CEOs are in their positions for a reason. One of those is that commitment to driving revenue through the company. How can they do that? Doug C. Brown brings over a guest who has the answers. In this episode, he talks to Gene McNaughton, one of the foremost experts in business growth and the CEO of GrowthSmart Consulting, Inc. Together, they explore CEO commitment, particularly that of being the main driver of revenue to the company and not just delegating the task. Gene shares how they can plan through the five fundamentals through the sales process along with the fifteen key performance metrics to measure all the way through. Plus, he also discusses what’s behind the line “people who inspect get respect” and why CEOs need to follow through to see their desired results and business growth.
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Gene McNaughton On CEO Commitment And The Key Metrics To Business Growth
We have a good friend of mine. His name is Gene McNaughton. He’s a CEO of a major company at this point. Prior to this, Gene was regarded as one of the foremost experts in business growth and he’s done this for Fortune 500 companies. He has a long leadership and achievement history as a consultant, public speaker, public trainer and sales trainer. His many years of experience spans decades at Gateway Computers. He was the right-hand man for Tony Robbins and Chet Holmes. He had his own consulting business called GrowthSmart Consulting.
His expertise in sales, leadership management, coaching, development, training, you name it, both in sales in support of the personnel has led him to successes in implementing strategies for organizations as small as $2 million and his largest is $2.5 billion per year. One of the things in this episode that I want you all to pay attention to is, Gene and I talk a lot about the business owner and CEO’s commitment to driving revenue through the company.
This is important that the CEO and business owners understand that they’re the driver of this revenue through the company and you can’t delegate it off. We have to have measurements and metrics around this and everything has to be inspected consistently. People inspect, and those people who inspect, get respect. Pay close attention to that we’re going to go into a lot of facets. There are different things that we unpacked regarding sales forecasting and ways to get this to happen better for you. Let’s welcome Gene to the show.
I have an amazing guest. His name is Mr. Gene McNaughton. Gene and I have known each other for well over a decade. Gene, I want to welcome you to the show.
I’m so glad to be here, Doug. It’s like the good old days back in 2007 when we first met, working with Chet Holmes.
Gene was one of the high-end consultants at that time in the Chet Holmes Organization if I remember correctly. Gene, is that right?
Gene and I got to work on some projects, whether I had him first, he got them, or whether it was even a collaboration going on. We worked on a lot of companies that were doing far more than $5 million a year. Gene, what’s the biggest company that you worked on whether it’s inside that organization, or even in your own consulting business?The best CEOs are very good at acknowledging what they're not good at. Click To Tweet
The biggest one was the first deal that started the consulting division of the Chet Holmes Group. It was a company out of Mexico called HomeX. Prior to Chet’s ability to drive leads, if you remember, he used to do his advertising on the radio, “Call and get a free chapter of my bestselling book. Leave us a voicemail with your email.” The President, the CEO and Owner of the largest home developer in Mexico called in and he said he wanted to hire Chet.
It was at that point in my career where I was working for a company that did small business coaching and we were doing fine, but it was right at the crux. Think of 2006, 2007 of the crisis that most people reading this live through. I reached out to Chet and we had become acquaintances due to Tony Robbins. Tony introduced me to Chet and I happen to reach out to Chet. One thing about knowing somebody’s calendar and knowing somebody’s patterns, I always knew that Chet ran meetings for 50 minutes. He’d always leave that ten minutes to go to the bathroom, to get something to drink, to stretch out, and get to his next call. I strategically called him at 12:55 PM not thinking he would pick me up, but I called to check-in.
He goes, “Gene, you don’t sound that happy.” I’m like, “I’m doing okay.” He goes, “How’d you like to join me in our consulting division?” I’m like, “Why is that?” He said, “I had a guy call in from Mexico. He’s the CEO of some big company. If we close that deal, it’ll be your first deal.” I said, “I’m interested. Who’s in the division?” He said, “Only you. You’ll be the president.” We got to that call and it was a Mexican company out of Mexico where some people spoke Spanish and we had translators on the call and he introduced me. I still remember to this day that he introduced me as the el president. That’s how he said it. I don’t think he said it right but everybody got a good laugh out of it. They were a $900 million company, a legit and big company and they needed help on marketing, sales, public relations, hiring, compensation structures, metrics, management and measurement.
Honest to goodness truth, they paid us well over $1 million in consulting fees. That’s a big deal. I don’t care what firm. If you’re with KPMG, that’s a huge deal. In the realm of that, we helped them go from $900 million in our first year to $1.4 billion the second year, and by the third year, they were doing $1.7 billion. Nothing changed in their marketplace. The prices of the homes they sold, their competition, the landscape, the economic landscape, not only didn’t change, it got worse because they trailed the United States economically by about 12 to 18 months. It was a pure example of having discipline in how they marketed, sold, measured and managed that had a dramatic impact on the success of that company.
I remember the account too. I remember you working and I believe it was somewhere around $100,000-plus a month that we were pulling it out of it as a company. You bring up a good point because on the CEO Sales Strategies we look at it and go, “From $900 million to $1.4 billion to $1.7 billion. There’s got to be some secret that happened there.” Is the secret in this case disciplined or was the secret in discipline plus?
If I had to narrow it down, it was the CEO’s commitment to excellence and growth. Depending on how big your staff is, for the reader, you may be an army of 1, 5 or 500, or in that case, they had 7,000 employees and 3,000 salespeople. His commitment to making sure that this wasn’t a training exercise, it wasn’t a feel-good exercise was the most important part. For anybody reading that’s the business leader, I would say the same thing to you. It’s your commitment to seeing it through. It’s one thing for sellers to go through a training program.
Maybe they get inspired, maybe they feel good about it, and maybe they learn some bits along the way but it’s another thing to commit to systematizing your full-funnel management. How you market all the measurement systems in, your organic, your paid spend, what you’re doing on the web and for SEO like putting management metrics, along with goals in place, then to the sales process. All the way from something turns into a lead to its conversion to the conversion percent to the average sales price to the referrals. That’s what this man did.
He committed. He picked the system that he felt was best for him. In his case, it was Chet Holmes and the business breakthroughs group, but he picked a system as the CEO and committed to seeing it through. That meant making sure his vice presidents, directors under them, and the sales managers. We’re seeing it through all the way down to human resources, how they hired the onboarding training of the reps. He committed to a system. If anybody asked me for advice whether you pick Doug, a Chet Holmes group, or whoever it is you pick, vet them, but then commit to seeing the system through, that is where the growth comes from.
Business owners, CEOs and others reading this, know those words, seeing it through, the commitment to seeing it through. You wouldn’t think that was a growth strategy, but I can tell you that Gene and I have worked on combining probably thousands of accounts, but I can concretely back this up that one of the biggest challenges that companies that I see have is their CEO is not that committed. It’s a nice idea. They want to grow. They want to get there, but they’re not becoming the executive sponsor enforcing that transition of commitment throughout the organization. That was with HomeX. Do you see that with any other organization as well that you’ve worked with?
I’ve consulted 159 companies. I keep track and these are not going for a keynote, a half-day, or a two-day session. I only consider it a consulting relationship when I’ve spent six months or more with them. Almost all of them when I come in and you are taught the same thing. When you come in as a consultant, the first thing you want to do is an audit, which means you want to look at their processes, their systems, their methods, and how they measure and manage. You want to confidentially interview people under confidentiality so they can tell you what their opinion is.
It would become a regular and I could anticipate that somebody would say, “You’re the flavor of the month. We had this group in, we had the spin group in, we had Miller Heiman.” Name a lot of great training out there. What would happen is, the consistent theme was the CEO would be fired up, the VP of Sales or the CSO and they’d say, “We’re going to commit to this.” They get everybody the book. They’d bring in the person as the keynote. They would lose track of it. They wouldn’t follow it all the way through.
That became one of the defining moments as a consultant in talking to the CEO because we were fortunate, Doug, that we had so many people coming at us wanting to hire us to work with their company. We had the good fortune of basically saying, “Why should we pick you?” You want to talk about the preeminent sales pitch to say, “There are ten people that want to hire us. We can only take on five so you tell me why we should let you hire us.” It was crazy. The defining element before I would say yes to somebody was, “I need your commitment, Mrs. CEO, Miss CEO, or Mr. CEO, that what we teach, you’re going to hold your people accountable to the execution.”
We were so disciplined and I know you still are on having the measurement systems in place. it’s one thing to do a training exercise 2 or 3 days. Maybe you’re doing virtual online universities or you have a talented trainer within your organization or a talented sales leader that can package up the sales training itself. It’s one thing to do the training and to check the box and say, “We did the training. We went through these processes and methodology. Everybody took the test and signed off,” but people forget that it’s not an exercise of futility. It’s not checking the box to say, “Yes, we did the training.” It is to cause change to behavior in the organization.
Part of the reason when we do these audits is I’m asking myself, “Where is the company at?” Let’s say, the companies that have $10 million a year in revenue. I’ll pick a number. I want to understand everything it is they’re doing to get to $10 million and you can broadly group it. How do they market, how do they sell, how do they manage and how do they track and measure? If we kept it simple like that. There’s a lot of sub tick marks underneath that. If you kept it at those broad levels because the $10 million a year is the result of their behaviors, actions and patterns as a business.
If the CEO says, “I believe we should be at 15, 20 or 100, then it’s our collaborative job, as we’ve done together, to say, “Here’s what needs to change. Here’s what needs to be added. Here are the things that you’re doing that you shouldn’t be doing.” That all comes out of assessing the business. That’s why if you’re a business owner that’s stuck or your company isn’t performing at the level you think they’re capable of, it is intelligent of you to have an independent person come in and look at it and give you their perspective even if you pay for that. What happens is when you pay for somebody’s perspective, you’re going to pay a heck of a lot more attention to their opinion.
Without question. Gene, you brought up some good points here. One of the things is, companies many times think, “We’re going to train our people and we’re going to increase the skillsets of the people.” When you went back to the behaviors, the actions, and the patterns of the behavior where you’re measuring and I know you’re a measurement master. I remember some of the details that you measure, but measuring those metrics all the way through tells a story and that story allows that CEO or whoever to hold these people accountable to the change. It’s all about changing behavior. It moves the needle within the company. What percentage of CEOs or business owners do you think out there do that? These companies are doing extremely well. These companiesare marginal. These companies are declining. Do you see it as a common thread where the commitment of the CEO or the business owner at that point?
Here’s the common thread I see with the best CEOs that I’ve worked with. One is they’re very good at acknowledging what they’re not good at. They’re comfortable saying, “We’re good here, but we suck there.” That’s why they’re bringing me in, “We suck at this.” Also, for every good CEO and/or sales leader, one of the common attributes is they have, let’s call it financial or metric awareness. They run their business by dashboards. They have the ability to dive in when they need to dive in.
In the early days, go all the way back to 2009, ‘10, ‘11 and ‘12. There are many companies, I’d go into big companies, billion-dollar companies that didn’t have measurement systems in place, or at least ones they could believe in. Do you know how many companies I’ve gone into, Doug that proudly said that they use Salesforce.com, which is the best CRM yet. When I inspected and looked at their dashboards, I found the common pattern. While each seller, manager and leader had Salesforce, and they were spending on average $100 per person per month. I found one company out of 159 that was using the capability of Salesforce.com. When I could go to a CEO and say, “How much do you believe in your pipeline or forecast?” They’re different. Forecasts and pipelines are different and they’d say, “Not much.” Why is that?People don't really want sales training. They want the growth that comes along with sales training. Click To Tweet
I ask how they get their forecasts. The CEO would say, “Some people sent it by spreadsheets.” One guy said, “I don’t know. Some people color it on a piece of paper. I don’t know.” If you think about inaccurate forecasts and inaccurate pipelines, if you’re in a product distribution business and you’ve got to order your materials and your quantities from China, that is an immense drain of profitability if you can’t get accurate numbers.
In the last few years, most of the companies I work with are big companies. When I get into their measurement systems, they’re proud of the system. They’re not proud of the results they’re getting and that’s because of a few things. One is, they did their tertiary 3 to 5 hours of training at the rep level and they said, “Go do it.” Because there weren’t managers and somebody above them inspecting the metrics, and there wasn’t somebody at the top demanding accurate metrics that was a waste of money. That is one of the first things I get into. Show me how you get your numbers, show me the numbers and what is your believability of the numbers. Modern-day, I’m finding more companies in tune with that but still not at a level where you would expect.
Modern-day, they have to be because of all of the uncertainty that’s been going on. If they’re not doing it now, they’re going to see because as we both know that lack of measurement equals bleed. As you said, “It’s bleeding profitability,” but it’s also believed in being able to be able to capitalize on something in the market because they don’t have the actual cash to do it or opportunity cost is lost in some capacity as well. This measurement for those of you who are leaning in, if you’re not, I would. Those measurements and the metrics that Gene is talking about and holding people accountable to that have magical effects.
If you’re using Salesforce or whatever CRM you’re using and you’re not regularly looking at these metrics and looking at these numbers, they tell you the story. You want to be looking at these on a consistent basis. It blows my mind because, if you go to a CPA, they’ll say, “Let’s pull the balance sheet, P&L, this and that,” and they have all these metrics on the financial side and that tells a story. When it comes to the actual sales, revenue and growth components of most companies, they leave it as you said.
The guy that writes the forecast on crayon, on a paper. We get a meeting once a week and they all shout out their numbers. It’s like, “How does a company plan budgets on something like that and be accurate?” In 2021, where budgets need to be flexible, I believe forecasts need to be accurate, as all possibilities can drive that forecast to be accurate. Otherwise, the company could make a bad mistake. What are your thoughts on something?
When I got involved in a relationship here in Southern California, this is a company that sold consumer products, that’s probably the best way to put it. They had to order all of their materials and supplies from China and get it shipped over. They had a giant warehouse. The day that I got there, there were banners and things like hung up in the bathroom, “We’re having some an employee special product sale,” or whatever it was. Ultimately what it was is they had a mis-forecast. They far over-ordered their supplies and they were opening it up to the employees to go buy it cost so they could clear the warehouse. I’m like, “How does that happen?” He goes, “Because the pipeline wasn’t right. The forecast was wrong. We over forecasted. We under-delivered and now the products we’re carrying are out of date.” It was a technology company.
That became one of the prevailing elements because I talked to the CEO and I said, “Imagine the day that it’s not this far away from where if you want to know the forecast, you can look it up on your phone at a stoplight through Salesforce.com. There weren’t dashboards built. A good dashboard would say, “I know my key performance indicators of what’s most important. If I want to dive deeper, I can click that button and I can get into the depths of anything I want to get into.” That revolutionized that business. If you think about the amount of effort, time, energy and employee hours that were lost in wrongfully ordering too much supply and sellers not being able to fulfill their demand or what their forecasts were, think how much money that cost this company.
This is a $500 million company so it wasn’t the end of the world for them. This CEO reports to a board and that board is populated by the venture capitalists that bought the company and brought him in so his job was to get all this figured out. There are a lot of people that can claim to do, let’s call it sales training, how to hunt big accounts and customer service training. This guy’s issue was not the sales training, which they needed, that’s what got me in the door, but what they needed is what you do, Doug. People don’t want sales training. They want the growth that comes along with sales training.
What I tell CEOs, and I’ll tell this audience is there are three things required for growth. Those are tuning up your marketing, tuning up the sales process and measuring the stuffings out of it. Not in a micromanagement way, but in a standard way. What happens is when companies go through this transition of saying, “Everybody needs to adhere to Salesforce.com.” Here’s another story I see all the time. I look at the dashboards of sales reps’ activity within Salesforce.com and you can see it’s this low level, low level, then there’s this giant blip. It goes down and goes back down like a giant dip.
I said, “Let me guess. You had to come to Jesus’ meeting and told everybody if you didn’t use Salesforce.com, you are going to get fired, so everybody used it. Managers didn’t inspect it and six months later, you’re back to where you were.” He goes, “How did you know?” I’m like, “It’s right there in your data.” We go back to our basic theme for everybody reading which is pick a lane. Vet the various options and programs and people out there that are trying to sell you their methods, vet them and make the best decision you can and whatever one you pick, stick with it. See it all the way through so it becomes the normal operating behavior of your company, management leaders, marketers and sellers. When new hires come on, they’re trained into the system.
Doing that alone was a huge gem for people because doing that alone, pick a lane and focus on it creates more activity. If we’re focused on any activity and we increase the activity amount, right there we’re going to yield something out of it some results somehow. It never ceases to amaze me. When we look at companies, and we go, “There are no referrals going on whatsoever in this company,” or whatever it might be and we install a program to make an active referral program happen. All of a sudden, they’re starting to see new revenues come in that they hadn’t seen in the last five years because people aren’t doing it.
It goes back to exactly what you said in the beginning, that commitment of the CEO to make sure that the executive staff is seeing it through down through the management ranks on bigger companies. As an owner, if you own a $10 million or $20 million company, you’re the gala guy who’s got to be doing this. Driving this on a consistent basis and increasing activity alone will start to increase more sales because frankly, that’s been my experience, please correct me if I’m incorrect.
Most salespeople try to pick the easy fruit off the tree and they’re not doing the consistent activity to pick up long-term sales whether it be referrals, expansion of the sale, or even basic follow-up, common courtesy. They’re dropping the ball on these steps along the process so therefore, the bleed is happening on the company and if the company is looking at top-line revenue and going well, “We made some profit this year.” What they don’t realize is that maybe another 10% or more underneath all that that is not going to happen. Do you agree or disagree?
I 100% agree. Here’s the benefit of picking your lane in terms of what you’re going to track. Let’s keep it simple and generic. Let’s say from sales, you’ve got leads and inquiries. Somebody comes to your website, fills out a form, makes a phone call, and walks into your building, that’s an inquiry then you have a lead that has some level of interaction with your employees. Is it a qualified lead? Somebody came in the store, they were deemed to lead, but they were looking for something that you didn’t have, per se. I’m metaphorically speaking. They came to your website and they filled out a form. They want an X but you do Y. That’s not a qualified lead.
The goal would be, are you going to propose a solution with a price point on it? There’s another metric. How many leads turned into proposals? Next metric, how many proposals turned into sales? That’s called the conversion percent. Next metric, what is the average sales price of your sales? That’s another metric. Those are six simple metrics that apply to virtually any company. It’s fair to say, Doug, and to the readers that there is anything in your life that if you put immense focus on it for 30 to 60 days that you couldn’t improve by 10%. You’re in shape already, but even if you put immense focus on it for 60 days, could you cut your body fat percent by 10%?
That would be going from 15% to 13.5% with immense focus. Maybe you got some external help, you had a workout coach, a dietitian, followed a keto, or one of the millions of diets out there. If you stayed with it for 60 days and there isn’t anything you could get 10% stronger. I don’t know how you measure somebody being smart but you could get 10% smarter over 60 days by immersing yourself in books on the subject matter of your choice. If you think about your business, and let’s say you had six key measuring points, and you said, “We’re going to go to work for the next 60 days to improve each of these individual metrics, by 10%.”
If you had 100 leads in a month, your goal is 110. We’re not talking about astronomical lifts. You had said 50 of those leads out of those 100 turns into proposals. You’re going to go from 50 to 55. You had a 20% conversion on those proposals. You’re going to try to go from 20% to 22%. I’m talking 10%. You had an average sales price of $5,000, you’re going to see what you can do about getting that to $5,500. The light bulbs are going off that if you put laser beam focus, then you have reward mechanisms in place for those early adaptors that follow the change to behaviors.It's almost impossible not to grow unless there's an external circumstance that affects your entire industry right now. Click To Tweet
I will add this, in some cases, through pure brute force, a demanding CEO or business leader can drive this 5% to 10% change across the board, through purely looking at the numbers every day, reminding people. When you package in the how-to from an expert, a business growth expert, a sales expert, a marketing expert, a CRM expert, or hopefully you get one company that can do it all. It’s not brute-forcing through measurements, metrics, and demanding but you’re giving them the tools and the skill sets.
It’s almost impossible not to grow unless there’s an external circumstance that affects your entire industry. I’m guessing there are heads nodding out there now going, “That’s so true,” and it’s as simple as that. There’s work that needs to be done, but you pick out six key performance indicators and key metrics. I haven’t even talked about marketing and what you spend on your website, what you spend on advertising, what you do on paid spend through Google and social media. You can apply the exact same metrics to that.
The phrase that I like is total funnel management, the dollars you spend on salaries for your marketers or hourly wages to your consultants, to the experts you bring in for your paid spend. If you play that out, there can be at least 10, in some cases, 15 key performance metrics that you can look at on a dashboard. If you’re laser beam going at it, say, “I’m going to improve each of that 3%,” which doesn’t seem like a lot. That over eight touchpoints can double and triple your business.
Gene, I did the numbers on the example you gave. It’s an extra five sales a month, let’s say. That was five sales of $5,500. That 60 sales of $5,500, that’s an extra $330,000 in revenue coming in. I would call it a straightforward and basic example. Here’s the deal, get 1% better a day and in 70 days, you’ll be twice as good. Do the math. You have fifteen areas over the next six months in your business that were being optimized, as Gene is saying, it’s 3%. If 10% seems a little wild, then go 3%. Watch what happens to your business and the revenue increase that comes into your company as long as you go back to the first rules you were talking about, Gene, commitment from the top down and through the ranks. Don’t let people get happy ears. It drives me crazy when I go into companies and they’re doing these forecasts and they’re saying, “Here’s what I’m going to have,” and then not challenging them at all. They’re looking at it and they go, “This guy said he’ll do $300,000. This gal said she’ll do $350,000.” The reality is they’re going to do $180,000. There are breakpoints on all this stuff.
Imagine if you enabled your sales team, as a point, to give you an accurate forecast because you didn’t beat them up if they didn’t hit quota one month or they didn’t hit that forecast every month or all of these things that come into play. I find, a lot of times, management is invoking the sales channel to tell nontruths about what they’re going to close because they don’t want to be signaled out in the middle of a meeting or something like that. “What do you mean, Jerry? You’re only doing half your quota this month.” “I’ve been three 3X over quota for the last four months.” “Jerry, you’re a bad guy.” Jerry doesn’t want to hear that and no one else in the room wants to hear that. No happy years in the management meetings. Straightforward metrics, measurements, let the data tell the story. Commit to the process. Pick a lane as Gene was saying. Go over your optimization points and keep growing them.
I got to add something important. There is a clear distinctive difference between laying out clear measurement systems and accountability versus beating up the team. There will be some chasm if your company is measuring and looking in some accountabilities and so forth and then saying, “We’re going to move to clear accountabilities. There are certain base metrics that we all got to hit.” “You’re micromanaging.” You’re not micromanaging. All you’re doing is clarifying the standards of your organization. There’ll be some bumps along the way.
I find a correlation between top performers and lack of detail in CRM and Salesforce.com, “I want to go make the sales. I don’t want to do all this other stuff.” These are predictable hurdles that any business leader will have to overcome. If you want to be a big company, you’ve got to behave like a big company. You don’t get big and then start behaving big. You behave big before you are big, regardless of what size you are.
I didn’t know if we were going to go in this direction, Doug. You didn’t lay out a script or anything like that. I’m speaking from the heart that it is a must. If you want to go from $2 million to $5 million, $5 million to $10 million, or $10 million to $100 million, you got to behave like that gold company. There are plenty of great models out there or you go find a Doug Brown or somebody that does what Doug does that has 25, 30 years of building businesses. I’ll speak for myself and you can share. It is a rare day that I go into a company that I see something that I don’t go, “I’ve never seen that.” I can’t go in and say, “If I can look at some dashboards and have a couple of interviews, then a lot of it is predictable because companies run the same patterns.”
I once had a mentor say to me, “Doug, there’s not a lot of wow thinking out there. There’s a lot of good thinking because those things have already been thought of.” Business is simple if they run by the rules of the business, money out minus money in equals something, profit loss or gain. If people look at their business in that regard and they are applying these metrics, those metrics tell them the money out, the money in. They tell them the story. This is one way of them being proactively able to correct course. I agree with you, Gene. They may get some pushback from the people who have been there, “This is the way we did it.”
I remember when I was in the military in 1981, people used to walk around go, “We didn’t do it this way in Korea.” The same thing will happen in organizations as well. Gene is right on this. If you want to be at the next level of your growth, you got to start acting like you’re at the next level of your growth. That might be getting a little bit out of your comfort zone to be able to do that. However, the best companies out there, Gene has worked with 159 of them and I’ve worked with hundreds of them as well.
Gene, you’re also a CEO of a company as well. We can both tell you from experience, whether it’s building our own companies or helping our clients build their companies, the business basics still apply across the board. I still love what Chet used to say. He’d walk around all the time. Chet Holmes would say, “People respect what you inspect.” That context is true. If you’re the CEO or a business owner of your company and you’re not holding that commitment and we’re not measuring by the metrics and you want to grow, there is no other choice unless you grow by accident or a haphazard circumstance, something happened.
There’s an old saying, “The rising tide lifts all ships.”
Zoom is a good example of that. They were a good company before, but now they’re a huge company.
That’s a perfect example. There’s an external, environmental situation or industry situation that creates unusual, unpredicted demand for what it is you sell. Here’s a great example. If anybody knows my background, my first real job out of college was with a tiny little computer company called Gateway 2000. I started on the night shift selling computers over the phone. I was at the right place at the right time. Suddenly, this personal computer revolution exploded. Go back to 1991 when the only time you could have access to a computer may be was at your school because they were expensive.
Companies like Gateway and Dell came out and said, “We can keep our overhead low and make these computers so they’re $2,000 or $3,000.” Suddenly, it became affordable for homes and small businesses to buy computers. Big businesses could buy a computer for everybody that was at a desk. Right place, right time, we had the right offering, and we marketed well. We sold well. When I joined the company, they were $50 million. Several years later, it was an $11 billion company, global. When I was there, there were less than 500 employees. In 2001, we had 21,000 employees and did $11 billion in revenue.
Right place, right time still doesn’t guarantee that you’re going to grow like everybody else. We made some right moves. I still remember the day, every month seemed like there was a new record broken. Suddenly, we brought in new executive management. The owner of the company wanted to go public. We had to go hire a high-end COO. Suddenly, there was accountability and there were measurements, metrics, and roll-ups. We go public and then your metrics become unbelievably important.
I was running the public sector. By the time I left, that was all-state local government, all higher ed, K to 12, about an $800 million piece of business. I had to know my metrics. That was uncomfortable for me. I would get in front of the room, “Let’s get going. Let’s go tear the cover off the ball. We can do it. We’re going to dominate.” I would get everybody fired up and train and all this stuff I was intuitively good at or I was passionate about. When you’re passionate about something and you read about it and you study it, you can get good over time. I had to turn it into a numbers and metrics guide.
Frankly, in the early phases of that, I was the weak link on the leadership team. I was not an Excel wizard or able to do all these funky things on spreadsheets. There was no CRM. There was no Salesforce. When you have a huge division and you’re relying on pipeline reports from 100 different people, some are on the inside, some are in the field, some are drawing it on a piece of paper, some are using words, and some are using Excel. It was a stressful situation. Little did I know, ten years later, Doug Brown would be saying, “Gene is a metrics wizard.” If you would have seen me when I started, I was not. It was an uncomfortable area for me but I had to get good at it. I had to. There was no choice. I turned my weakness, ten years later, was my strength.People respect what you inspect. Click To Tweet
That’s what will work for you too if you go out there and do what Gene is talking about. Gene, if people want to get ahold of you, how do they do that? What would be the best way?
LinkedIn is one of my favorite social media channels. Find me on LinkedIn. Also, I wrote a book that became a best-seller in 2018. I give away a free chapter, the best chapter, the most unique chapter, on how to run the perfect first meeting. It’s free. You’re not going to get 8,000 emails coming at you or anything like that. Go to TheSalesEdge.co and download the chapter. If you read enough sales books, about 70%, 75% of any good sales book is going to have some of the same things, mindset, how to build rapport, the importance of follow-through, and asking for referrals. There’s a lot of great ones out there. All of the greatest ones have unique things. This is the most unique thing to me, which is my recipe on how to set yourself up to run a great meeting.
If you look online, Doug, there is no shortage anywhere of people that say, “We are the lead generation experts.” You can use our widget, SDRs, BDRs, automated this, and automated that to get leads. Everybody is talking about getting leads. Nobody is talking about, what do you do with the leads you got? That’s what this chapter is about. How do you get the most out of those leads that you, the business leader, are paying for? You paid for them. When you put $1 towards your website, you’re paying for lead gen. When you put $1 towards search engine, spend, or paid spend, you pay a marketer full-time, part-time, you are paying them for lead generation. Why wouldn’t you put as much attention on running those meetings, having measurement systems to say, “Did the meeting turn into a second meeting? Did that meeting turn into a proposal? Did that proposal turn into a conversion? What was the value of that conversion?” This phrase, full-funnel management, is important to you.
A little story here, Gene. I took one metric one time. I worked with this company that was doing $48 million. Gene talked about six stages or six steps at the beginning of this process. We were doing a similar thing. What I found is you go from Stage 0 to Stage 1. That means you get a lead. By the way, leads, when you’re paying for those, those are money out. You need money coming back in on that lead or you’re going to have a negative at the end of that equal sign. This company had been in business for six years. I measured, like what you’re talking about, and what I found was that the lead going into Stage 1, which was the first contact, 62% of the time was not happening. This company was generating thousands of leads a week sometimes. They had a pretty big sales team.
This is going back to the commitment thing you’re talking about. I went to the CEO and I said, “I got good news and I got bad news. What do you want to hear first?” He said, “Tell me the good news.” I said, “If you do the right things here, I bet you’ll double your revenue in a period of time.” He said, “What’s the bad news?” I said, “62% of your incoming leads are never making it to Stage 1. It’s not happening.” He said, “You are crazy. There is no way that is happening.” Gene, as we would do, we take the spreadsheet and we go, “Here you go, here’s the report.” I put it in front of him. Two days later, he took the first day to throw things around his office. The second day, he calls me back and he says, “Let’s fix this.”
Long story short, two years later, they went from $48 million to $110 million because that front end of the funnel that you’re talking about, the front end of the lead push, was going all the way through the process. They got that down. In the first month, it dropped by 25%. In the second month, it dropped about 20%. We kept working on it over that six-month period. What Gene is telling you works. He’s a genius. If you like what you learned, I highly urge you to contact him at TheSalesEdge.co. Download his book and go buy his book on Amazon because the book is a good book.
That example you gave where leads are continuing to grow, it’s a good problem to have. The conversion patterns, the first contact, the second contact, and full-funnel management, it is almost predictable in companies like that. If that’s happening to your company, there is a silo between sales and marketing where marketing is getting rewarded and recognized for increasing the number of leads and then they wash their hands of it, “I created the leads. There’s nothing I can do about it.” That is a disjointed sales and marketing organization. I see it all the time.
Here’s a great example. In the not too distant past, companies would spend hundreds of thousands of dollars to participate in the big annual trade show. You’d get your booth. You’d fly your people there. You’d have all your invites. You would have marketing and sales involved. You got your reps fly in there. You’re getting new clothing, shirts, tchotchkes to give away, and marketing would consider it a success that they generated more leads. In the not-so-distant past, a lead was considered somebody putting their business card in the fishbowl for the iPad drawing.
What happened is they get done with the trade show and then somebody from marketing would hand input all the leads. They got better and they could scan the badges and somebody would get their entry to get the iPad or the giveaway, the tchotchke. Marketing would say, “We increase leads by 30%. They’re all uploaded in Salesforce. Go get them sales.” Marketing we’ll move on. Intelligent CEOs began asking the questions, “What was the ROI? We spent $400,000 all rolled up on this trade show. What was our return on investment?” Nobody could tell them. That is always a clear case. It’s a predictable pattern that you’ve got a silo between your marketers and your sellers and that usually starts at the top.
Sales VP and marketing VP are not talking. They’re not communicating. What happens is you talk to the sellers and they go, “These were tchotchke seekers and they put their name in the fishbowl to get the iPad. These leads suck.” When you investigate that, it’s because the sellers make one tertiary phone call, they would leave one terrible voicemail, it doesn’t get returned, and they move about their business. In the middle of that is a business that spent $100,000, $400,000, $50,000 on that trade show. Because they didn’t have a strategy going in, they lost.
That’s gold. If you didn’t take anything out of that, which I hope you took it all, think of it this way. When you get a lead, how do you get an immediate lead into process? That process is engagement. How do you get that lead to engage immediately? How do you get your sales team to engage immediately? Gene, in that $48 million company, they did have a silo between marketing and sales. If you get a lead in, what is the next step? What has to happen? What are you going to hold your people accountable to the CEO or the business owner driving that commitment all the way through in measuring the metrics all the way through?
I always like to ask people this question at the end because it’s a little different than some. If you don’t want to answer, you don’t have to. If you do, that would be great. If you were somebody, whether the person is living or in the past, and you could go back in time and you could say, “I would like to do something like this person or I’d like to be this person.” If you could be that person, what good in the world would you do? What would you do if you could be that particular person?
What comes to mind immediately without putting a lot of thought into this would be Chet Holmes, where you and I met, Doug. We were with Chet almost daily, in some regards, at least on the phone or through email communication. I didn’t grasp how smart this guy was when I was there. I didn’t fully appreciate the magnitude of his brilliance. The reason I say that is I still find myself going back to YouTube and watching some of his videos of conferences that I was there.
At our first conference, if you remember in Vegas, we had 400 CEOs in the room. Every ticket was $10,000. It didn’t matter if you brought five people or yourself, there were no discounts, there were no breaks, there were no freebies. We only had so much room because we had short notice to put on that first business breakthrough event in Mandalay Bay. That’s where they recorded a lot of stuff you see on YouTube. You can buy the videos, which I highly recommend. I was taking for granted the brilliance that was right there. Granted, I learned a ton and you learned a ton and here we are several years later. All the people that were on that team are doing exceptionally well.
I would like to have spent more time with him less in a tactical matter, which was trying to secure the deals, serve the customers and get the growth at the customer level but to get inside this guy’s brain. He was a unique individual through sheer will, through everything he had learned, through differing circumstances through Taekwondo, he was a black belt, and how he was raised in different schools. His dad was in the military. He’s in new schools all the time. What got his brain wrapped around being passionate about studying marketing and sales and some of the stuff he was teaching. I don’t know if big corporations were ready for what he was teaching. Hopefully, you and I have done something that he’d be proud of and is carrying the ball forward of the guy’s legacy. If anybody who’s reading this has never heard of Chet, get on YouTube and watch his stuff or go to the UltimateSalesMachine.com. His book that he wrote in 2007 still sells 10,000 copies a month somewhere in the world. That’s unheard of.
It is a practical, applicable methodology and we used it all the time. Chet was a good guy. He was a nice guy. I remember having dinner with him several times. I remember him showing my kids how to flip numbers in his head at the dinner table. He was a genuine guy. He told me something one time, he said, “The original title of the book, The Ultimate Sales Machine, was changed by the publisher.” He said, “I wanted to name it Pigheaded, Discipline, and Determination for the Successful Entrepreneur.” That’s how he lived. He was pigheaded, disciplined, determination. He was smart.
He hired a lot of good people and brought a lot of good people like yourself and others and myself to the company. He turned us loose and he paid us well. The reality is we followed his methodology and kept innovating on that methodology and optimizing that methodology all the way through. That’s how his company grew to $27 million in a short time. Gene, this has been amazing. It’s been great. I appreciate us being here. Any parting words that you have?
One of my favorite sayings that I learned in listening to Tony Robbins, another person I’m a huge fan of, “In life in business, you get rewarded in public for the things you practice the most in private.” Wherever you are right now, maybe you have some disciplines, there’s another level. If your company is struggling, maybe your revenue is great but your profit isn’t, one of the keys to change behavior is getting an external voice. Get on LinkedIn. There’s no shortage of “business growth experts.” When you vet them, you talk to a guy like Doug Brown that started 35 companies that worked around some of the most intelligent people in the world that has a proven track record of growing companies, there’s a difference. It’s like saying, “Not every doctor is the same. Not every dentist is the same.” I’ve had great lawyers and I’ve had lousy lawyers. Even though their title is lawyer, they’re not all the same.In life and business, you get rewarded in public for the things you practice the most in private. Click To Tweet
If somebody calls themselves a plumber, it doesn’t mean they’re a good one. Vet those resources and pick a course. Pick a direction. Pick somebody good at something you have a weakness at and listen to them. Pay them. Don’t try to soak them for free information because, first, it doesn’t feel authentic. Secondly, when you pay somebody for their perspective, training, tools, or templates, you’re going to pay more attention. It’s no different than going to the gym. If you hire a trainer and you have to pay that trainer in advance, you show up for the darn sessions. That’s what business growth is. It’s metaphorically the same.
I remember AAMCO used to have this commercial and they were positioning themselves as the expert because they would pan out on the commercial to some guy underneath the car, transmission fluid falling all over the place. The guy would turn to his boss and say, “I always wanted to fix the transmission or I always wanted to work on a transmission.” They would pan back, “Come to the experts.” You pay more at AAMCO than you do at a place like that. It’s the same thing when you’re getting quality advice. For example, you go to the gym and hire a trainer. It’s $6 an hour. They’re not that committed to seeing results. It’s the same thing when it comes to building your business.
Your business affects not just your life, your family’s life, but it affects everybody else’s life around. It propagates legacies all over the place. We talked about Chet Holmes doing that for us. Gene is spot on. He’s a smart guy. I highly recommend you go to TheSalesEdge.co and pick up that chapter. Hit him up on LinkedIn, give him a call, whatever it might be. Talk to the man and you’ll be glad you did. Gene, I want to thank you.
I’ll add one more thing. For business growth advice, go to Doug Brown. I’m not taking on clients anymore.
There you have it. Thank you, Gene.
Truth be told, I’m full-time and attention to a company, gladly so. I’m going to build a national brand from scratch and then probably write a book about it. You can come back, Doug. Come see me and see how we’re doing.
I will be happy to. Gene, thanks again. I appreciate you being here. Take some actionable lessons out of this and apply something. Gene, thanks again. It’s been a pleasure and it’s always great to have conversations with you.
Thank you, Doug. It’s my pleasure.
That was another great episode of this CEO Sales Strategy Podcast. I thank Gene so much for his contributions. Don’t forget to go get his book at www.TheSalesEdge.co. It’s a great book and a good read. You’ll be able to glean a lot out of that book. Think about what we talked about here on the commitment side with a CEO or business owner. That business owner has to be committed to driving things forward. You’ve got to pick a plan and you’ve got to drive it forward. In that job of the lady or man who is the CEO or business owner of that company, it’s to make sure that everyone is on that page and they’re holding them accountable.
How do you do that? You’re going to measure all the metrics going through the sales process and you’re going to inspect everything that’s going on because people do respect what you inspect. You want to stay to the fundamentals and the basics. In this process, Gene shared five fundamentals. We talked about fifteen and there are different metrics that you can measure all the way through and the more you measure, the more that story comes together. The more that story comes together, the more you will be able to drive revenue through your company because that story will tell you what to do and what not to do.
I appreciate Gene being on here. He and I have known each other for more than fifteen years. He’s the real deal. Go get his book at TheSalesEdge.co. If you like what we’re doing here, please comment and if you like it, go ahead give it a five-star review. I would appreciate that on the show and let me know what type of topics you’d like to hear more on in the future and I will be happy to take a look at that and see if we can get a guest that supports what you’re looking for. Make it a great day and to your success.
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About Gene McNaughton
Regarded as one of the Nation’s most effective Business Growth Experts, Gene McNaughton has spent more than 30 years generating top results for companies of all sizes, including Fortune 500 Companies. Gene’s history of leadership and achievement has made him an accomplished Consultant, Public Speaker and Sales Trainer.
Gene’s 30-year experience includes spending over a decade at Gateway Computers, being the right-hand man of giants like Tony Robbins and Chet Holmes, and as President of his own consulting firm, Growthsmart Consulting.
His expertise in sales growth, leadership, management, training, coaching, and development of both Sales & Support personnel has led him to successes in implementing strategies for organizations ranging from $2 million/year to $2.5 billion/year.