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- [00:01]
A
You're listening to the Sales Hunter podcast. My name is Mark Hunter. And hey, how do you grow your sales? Well, let's try the aggregational. The aggregation, I should say, of marginal gains. Think about that for a moment. Hey, to help me unpack it, Gene McNaughton, he's going to join us in just a moment. And the show begins right now. You're listening to the Sales Hunter podcast with Mark Hunter, where the focus is to help you as a salesman, sell with confidence and integrity. And now, here's your host, the way to success, the aggregation of marginal gains. It's those small things that you do just a little bit better. Hey, welcome to the show. Gene McDonald. Thank you.
- [00:44]
B
What an honor to be here. Mark. I'm a huge fan of your work. I've studied everything it is you did. And I love your new book, Integrity for Selling. It is a absolute bestseller for a reason.
- [00:55]
A
Well, you can pick up your check on the way out today. Hey, let's talk about this, because again, every salesperson wants to achieve a higher level of success. And it seems like today the thing is that people are chasing the shiny object. They want that one thing that's suddenly going to change everything. And we were talking to green room. No, it's the aggregation of marginal gains. Unpack that for the listener.
- [01:19]
B
I was listening to a podcast like last year, and it talked about a European biking team that had always been in last place forever. They brought in this new psychology, and he began to make all these little shifts in everything it is they did. Not in how well they rode their bikes, but in their sleeping conditions, in their eating patterns, in how they traveled to and from the different races. And the author, he wrote a whole book about this, but he said it wasn't one thing that caused them to go from the worst team in history to the best team in history for four years straight. And he said this phrase. He said it was a whole bunch of little things that changed over the course of time that caused them to go from worst to first. And he used this phrase, aggregation of marginal gain. And it hit me right there. After all the work I've done, I did a Gateway Computers, a little computer company when I started. Ten years later, we were over 10 billion in revenue. After all the work I did with Tony Robbins and his 11 sales teams and now consulting 160 for companies, people want to know, how do you grow so many companies? And that's when it all came together, Mark. It was like, it's not one thing. It's not just teaching Companies how to go win the biggest deal. Although I've done that, it's not teaching companies how to just run harder and get more meetings or present better from a solution based presentation. It wasn't just one thing, but it was slight improvements in all of the key areas. And that, that's what I started to say. That is the answer. It's an aggregation of marginal gains, small G among 5 to 7 data points. That is what creates record breaking growth.
- [03:07]
A
Wow. Okay, let's break this down further because how do I find what should be my aggregation of marginal gains? I should go after you said five to seven. So how does a typical sales team, how does typical salesperson, sales leader determine what to focus on?
- [03:23]
B
Well, for, for you and for the people that are listening or watching right now, just think about your sales process right now. Most of you have a CRM. You have a way to track what's happen. But let's just look at some very basic examples. One is you likely get leads somehow an inbound call, a form fill on the website and those leads need to be screened. So you get a certain number of leads on average every month. And a certain percentage of those leads turn into real opportunities that you're going to pursue. So you got a lead to an opportunity. Once you decide you're going to pursue them, you've got to schedule something. Would I just like to use the phrase a meaningful conversation? Some call it discovery, some call it first meeting, some call it needs assessment, whatever it is you call that. But not every opportunity turns into a meeting. There's fall off that just happens. Then you have a meaningful conversation. Well, what is the likely next step in your sales process? Does that go to. You need to go learn more about them, you need to audit something, you need to look at data, you need to tour their facility, you need to understand their options in terms of your competitive threats that are out there. But you would have that first meeting, then where does it go next? So maybe you go into a deep dive and discover you've got to learn more about them. And then once you do that, what's that next obvious step? Well, for, for many people it's like I'm going to send a conduct, I'm trying to get the business. I don't agree with that. I think if you, you're selling anything that's complex, you've got to come back and give them a solution based presentation. At that solution based presentation, you're going to either agree to the price and ask for the business there or you're Going to send them your contract or your terms and conditions or pricing or whatever. But if you look at all these steps, by the way, then you ask for the business, you get a yes or a no. That's a closing percent, you get a yes. What's the average sales price? You get an average sales price. What's the average gross margin of that deal? So I just laid out 12 different data points, but what I'm suggesting is you can't eat the whole elephant in one bite. What are the five to seven core KPIs that make the most sense in your sales process, whatever they are for you? Maybe you're thinking about it right now as you're hearing me say this or watching me say this. And then I would say if you, if you really look at this, this aggregation of marginal gain, I would just ask the simple question, Mark, is, is there anything in your life, Mark, I'll ask you right now that you, if you had absolute laser beam focus, it was not something you should do, but you made it a must. This could be your physical health, it could be the money you're saving, it could be a relationship. But if you put laser focus on it for 90 days and really paid attention to it, is there anything in life that you couldn't improve by 5% over 90 days?
- [06:22]
A
Oh, there'd be tons of things. I mean, I can think of a lot of things. One of the things that I'm always challenged with is I want to spend more time on the phone prospecting. I absolutely love prospecting, having those conversations. And I like what you're saying. The way we solve the macro problem is to look at it in a micro really perspective to find those little things. Now here's the challenge. I find it so easy that we can spend time on or we can focus on things that are easy to measure. But just because it's easy to measure doesn't mean it's worth our time. So how would we go about finding what is that really critical thing that we probably need to focus on first?
- [07:03]
B
Well, I just speaking from a generic, and I've consulted 164 companies in 100 different industries in multiple countries. Right. But at this stage, I'd have to be an idiot not to see that the same patterns exist in every company that's flatlined or struggling. And I don't get called in. Mark, when they're breaking records, they're not saying, hey Gene, come in and help us break more records. That's not usually when they call guys like you and me and Maybe you for their. Yeah, no, no, no.
- [07:29]
A
They, they call. My line is, why didn't you call me a year earlier?
- [07:34]
B
Right. Okay, so, so we're cut from the same cloth. But I, I'm, I, I almost already know most of the problems I'm going into before I get into the middle of the problem. I just know where to look now. Right. After so much repetition doing this, the. Let's just let break down your sales process. You have a, some type of opportunity that's been generated. There needs to be a first meeting. So there's a KPI. Didn't the meeting happen in your sequence? First meeting leads to something. Does it lead to a proposal? Does it lead to, I need to learn more. Does it lead to. I'm going to send you a quote. Okay, fine. Whatever yours is, you send that quote. Well, there is a yes or no. That's a conversion rate. There is a average sales price of the quotes that you lend. That's an asp. And if you're tracking margin, what is the margin that that is being used? One of the things I love, I have this written down that you said in your book is avoiding discounting as a default strategy, right?
- [08:44]
A
Oh, yeah.
- [08:45]
B
I mean, you know, I talked to a, I was talking to a president of they're now a client. But this president that had, I don't know, 80 salespeople out in the field and 20 on the inside, he said, my sellers spend more time negotiating with me about pricing than they do with their customer. Have you ever heard that one?
- [09:05]
A
Oh, yes. Oh, yes. Because I, I, because I will contend that, that a lot of salespeople spend a lot more time fighting the internal battles than they do the external battles.
- [09:15]
B
Well, well, yeah. And I said, what, what are you teaching them about negotiation? He goes, well, we hired professional salespeople. They should know this. And I'm like, are you sure about that? Are you?
- [09:26]
A
Well, thank you. Thank you.
- [09:28]
B
Somebody's got 10 years of sales on their resume does not mean they were trained on how to sell.
- [09:33]
A
They've been trained. Figure, yeah, they may have been trained on how to take orders.
- [09:39]
B
That or they were able to hide real well. They were in a rising tide market. There's a lot of reasons. But my point, going back to what you're talking about is saying, look, break your sales process from soup to just pick five metrics and say, how do we get more first meetings to the second meeting? Because it's not a hundred percent. It just isn't. So that means you would begin to look at the ratios of the number of first meetings you have, discovery, whatever you want to call. I call them the first actual meaningful two way dialogue meetings. How do you get though, if you're doing 50 of them a month, how do you get it to 5% more than that? Just 5%? Well, that would require you to examine how it's being done, how you're training it, observing them, coaching them, but tracking the metrics. And this, this whole thing with the, the cycling team is so metaphorically right for, for B2B sales organization and inside. I mean I spent my first eight years in call centers at Gateway maximizing call routing and inbound calls and managing queues and managing conversions. You want to know why Gateway did so well? This is what we did. I just didn't have a label for it. And we would myopically measure everything from talk time to conversion to average price to anything they added on. And we tracked it and measured it. We displayed the results on a big scoreboard so everybody could see who was doing well, who was doing okay and who was in the, we just called it the red zone. You didn't want to be in the red zone. Trust me, I'm very uncomfortable, especially the divisions that I ran. So what I'm imploring everybody to think about is how do you get a 5% incremental change over 5 to 7 data points. Now you can just do the mental math of when that happens. Most organizations are only thinking about proposals and closing. Proposals and closing. Send more quotes, Send more quotes, send more quotes. Well, is that really the only metric you want to measure? Because there's a lot of work that needs to be done for you to send a quote that has, I'll just say an integrity based quote, you know, spraying and praying, you know, so you know, here's what here, Weak seller, Mark, weak seller. I get the appointment and I, and because I don't know where to call and how to call, I'm going to go to the easiest place, which is procurement and, and procurement gives you the time of day and says here's my price list of your competitor, come back to me if you can beat it by double digits. And the seller's like woo hoo. And they're going to the manager to say yep, we got to go below our margin threshold because if we want this one. And then I, then I look at the aggregate and I, I, the same president, I said, well I see your revenue. You know, you're buy 7% per year, but why is your margin dropping? I mean that's the, that's the death spiral of any company.
- [12:40]
A
Okay, you've said quite a bit there. And again it's looking at those little things because again, you eat an elephant one bite at a time. You know, as you were sharing that, I couldn't help but think back to the super bowl probably about 15 years ago now, maybe between the Atlanta Falcons and the New England Patriots. Remember at halftime the Falcons were up by like 24 point or 22 points if I remember right. And it looked pretty grim. But you know what, New England came back to win and Tom Brady made the comment, he said it's just one play at a time, just one play at a time. But I think this is where so many salespeople and sales organizations go awry. They look at the end number, they look at the end number. This is the number we have to hit at the quarter and they fail to look at the individual steps all along the way. How do we improve those steps? What you're sharing is so valuable. Okay, so do you suggest an organization attack all five or seven at one time or attack one? But here's the situation. Does an organization have enough time to do that or a salesperson have enough time to do that when they're staring a big number at the end of the quarter that they got a hit or they may lose their job?
- [13:56]
B
How do you balance? It's a simultaneous look. But Mark, you know this as well as I do. What gets measured gets managed. And most people are not looking at their, their flow of whatever their stage gates of the sales process. They're not looking at it that way. They're only looking at how many proposals are out. What can we close? How can I help you close? Co. Co co Coats. What I'm saying is that that is important. I'm not denying that. But that's typically why organizations are flatlined. That's typically why organizations are getting their lunch ate by a low priced competitor. That I just, I've just seen the movie so many times, I know how it ends. And I'm saying how do you while you're doing this, let's measure the number of first appointments to a second appointments. And you got a ratio right now. Okay, that's a ratio. What needs to happen for us to get 5% better? Is it training? Is it coaching? One on one observation? Is it making sure that we're posting these numbers in a public fashion? Say we're looking at it during the weekly sales, sales management meeting. So you have laser focus on five factors. The backside takes care of itself. And that is the way to systematically grow an organization. Because guess what? If you can improve those five metrics or seven metrics by just 5%, I'm not talking going from a 20% conversion to a 50% conversion. That's not, that's not a likely situation in a mature company. But to go from 20% to 22, that's possible. To go from, you know, 50 meetings a month, that, that, that turn into a second, whatever that second meeting is. I, when I teach, like if you're doing anything that is somewhat of a complex sale, then you need to run that righteous first meeting. I think Lee Sols. Do you know Lee? Are you his first meeting differentiator? It's so spot on. You know, we hear so much Mark, like if you just look at LinkedIn and all the places that are, you know, we can get you more meetings. We can get you more meetings. Well, what if you're not training your people on how to run that great first meeting? That moves it to first of all, asking the right questions, understanding their situation, understanding their desired outcomes, understanding the gaps between where they are and where they want to be, being smart enough to ask intelligent questions as to why something is off track and understanding what they've done to get to where they are. I mean, you got to be intelligent enough to ask those questions and then moving it to something like not just let me show you my pricing for my widgets, like let me show you how I can help you grow. Let me show I can help you stop this problem. Let me show how I can help you retain your employees or create record breaking growth or improve your margins. And as you do that, it's like just look at five to seven key data points and say what needs to happen to move these up 5%. And you know, there's growth, the traditional whatever 10, 12% growth rate that most companies go at, but then there's geometric growth and that's what I get hired for. People don't want just more of the same. They, they, there's a reason that that owner wants to sell. They've just gone from number two in the industry to number five in the industry with the same products in the same market going up, the same customers. They need radical shift. Sales training will help that. But sales training without measurement, hard to say if it had any impact. Sales training without weapons, being driven by marketing case studies and white papers and education data and decks that are not just who we are, what we do and why we do it, but a deck that is talking about typical problems that senior leaders are dealing with in that industry and how your widget or your method or your advice or your system that you sell enables that to be better. So, sorry, I got, I'm getting a little bit all over the stream about this.
- [18:11]
A
Yeah, I, I love what you're saying because it also creates exponential growth. So we'll say I go from 20 to 22%. So I get growth this year. But you know what, that sticks with me year in, year out. And if I just every year look at what are those five to seven things that I'm just going to get a little bit of growth in, it's amazing at the growth I can achieve. Great conversation, Gene, how do people get in touch with you?
- [18:37]
B
You know, the favorite place for me is LinkedIn. I really spend a lot of time there. At least, at least an hour today there are three to five very thought through and well thought through posts that go out so you can learn. You know, I'm literally, when I make posts, I'm thinking about challenges that my clients had that I had to step in with the answer. I'm thinking about patterns that I see in the marketplace because I talk to a lot of businesses, I'm on a lot of podcasts like this and but, but I'm also in the trenches. I carry a full client load and I'm very grateful for that. But I get, I am in the world of solving problems so I get a chance to write about that. So I'm not pontificating, I'm not just throwing something into, you know, chat GPT and seeing what it spits out. I do use it, don't get me wrong. But I'm talking about real world things and people that read my posts usually are. You know, I appreciate all the comments and that, but find me on LinkedIn, send me a DM1, had a quick chat. I'm glad to do it.
- [19:36]
A
That's great. Gene McNaughton is who we've been speaking with today. Talking about what are those little things that you can just improve, create additional gain each year. Hey, my name is Mark Hunter, the Sales Hunter. This is the Sales Hunter podcast. Two episodes a week, one like this. This where you do a deep dive with a subject matter expert. Second one where it's just me, where I take on a single topic. Hey, do me a favor, leave me a review on your favorite podcast app. And if you haven't picked up the book Integrity first selling, you need to do it and share with me your comments on that. I'm Mark Hunter the sales hunter. Great selling.