The Culling of the Non-Professionals in Sales

In this episode of the Market Dominance Guys, Chris Beall and Corey Frank continue their conversation with the coauthor of Outbound Sales: No Fluff, Ryan Reisert. Chris shares a view that is a bit unpopular but rings true. He states that this pandemic will civilize our society. This is part of the civilization process that by matching the need to the capability of a solution, it will be done without lying, tricking and pushing. It’s a big honesty bath that will cleanse a lot of us off. Corey dives into the concept of a repeatable process of leadership versus luck and leadership. Those scale much better. For a guide and how to come out of this restructured sales environment with everyone working from home, join Chris, Corey and Ryan for your tips for the week. This episode is called The Culling of the Non-Professionals.

So, do you think Chris, that especially working from home with this kind of unholy Trinity, if you will, of working from home, no real understanding of how to lead, and manage and motivate a remote team, and the fact that we don’t understand the math of sales as directly as you and Ryan have communicated that we’re in for a great culling of the sales herd, if you will, what do you think is the affects of this? Does our profession get wounded at the outset, on the other side of this? Do they get smarter to, to get leaner, do folks bail on our profession because they don’t understand the intricacies? What do you guys both think happens here on the other side of this thing?

Chris Beall (02:14):

Wow. A prediction. This is rough. I’m not much of a predictor, although if the math is strong enough, I’ll make a prediction. So, in this case, sadly, the math is pretty strong and the math says it’s not really about the salespeople. It’s about the companies. There is going to be a great culling. And the great culling is going to be that a lot of companies are going to go out of business, and we’re going to be acquired for evaluations that are not their dream valuations, that they had six months ago in their heads. There was going to be a great shakeout. Tech is going to be the most shook, because tech is always the part of the economy that runs on speculation. That is you take in venture dollars are equivalent, and you hope to grow into those pants that you just bought, but you’re not in them yet. And then suddenly you’re not growing anymore and your pants fall down, it’s a little bit awkward.

Chris Beall (03:04):

So, this is a situation where we’re going to see a great shake-out. We’ve seen these before. This one will be worst by far with regard to technology, and shaking out, oddly enough, even then the tech crash of 2001. And the reason is, it’s not focused on tech. The tech crash of 2001 had the nice quality that it was tech company selling to each other. So, when they went down, they took each other down. This is the economy as a whole. This is everybody. And when it’s everybody and companies stopped building pipeline, then they come out of the other side of this stalled. So, they may well, in fact, the worst strategy is the foxhole strategy, is to stop it. I’ll go back to the sailing analogy. The worst thing you can do in a sailboat is stop. When you’re no longer making headway, your rudder doesn’t even work.

Chris Beall (03:59):

You turn the wheel and nothing happens. Literally nothing happens unless you’re moving forward. It’s called wallowing. It’s a wonderful term. And to get started again, you know, in a lot of situations, you need a motor to get started again. And when you come out the other side of this, nobody’s going to put gas in your motor, because they’re going to look at the ones that are still moving. So, investment is going to move toward movement, not towards status. So, those who go into the foxhole, they’re not coming out. I’ve been doing this as you know, Corey for an inordinately long time, right? I’ve been building tech companies for 37 years now, and I’ve never seen one start again that was dumb enough to stop. And yet it’s the single most popular piece of advice being given by investors, and others. They’re saying, “Hey, during this time, pull in your horns, don’t go into the foxhole. Stop. Because we got to conserve cash.” Cash is not the issue. Although it is the issue, that is if you run out of cash, your dead, but when you run out of forward momentum, you’re deader.

Corey Frank (05:07):

You’re going [crosstalk 00:05:08] the mountain and you’re out of oxygen. And the advice isn’t to let’s curl up in a ball and wait for somebody to rescue you.

Chris Beall (05:14):

Right. Right. The advice is you better keep moving and you may have to move down, but you’ve got to move.

Ryan Reisert (05:20):

Yeah. The quote I like around this is from Roosevelt, Franklin, D Roosevelt. There are many ways going forward, but there’s only one way of standing still. So, to your point, you can go backwards. That may be forwards right now. You can go forwards. You can go sideways, whatever, but standing still and doing nothing isn’t going to get you anywhere. Getting back to Corey’s question around the future. I don’t like to predict this, but it’s been kind of my mission is I call it the modern sales movement, whether it was with inside sales bootcamp or the initial hypothesis of the sales developers before it moved to the direction we were going was really trying to help companies establish the modern sales best practice, which gets back to what we talked about at the top of it, which is how do you redefine what pipeline looks like?

Ryan Reisert (06:07):

And the companies that are going to die, are those who they’re too shortsighted. They’re focused on the here and now. They don’t have a long-term vision of where they’re trying to go. And they look at all those shortcuts along the way, versus standing in a direction and saying, “Hey, that’s my north star. This is where we’re going.” Of course, that may look like this along the way, this way, this way backwards, forwards, whatever, but they still have somewhere they’re going. And so when that goes to the sales profession, the challenge is that we always have these short-term goals that are changing all the time. Who are we targeting? What are we saying? Why are we doing this? What’s our pricing. And who’s our best customers? We do this, we do that, we discount, whatever it might be, all of that has to go away. In the future of sales, you’ve got to move towards chapter one, lesson one, solve a problem, or go away.

Ryan Reisert (06:53):

To Chris’s point, we’re out there searching for those who have a problem we may be able to solve either now or in the future. And as a sales professional, as an organization that I’m representing, I need to passionately, genuinely, believe that my organization, that I’m working for actually solves a major business or technical issue for these people that I’m engaging. And when I engage, it’s my honor, my duty, my whatever you want to call it, to ensure that I’m doing everything in my power to help move towards solving that problem for them, even if that means that I can’t do that now because of whatever limitations of where my company is, it’s still my duty to have that conversation, gather the information, and try to support where I can. That to me is the future of sales.

Ryan Reisert (07:37):

It’s what it should be today. It’s definitely what it needs to be tomorrow. And I think we’re going to start to see that happen as people figure out what that movement needs to look like. That’s where success will lie. Right? Very good targeting and understanding of it’s not now, it’s at some point where we will exchange capital in terms of the money part of the sales, but in any case, we’re exchanging value my time, your time today, hopefully, the solution to your problem in exchange for money tomorrow. That’s how things work in the business world. And that’s how I see things coming together.

Chris Beall (08:11):

Wow. That’s a super hopeful message. Could I jump on that a little bit?

Ryan Reisert (08:14):

Is it too optimistic?

Chris Beall (08:18):

Well, no, I think you’re absolutely right. I mean, I’ve said something that is very uncomfortable for people to hear, and that is that this pandemic is finally going to civilize our society. And this is part of the civilization of our society is learning how to match need to capability or solution without being uncivilized. That is without lying, without tricking, without pushing, without any of the things that are traditional in sales where, there’s sales book after sales book written on techniques to cause somebody to believe you, when you really shouldn’t be, right? [crosstalk 00:08:59] And so now I think we’re getting a big honesty bath here that going to cleanse a lot of this off. And I think it’s going to be remarkably [inaudible 00:09:12] positive in that there’s an opportunity here to get rid of a lot of the luck, a lot of the [inaudible 00:09:19] …it’s like, why did that happen?

Chris Beall (09:22):

Corey, you wrote a really good post once that said, “If I achieve something, a deal by luck, I should not celebrate that deal.” And the traditional sales is to get deals by luck and then celebrate them. That’s what [crosstalk 00:09:36] …is the closed one deal, regardless of whether it was obtained through a repeatable process, or obtained through luck. And there were only two things in the world, repeatable processes and luck. There isn’t anything else. And even within the repeatable process, all we’re doing is containing the luck. We’re just saying, we want to put the luck in a bucket so we can have this kind of luck that yes’s, and this kind of luck, the no’s, and this kind of luck, the not me’s and this kind of luck the not now’s. And then once we have those four buckets, we can manage our luck appropriately.

Chris Beall (10:06):

We manage our yes’s towards deals. We manage our no’s towards kindness. We let them go. We manage our not now’s toward follow-up, toward the future. We have future conversations and explore then when, and we manage the not me’s by asking politely, “Then who?” And that is how we manage the luck that’s inherent in search, because search is basically kind of like we call it a lucky hit, a lucky find when we find something. And I think that we’re going to see a turning away from luck-based sales, and a turning toward processed and science-based sales where it’s cleaner, because we’re not altogether rah rahing each other so much. And now we have to actually look at the facts and deal with the facts and then move forward based on the facts.

Chris Beall (11:01):

And I think that’s really going to change sales. So in a positive, negative way, I think there’s going to be a big shake-out. I think they’re always kind of positive because people end up somewhere and companies are not people. We shouldn’t mourn them too much when they go away. I don’t know why people mourn than companies, more than people, but they seem to. And it is the truth.

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Chris Beall (12:26):

And on the other side, civilizations kind of coming to us all, whether we want it or not. And I think it’s coming to sales faster than almost any part of the economy, because sales was the least honest part of the economy, even though it’s the most honor, a very honorable profession.

Corey Frank (12:45):

So, why, then Chris and Ryan, would you think that you had mentioned the foxhole strategy, why are all these smart folks, right? You saw the Sequoyah report, of course, conserve cash. It seems like if you have a repeatable process that, that is the juggernaut that is the tank that is the tool that you can drive through these Gale force wins. And it seems like luck as a strategy, if I’m faced with conserving cash and I’m hunkered down in this foxhole, I’m just waiting for the shell to hit my foxhole. I can’t do anything about it. It’s just completely random trajectory, whether it hits my foxhole or not. Having a repeatable process seems the only logical approach to take in a strategy like this yet. Why do you think there’s this disparity from a lot of smart people, a lot of smart CEOs, a lot of smart VCs that are advising folks to hunker down, to cut, to conserve versus drive through?

Chris Beall (13:48):

Well, I know the answer to that because I’ve been around for 40 years doing this crap, right? So, I’ve been through more downturns that are comfortable, and the reason is simple. It’s, doability. One thing you’re sure you can do is cut costs, right? And so you’d rather do things that you’re sure you can do, than things that you don’t know that we can do.

Corey Frank (14:11):

So, it’s the lowest common denominator, what they’re doing.

Chris Beall (14:13):

Yeah. It’s the highest confidence factor that the action will get a result [crosstalk 00:14:17] …costs you get lower costs. It’s really simple. And by the way, I highly recommend that in times like this folks cut costs, because it stimulates you to look at your organization more realistically. And if some growth is coming off, some of your costs are to support that growth, if the growth isn’t going to happen because of secular conditions, then cut some of those costs. There’s three ways that companies run out, they die, right? Well, one is they don’t provide something of value. So that means they were dead all along. They just didn’t know it. Another is that they run out of cash, in that case, they’re dead because they starved to death. And then the third way is they get wiped out by competition. That is they’re dead because they don’t know how to take markets, which is our main theme in the Market Dominance Guys.

Chris Beall (15:05):

Well, running out of cash is not a great way to die. Oddly enough, it’s pretty easy to avoid it if you have a business, because we talked about this on a whole episode of Market Dominance Guys, you shrink the core of the business, which is the overhead, the middle of it, not the important part that you overhead, in order to match your gross profit flow, and then you’re all right. It’s just as simple as that, you just take a number and you go up, up, up, up, up, and you cut until you get to that point. And then you deal with the consequences. It’s very simple. Any company that has a business of flowing business with revenue can do it, and the cycle time to do it. But it is roughly two weeks. It’s actually an average of one week if you cut payroll every two weeks, and it’s just the mathematical nature of the beast, and everybody should do it to whatever degree makes sense, because without survival, we don’t have anything interesting, we’re dead. Being dead. All dead companies are equally uninteresting [crosstalk 00:16:03] …did a whole episode on just that, right?

Corey Frank (16:06):

That’s right, that’s right.

Chris Beall (16:07):

But having done that, what’s interesting is you’ll also need to get over a fundamental error on the sales cloud, and the revenue side of your business, which is this conceptual error. The error is that salespeople produce sales results. This isn’t true. The spreadsheet that you built that says if I have six reps and each one of them has this quota and each one obtains 85% of the quota, blah, blah, blah, then I make this much money. That’s not what happened. It’s I have this much opportunity, market opportunities sitting in front of me at this point, I’m sampling it at this rate, by having conversations. Those conversations are turning into business in the future with this cycle time at this approximate revenue, and my gross margin looks like X. Therefore I can predict the future cashflow for my company.

Chris Beall (16:58):

That’s actually how it works. And so if you do something really simple, which is let the lowest performers or the lowest potential, depending on how much money you have and what your future looks like of your sales team, be furloughed, or go away and focus the opportunity, the total opportunity on a smaller number, and let them enjoy it because they probably will love it, and they’ll prioritize it, and they’ll do wonderful things, but then you’ll get the bulk of the opportunity you would have had anyway, and you get it at a lower cost. So, this isn’t true of every sales team. I’m actually not doing it with ours, but it’s because it’s already been done so often at ConnectAndSell, there’s not much left.

Chris Beall (17:41):

Every once in a while, I kind of go, ah, maybe here, maybe there, but when you’re doing what we’re doing with, I mean, I’ll show you again here. Here’s the screenshare again, right? Let’s look at it. That’s a pretty small sales team for a company our size, that’s all the SDRs and all the AE’s together, by the way, they booked two more meetings by now. And they’ve had a boatload, more conversations. 94 conversations so far. And it is now…

Ryan Reisert (18:06):

You know, it’s interesting, Chris, is like the numbers as they go by, continue to go towards the average, right? I don’t know what, it’s been 30 minutes since you showed this again. So conversations went up, meetings went up the conversion rate. It actually went up a little bit, but it’s still right around that 7%. And again, if you go back to those who are open to it, those who are buying now, it’s always going to be roughly in that wheelhouse. So, every time you refresh this figure [crosstalk 00:18:33] …never lies. Never lies. Never lies.

Chris Beall (18:36):

Yeah. Here’s how you know you’re running a real sales process. When you put up a dashboard like this and your eye goes to the top dials conversations, meaning conversion rate, dial the conversation to eliminating follow-ups rather than to an individual rep.

Ryan Reisert (18:51):

Yep.

Chris Beall (18:53):

That’s how you know you’re running a process. You know you’re in a time of great change when you look at the numbers across the top and go, “Huh, that doesn’t look right.” And then you ask two questions, which is, “Who is killing it, and who’s struggling?” And you ask them in that order because of somebody’s killing it through some variability, you want to go find that variability and ask yourself, we just learned something that we should incorporate. And then if somebody’s struggling, you’ve got to help them because otherwise they’ll lose heart. And when they lose heart, they’re gone.

Corey Frank (19:26):

So let’s take that as probably the last topic here to finish up is looking at a little bit of the math of sales and what you have learned. We’ve heard a lot of talk, Ryan, you did a podcast a week or so ago with Bob Perkins, from AASP. And you talked to and riffed poetic certainly on some of the results that you’ve seen on dial to conversion rates, and to meeting rates. So what have you learned from this when we are home-bound inside sales folks, working from home digital professionals who are also calling on other homebound professionals in our target market. And so maybe you guys can both talk a little bit about the math of what you’ve seen, where, maybe again, the evolution of the process, if we’re becoming more civilized, as Chris had mentioned.

Corey Frank (20:16):

Then are our prospects responding to that with increased conversion rates? Are they have less distractions at home, and that is what’s accounting for maybe increased conversion rates? Is it easier to establish trust in this type of relationship? Will it be easier to establish trust over time, especially with this great culling of the non-professionals? So, yeah, let’s talk from a high level, a little bit about the math and what you’ve learned over these past few weeks.

Ryan Reisert (20:46):

So I can even share my screen, right? So the last session I had was just yesterday, because I haven’t gone on this morning. I’ve been in meetings before this podcast I’m on the west coast, but look, here’s my number. So, Chris has been sharing his, this was yesterday on two hours, it did a 179 dials had 11 conversations set a meeting, six follow-ups, not much different than what you just saw for the dashboard, right? 9% conversion rate. Interesting thing about my size, or my data that I learned was I went and did some research, and I only wanted to focus on what prior 10 pandemic was a ranking of the SAS growth, 4,000 and the fastest growing technology companies, because I believe those CEOs have something interesting to have conversations about. So this was only founder CEOs and my dial to connect was higher than it’s been ever.

Ryan Reisert (21:29):

Usually this is around 2023. And my talk time was actually two times what I usually see. So, I was actually having longer conversations at four minutes, usually I’m around two minutes or so. And one of the things that took me a little bit of time yesterday as I was pausing a lot, because I was crafting some more, very personal follow-ups once I had some conversations, especially for those that maybe didn’t think it was a good time to talk, just to help them understand that I was doing some research ahead of time, and had something of value there. So, if I go into what I’ve learned most recently, and I continue to learn every day is that the math of sales really never lies. And if I looked back over the last few weeks leading through this, I look at our team’s data. I look at my own personal data.

Ryan Reisert (22:09):

It’s still driving towards roughly the averages. There was a timeframe when I looked at my targeting and some of the folks in my buckets where I needed to make some adjustments, right? So the success rates on, say, getting in front of folks in finance right now, their hair’s a fire, they really, really, really need to be talking to their customers. Now, those conversations are still leading to future conversations. I actually have a potential test drive with a large financial public company and a large financial private company that sells annuities and things like that. However, the conversation when having the conversation with them now is, “Hey, look right now, all I’m trying to do is make sure all my customers realize we’re here for them, but this is interesting, let’s follow up.” And so those follow-up meetings are getting scheduled and they’re down into the future.

Ryan Reisert (22:53):

Is that an immediate opportunity? Absolutely not. But I started to make some adjustments saying, well, my time, energy and effort talking to those folks right now while I can help them are not as valuable as talking to some others where one of the CEO’s the meeting that I got set up yesterday was thank you for reaching out, in fact, we’re blowing up right now and this sounds very interesting. Let me get you in front of my VP of sales. And so I want to find those opportunities and be strategic with my data because actually there are those that are growing into this buying window, and I’m always trying to make sure that my math is quote-unquote hacked.

Ryan Reisert (23:25):

So I spend more time at those buying now than I would otherwise. However, in the general landscape, if I look at all the data and Chris can talk to this, we’re actually seeing connects rates go up, and the success rates are staying average right around that seven to 10% on a cold conversation with followups, which again, math of sales never lies when you at big data. Chris, I’d love to hear your thoughts on this, because I know you’re posting, but personally that’s how I think about it. That’s how I use the data. And that’s now what I’m doing to then optimize based on what I’m learning from the climate.

Chris Beall (23:56):

I love that, Ryan. I mean that adjustment that you made, this is exactly according to what we were talking about earlier, which is, the wind’s going to move around. You’re going to have to change the study or sales. You have to change your course a little bit. You’re going to get interesting results. They will never be what intuition tells you they will be. That’s another thing that we’ve learned is your intuition is so unreliable that you should stop having it as soon as you reduce it to a list. As soon as you have a thought of, “Hey, this is interesting.” Stop thinking immediately, reduce it to a list. Start having conversations, get out of your head, and get out of the conversations that you’re having with internal folks, because that confirmation bias thing that says, “Well, that won’t work”, or “We tried that before”, man, those are killers.

Chris Beall (24:44):

You’re huge opportunity is hiding somewhere in this landscape and you got to search the landscape. So, Ryan’s searching the landscape as his CEO, my heart rate goes down. My blood pressure goes down. I think maybe I’ll take a walk or a nap because I know he’s doing these great things. So if you’re not exploring, your dying. If you’re a manager and you can’t see what your people are doing, you’re like a driver with a blindfold on. It is not going to work out. And most managers can literally not see what’s going on with their work from home team. I’ve had the luxury of being able to watch our teamwork in detail every day with reports coming in once an hour, because my opinion as a CEO, if I’m not handling, or understanding how we’re doing at the tip of the spear that we’re moving forward, I’m actually not executing on my most important fiduciary duty to the company, because my duty includes big, big letters grow and you can’t grow the company without growing the pipeline.

Chris Beall (25:49):

You just can’t. It’s actually impossible. So watching the growth of the pipeline, understanding where it’s coming from, who it’s coming from, how fast it’s coming, what the conditions are that are changing, that might be making it more challenging, less challenging. These are all part of the CEO’s job. And every CEO should be doing this, if they’re not, they should try it sometime. It’s pretty fun. That’s [crosstalk 00:26:13] what you do. Our test drive lets you actually watch your teamwork from home for a day, and know what’s really going on in your business maybe for the first time.

Corey Frank (26:22):

So repeatable process and leadership versus luck and leadership is that scales there as well. So, well, we’re going to let Ryan go since he’s a couple of hours behind his dials, so, but good thing you have a conversational weapon like connected cell and you’ll be back in the leaderboard here even with a two hour trailer like Chris, and I have been on your time here for the first part of this morning. So, thank you Ryan. We appreciate it. And we look forward to having you back again.

Ryan Reisert (26:48):

Yeah. Thanks guys. Appreciate it. Good luck out there.

Chris Beall (26:51):

Yeah. Thanks Ryan. And thanks for all the conversations that you’re going to have today. Every one of them has value to our company.

Corey Frank (26:57):

Yeah. That’s really, really good stuf, guys. I really like the repeatable process riff, the math of sales riff, the foxhole strategy, right, Ryan, solve a problem or go away. I think we could spend ome time on the pyramid that you’ve had in your background for a forever too. I think that’s good riff for both of you guys. So I like it. I like the dynamic of both you guys coming from a perspective of on top, as a CEO, as an investor, as someone who’s seen upturns and downturns. And I like your perspective, Ryan, certainly as somebody who’s trying to push the envelope of what our profession should be as a digital sales, a modern digital sales professional in the future. So I think we’ve got a couple of more good sessions that we could certainly have with you if you’re game to jumping on these again, so.

Ryan Reisert (27:47):

Yeah, no, I’m always happy to jump in and if you guys find value in the conversation more than happy to do it, of course, if Chris is okay with me spending time.

Corey Frank (27:56):

Jerry [inaudible 00:27:57] …asked specifically if we could take as much time from you as possible so he could overtake you on a leaderboard. So that’s following a favor for him.

Ryan Reisert (28:04):

No, he’s beating me on the revenue number, but I’m going to get him because the math sales never lies.

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