to buy the thing and so they end up getting the most reps early on and also understanding the prospect better than just about anyone and so one of the big things you guys are in little mini sales last Su today is that companies will over educate on the product and under educate on the prospect the person that you should be educating your sales stuff on is who we're talking to more than what we're selling cuz for me if I know someone deep in their core what their intentions are I can

tell them anything I know someone inside and out and then someone says sell this thing and I know nothing about it I could probably get them to buy on the flip side I know everything about this thing and I don't know who I'm talking to talking to a child a man a woman old young different language and so a lot of people talk like hey sell me this pen when in reality what we want to do is like talk to John the majority of good sales train trainers who try to do that gimmick what they

want the person to do is ask them a question it actually has nothing to do with the pen and so if they say sell me this pen what you do is you take the pen and you put it in your pocket and you say how's it going what brought you in today right cuz I got to go from where they're at to wanting a pen I'm not going to just be like hey buy this pen give me money like it doesn't work that way but bad salesman do so the second issue was the setting team

expectations one of the benefits of working with someone who has more experience is that we know what the Benchmark should be and so a lot of times we can reset someone's minimum standard and they're like well they're setting two a day and we're like they should all be minimum setting three and that sounds tiny but again two to three is a 50% increase in sets and that's across a whole team so that means a lot of productivity but if you set the bar low people will just naturally shrink down to that level all right so

you understand the problems and here is the data this is before they had a low show rate issue they had low close rate and multiple issues around that and they had people and organizational issues so I want you to pause real quick in the video in the comments to be like what would you do how would you attack these issue if this was your business and then I'll tell you what we did now there's two elements of solutions element one is what would you do to attempt to solve the problem and the second is which

one do we do in what order the third problem that was actually the first thing we decided to fix was that we hired a sales director the reason for that was because the CEO was overly involved he was micromanaging he wasn't a good manager and he also wasn't doing CEO stuff and so we had to hire an experienced sales director who in this instance had been a sales trainer for a similar type of sale in a consumer good this guy ended up being exceptional in being able to implement the rest of the changes that we

outlined so this was in terms of order of importance I think if we hadn't done this and had tried to do the rest of them it would have fallen flat this is like one of the most common errors that business owners and Founders make is that they see the what and not the who or they focus on the how and not The Who and if you have the same problem that has recurred multiple quarters in a row in the same Department underneath of the same who it might not be a what issue it might be

a who issue one of the reasons having experience is helpful is because you know what it looks like when it's right some of the biggest costs in the business are hiring incorrectly you waste the time trying to find them you waste the time onboarding them and trading them and then you waste the time of all the time it takes you to figure out that they're not the right fit and all the loss growth that you would have had to then start that process over again that's tough but a lot of businesses have to deal with

that which is why picking Personnel is so important with this instance we looked at culture fit which is like do we think that this guy will fit in which we usually the founders pick that part out like hey does this guy fit in cool and then we're going to hardcore drill on usually experience and tactical knowledge and so we have subject matter experts at holdco media buying cro experts sales experts Finance expert whatever and we will then do tactical interviews we talked about earlier you can know that someone is good based on the quality and

quantity of the data that they collect I would ask somebody what data do you plan on collecting and how would you plan on fixing those things based on how vague they are and how high level they go in terms of their Solutions it'll tell you how nuan they can be in their thinking and ultimately executing Solutions sales director specifically in my experience when I have guys who are like I just want to build up people I want to give these guys skills and they marry that with like and these are the metrics that I track

to know X Y and Z that's a good sales director the next thing we decided to solve boom was fixing the ad targeting and the reason we did the sales director first was because we're like well how do we know if anything else is going to happen afterwards if we fix this so what we ended up doing here it turns out is that we also had another Personnel issue the media buyer was asleep at the wheel they were optimizing around the wrong stuff they were trying to split their attention and start their own side hustle

it was clear that they were negligent they actually were doing the right thing and then they stopped doing the right thing and it was clear that that type of behavior the founders felt was not going to correct itself so they let go of that person hired a new person and boom fixed the ad targeting problem we were back to 25 to 35y old people who love their job what did we fix next boom We reduced the sales team what and we reset expectations for the setting team what we looked at is sales team utilization if

we know that guys can take 10 sales a day and they're actually only taking four then we have too many salese in this instance it gives you an opportunity to cut the fast for lack of better term and reward the people who are actually doing their jobs and closing well if you cut the lowest percent of the team and you have utilization like you have space you lose the lowest closing percentage people and you gain more closes just by Shifting the closing rate overall of the team when you make those changes in my experience sales

people get into a rhythm if you don't take enough sales calls you're too desperate to close the deal and then you start being too hard and not listening enough cuz it's about you not them when sales people have more and more consult they sell from the back of their heel they're open-minded they're asking questions they're feeling good and they get in a rhythm the setting team we both downsized and increased expectations how did all these sales increase by having fewer people we had better people that's how and that also helps recreate the culture of the

team so that we can have a new standard set of high performers because there's nothing that demotivates a high performer like a low performer who's still on the team and so we went from two to four in terms of our expectation per day for the team in terms of sets sales fix numo qu I'm messing all my columns up now just going to have to deal with it we promoted one Setter to lead nurture specialist I was saying earlier that they were multitasking right so they're doing some setting and they're doing some lead nurture and

that gets really hard for a team of six guys to split those things we took one of the Setters who was really good and made that person the lead nurture specialist who basically acted as the bridge for both the setting team and the closing team to basically coordinate and remind the people of their appointments and we equipped that lead nurture specialist with one of our checklists for what that role needs to do to get the most people to show up and I'm not going to give you all cuz a long check list I'll give you

two quick examples one of them is doing a three-way intro once you have the set appointment between the setter and the closer and doing it via iPhone if you can because now you have a known person and an unknown person and a person that Bridges the two they might know show on Johnny over here but not on the guy that they just spoke with and so the idea is how can I bridge that Gap and kind of make the association for them add some trust the other thing is that the closers morning of would remind

them with either a voice memo or a video text personalized to them being like hey John really excited for our part today I saw your profile XYZ personalized to you I'm really pumped for I think we might help you out so that's just a couple of the things that we have on that list that we had them Implement and all do consistently and sales team fix number five boom is we optimize the sales scripts I said earlier that the discovery was to surface level so we rescripted the discovery made sure we were asking deeper more

meaningful questions and a part of that is also bringing some of the objections to the front it's much easier and this is the this is the terminology that our team uses which is killing zombies right it's a lot easier to kill a zombie when it's far away than when it's on top of you if somebody's trying to bring up a zombie in the cloth another way of saying it is like you want to diffuse the bomb before it goes off in the clothes in your face so we solve the problem before we bring it up

now this is actually something that we added to this part of the script which is prior to the appointment we say hey is there anyone else who' be required to make a decision about this thing if they say yes then you say cool well let's push back the appointment let's get that person on that way you have all the decision makers present so these are just little things but like little 1% improvements over and over over again is what yield these 50% boosts and the third main change we did was that we drilled the team

on looping and looping is just a sales terminology for basically when you encounter an objection handling the objection and then asking again handle the objection ask again right because a lot of salese are afraid to ask if someone says no and they don't want to ask again right and I can tell you this is that the number of sales you make is direct proportional to how many times you ask there's ways to do it wrong and there's ways to do it right the idea is that you should be able to resolve the concern right so

if someone says I need to think about it and you say well what are your main concerns and they say say well it seems really complicated you say oh what part specifically feels more complicated they're like it's the whole Tech thing and we're like oh we also have a vendor that can actually fill that in I think it's a couple bucks extra but like we can just handle that for you does that solve the problem and they're like oh okay so you guys will you guys will just hand that one part of it like yeah

we hand that part of it for you cool now this is where the salesman says great you want to move forward you have your idea on you hey what card you want like you can just make the ask right after that and so then at that point you might say ready to move forward then and they might say this feels like a fast decision it's like oh well what makes it fast how long you been thinking about this they're like well I mean I just met you and you say well how long have you wanted

to solve this problem and then they would say well I mean a long time it's like well then doesn't sound like a fast decision at all it sounds like you've already made the decision a long time ago that you wanted to change now we're just acting on it so now do you want to move forward right keep looping and continuing to resolve the concern ask again resolve the concern ask again drum roll please what happened in the real world so let's go to the data all right so in our first column we had 49% sure

rates after we implemented sales fix 2 fixing the ad targeting sales Fix 4 promoted one lead Setter to lead nurture specialist and sales fix 3 reduce the team size and reset expectations survey says we had a 70% boost which is almost exactly the kpi and that's because when you do things that work they work so that was a 40% Improvement in sales and to be clear this was just over 2 months all right so some of these Chang is going to happen real quick if you know what you're doing the second change we have is

our offer rate and so here's what happened survey says 80% we actually offered just about the same amount of people realistically what they were doing is offering people who weren't qualified cuz the sales team wanted to eat and I get that like there's a human component here they were offering people were not qualified the deal cuz they needed commissions right which is what we were trying to fix with the targeting close rates we went from 27% in 60 days later we were at 41% so 1% above our Benchmark all right this is a 50% Improvement

in sales so 40 and 50 Kazam next up we have percentage of cash collected a really good metric for knowing how strong the sales team in is and this is especially important for that early Discovery portion and how good they are at looping and closing because the deeper you get the discovery the the more convicted the buyer will be about the solution and the more likely they are to pay UPF FR as a measure of their conviction in the solution the survey says we went from 47 to 82% so we almost doubled the amount of

cash that we were collecting UPF front per sale in 60 days we had a 40% Improvement and we had a 50% Improvement and we had a almost doubling of cash collected so if we almost doubled the amount of sales that happened and we almost doubled the cash up front collected what did we do to the cash flow of the business forx ah much more enticing after we added all these four changes together and we waited 60 days what happened survey says we went from 56 to 93 sales a month and that was just from a

few of these fixes on one particular part of the organization and you might think after we made all these changes that we're done we right off into the sunset but wait there's more there were even more problems in the business on the product and customer success side which we will get to in the next video