Building a Scalable Sales Strategy
David wants agency principals to develop new business plans which delivers more new leads with less labor so their organizations can have more controllable growth, as well as increasing their likelihood for a successful exit when that time comes.
Links
2Bobs episode: “The Rungs You Can Reach on the Ladder of Lead Generation”
NY Times article: “How a Self-Published Book Broke ‘All the Rules’ and Became a Best Seller”
Transcript
Blair Enns: David, there are some words, lots of words, where we think we know the meaning until somebody goes and looks them up and throws them in our face, and one of those words for me today is the word "scalable". Did you look up the definition?
David C. Baker: No. Uh-oh. Oh, shoot.
Blair: Maybe it's wrong.
David: What do you have over my head?
Blair: We're talking about scaling your sales or your new business efforts. This is a post that's already dropped. You open with, something that's scalable can create additional output without a matching amount of input, and I thought, "Oh, I didn't know that." It's more efficient.
David: Sounds like a dictionary, but it's just my intelligence coming through. You read me and you think, "Oh, that sounds like he took it right from an academic and he wrote it."
Blair: He's faking it. We're going to look it up and it's like, "No," because I thought scalable just meant you can grow this thing. You're saying there's an efficiency element to scalability, which is, no, it's scalable, you can grow it with a disproportionate amount of additional input.
David: Yes. In a time like this is where it seems like it comes up more frequently because people all over the place are saying, "You know what, I'd like more sales right now. Okay. Should I just do more of what I'm doing?" Then you think, are they spending time? Time is-- that's a really precious resource and we're not creating more of it. What about money? What if I pour more money on it? Would it be more impactful? That's what got me thinking about it.
It's always so awe-inspiring when I step into your territory in sales-
Blair: Vice versa.
David: -and I'm terrified, oh my God, like, "What's going to happen here?"
Blair: He's sharpening the knives.
David: I sent you these notes a while ago and then I got COVID, so we had to postpone the recording of it. Then I'm working on the farm and I'm thinking about this, about scalability, which is a little bit like leverage too. Here I live on a farm, I weigh 182 pounds, that's if I take everything off and everything out of my pockets, which I insist on. It's like, "Can we redo that? Let me take my phone out of my pocket at the doctor." No, 182. I have two grown boys who have moved off the farm years ago.
Here I am, one person instead of three adults who could do things. All the same stuff has to be done. I've still got to hook up a 4,000-pound Batwing mower. It's just me with my brain and my limited ability as 182-pounder. I have to think of leverage and leverage is like scale. It's like, "Okay, I got to think about this differently." If I need more new business, the solution is not automatically just to spend more time doing the same stupid shit I've been doing. Maybe I need to rethink the whole thing. That's part of it.
Then the other part of it is, when you go to sell your firm, what's the biggest concern that the buyer has? It's replacing the principal and the principal's role is to sell. That is not the, but one of the most important things for them to manage. The buyer is thinking, "How are we going to replace this person?" Beyond that, let's say that they're buying a firm with a fantastic scalable new business system in place. Let's pour more money on this fire and let's just grow even faster. It just got me thinking about the whole scalable sales thing.
Blair: It's a great topic. It's really got me thinking about some things and some specific moments in my own career come up, one not too long ago, after we had our best year ever, sitting down with the marketing team. It was like, "Okay, how are we going to grow again next year, this year?" The answer was, it wasn't the inverse of scale, but it wasn't a scalable solution, it was, "You're going to have to work even harder." Like, "No."
David: Next suggestion.
[laughter]
Blair: We're going to do even more of what we've done. You're going to work even harder. No, this is not sustainable. I really like the topic. Two reasons to scale your firm. The first is, and you've covered both of these, I'll just summarize, it allows you to grow in a more controllable manner. The second is it increases your likelihood of a successful exit. I know some people are thinking, "Well, I'm not really thinking about an exit." We'll come back to that second one. Let's talk about the first one a little bit. How does scalable equals successful?
David: I don't want to be viewed as painting with a broad brush here and say, "You shouldn't be doing the things that are not scalable." For instance, one of the things I've learned from you is the role of cold outreach. Whereas I would have just completely dismissed that in the past as something that experts don't do. There's some things that happen in cold outreach that don't happen anywhere else. You learn from the nos. It's real time. You don't have to wait for four months to see how a campaign needs to be tweaked. There's nothing stopping you from doing it.
There's all kinds of real benefits to cold outreach, but it doesn't scale. Now here I'm dipping into the part of cold outreach that people hate. Somebody who's an introvert that doesn't want to do it and doesn't have the skills for it, and some sales coach tells them, "All right, all you need to do is to make four calls a day to people you don't know and tell them how they really need to hire you." It's like, "Oh no, I cannot do that." The idea of doing eight of those a day is impossible.
I'm not saying that all the things that you do that are not scalable aren't good. I'm just saying they're not scalable. Before I go into some of those examples, how do you react to that statement about the cold outreach?
Blair: My first reaction is it's absolutely scalable by hiring people, but you're really talking about the work that you see that the principals should do for themselves. You can scale the outreach function by hiring a person and then a second person and a 20th person and staffing a call center, et cetera. That is scalable.
David: It is. You're right.
Blair: Maybe your point is you can't scale that type of outreach in the way an expert-based business should do outreach.
David: Right, but you could. You could pour money on it and it wouldn't take more of your time if you had the right people doing it. Yes, that's a good correction.
Blair: Can I bring up the AI topic right here?
David: Yes.
Blair: Because it probably applies elsewhere, but I'm sure there are some people sitting there thinking, "No, I've scaled my outreach by using AI," and there are more and better AI co-pilots or enablers coming in the future. I'm seeing outreach scale already. It's going to scale even more. Is that a valid way to think about scaling outreach?
David: Wow. I use AI in research and I love it. There's two search engines I'm using that I really like. What you're talking about is something different. I guess the first thought is, "Okay, that's not going to give me an advantage because everybody else is doing it." If I'm looking for a unique advantage, then that's just simply doing what everybody else is doing and that doesn't deliver it.
Now, if I'm first to the table, that might give me six months of runway before other people figure out how to scale their outreach, but it's an efficient marketplace to use in the economic term. We just lop off the heads of the people who are too far ahead and then we'd let the people who are too far behind just sink. I don't think it's a permanent strategy, no. What do you think?
Blair: When we think of the ladder of lead generation, we've talked about before, we'll post a link in the show notes, where basically you take all your lead generation activities and you put them on this ladder. At the bottom, you've got the sales-based activities of outreach. At the top, you've got these high-status activities that drive inbound inquiries to you with you positioned as the expert.
Say writing a book would be the activity at the top and cold outreach is the activity at the bottom. It's at the bottom, not because it's not effective, it's at the bottom because it's low status. I think your point on AI is that we can use the AI to fairly easily scale the low status activities, but everybody's doing that, so it all just cancels out.
David: It's going to be interesting to see what happens to all this because nobody really knows for sure what's going to happen. I keep thinking of Altman's claim that, was it 95% of all marketing will go away because of AI? It was some ridiculous number, more than 90% anyway.
Blair: At first, it's going to increase by 95X, and then maybe it'll go away. We're going to get to this place where we have promptless email generation, where our CRM or whatever piece of technology we're using, AI technology, is going to say, "Hey, this person hasn't done this in a while, therefore I've crafted this email. Approve it or edit it and hit send." Then we'll even get beyond that point where it's not asking for approval, it's just through these promptless intelligence, it is crafting and sending individual emails to people in our database. The volume of email is going up.
David: My perspective is that that use of AI is very good, part A. Part B, everybody's going to be doing it. You're not going to stand out.
Blair: As everybody does it, we will respond less and less to these inbound inquiries. I think the net effect of this is the other activities on the ladder of lead generation, some of which you're going to talk about here, become more valuable.
David: It's interesting to look back over decades and see how as an industry, we've adapted pretty well to new technology. There wasn't anything digital at one point. UX did not exist at one point. Digital marketing did not exist until 20-some years ago. We're going to adapt to it.
I'm not worried about that. I'm not even worried about whether we'll keep making money because there's always going to be that busy sort of work. What I lament is, are we going to gain more power as an industry? That's really the only thing I care about because I think we're going to have the same amount of power we have now, which is not much. [chuckles] We'll see.
Blair: You and I keep talking about doing an AI episode and we keep waiting for a pause in the momentum for things to just settle into a place for a little while so we can do that, but it's moving too quick. Maybe one day, people. Maybe in 10, 20 years, we'll do an episode on AI. Back to some of the more scalable elements of your new business system. We've talked about outreach and whether that is scalable or not, but let's get into the more meatier stuff. What's on your list here?
David: Some examples here. For instance, you're doing webinars and you think, "Oh, I should do more webinars." No, maybe you just need a bigger audience, and maybe the webinars are fantastic, there's a good ROI in your effort, but you're just not reaching a big enough audience. Go borrow somebody else's audience. Maybe you've written a book. Maybe you've done the hard work of writing a book or maybe it's a booklet or a really good influential sort of white paper. Maybe you just need better distribution of that sort of thing. Instead of doing more of the first level sort of stuff, maybe you just need more distribution.
Blair: Can I just double-click on an element of that?
David: Yes.
Blair: You said a couple of sentences ago, go borrow somebody else's audience. That is an often overlooked tactic in some worlds and I think in our world largely.
David: Why?
Blair: I don't know why. I see marketing firms in particular that have small lists of followers, of subscribers, of audiences that are listening to whatever they have to say on a certain topic. If you can position yourself as an expert in something, it's a lot easier to go put yourself in front of somebody else's larger audience.
David: A lot of these organizations or associations that the agencies, like the people listening to this, your clients, those agencies that your clients belong to, they're looking for good content all the time. They have these dues-paying members, who are your clients, and they're bound to give them something in return for that. If you go to them and propose some great piece of content without selling yourself so overtly, they'll bring the audience for you.
When my clients do this, they'll bring a thousand people to a webinar. Many times, you get the email addresses of the attendees which you can use thoughtfully afterwards. Barring an audience might be the solution. That's what I was talking about.
Blair: All right. Webinars. You've also got podcasts.
David: Yes. Podcasts. Let's say you've written a book, you've written a booklet, whatever. Maybe you just need broader distribution. Maybe you need to do the podcast circuit. Don't send us a note, please. We don't have guests. I get two of these a day and I've started to cuss them out for sending like, "We really love your podcast and I think this guy would be a perfect guest for it."
The podcasts that do have guests, maybe you're a good fit for that, or an SEM spend. Maybe you need to commit to X amount of money. Maybe it's $2,000, $3,000 a month or something, and you have an expert spend this every month and tweak it accordingly. Then once you get it right, once there's a good ROI, then pour more money on that, because you do probably have more money than you have time, and that would be a scalable thing, or speaking.
You're starting out here and you're just speaking on a panel at an event. Maybe you go and do a breakout and then maybe you do a keynote. Now you have more people listening, you're not sharing the spotlight with somebody else, and that would be something that's more scalable, or you speak to an even bigger group of people- not your peers, but people who would buy your work.
A network of mutually beneficial referrals. This is really big for me but it also emerges from how I think about professional services and that part of my commitment is to not take work from somebody where I'm not a good fit. That means I need to be able to send them to somebody who can really help them. That's not me but I can help them by introducing them to somebody who can help them. I selflessly do that and I don't take any referral fees. Meanwhile, those same people, every once in a while, will send somebody to me that just like me, they couldn't help but they think I could help them.
It's so fascinating to me to look across the whole landscape of marketing creative firms and to see how so many of them are successful using completely different methodologies. There are some firms that have a really active list. There's other firms that are just great networkers. There's other people that do outbound all the time. There isn't a single answer that's right for everybody, but you do want to look at what you're doing and say, "How scalable is this?" Then even if you don't want to sell your firm, maybe you just test yourself and say, "All right, how would an outsider view this? If I were hit by a bus, what would happen to our new business system?" Anyway, those are enough examples of by scalable though.
Blair: Do you have any thoughts on what is the most scalable? Because a lot of these things are on a spectrum of there's a certain amount of work yielding a certain return in audience size ultimately and client size. What's the most scalable marketing activity or lead generation activity?
David: I think it might be different for different focuses. If you're in higher ed, you're still doing trade shows, oddly enough. If you're marketing to professional services, it seems to me like maybe individual invitation round tables might be really important. If your focus is more B2C commerce sort of stuff, you probably need a speaking and a writing career. I think it might be different in each case. I'm not sure.
Blair: Let me lie on your coach for a minute. I finished, finished, finished-- I think I've said this before a few months ago, but I-
David: Until I hear four finishes in a row, it's not finished.
Blair: I finished, finished my most recent book. It's going to the designer in five days. The editor has four days. I looked. It took me 39 months to write that book, a little over three years. I thought it was over four years. It's felt like four years. It's taken me hundreds and hundreds of hours. It is the most valuable marketing I can do, is write a book, but I don't think of it as scalable because the effort is just-- If you hear the exhaustion in my voice, that's the source of it. I'm just exhausted from the process. Is that scalable?
David: I think it is, but it has to be a good book or it's not scalable. I'm going to grant you that. I'm going to stipulate that to the jury that it's a good book, but getting other influential people to push it seems to me like that's the scalable part of a successful book.
Blair: I think that's a big part of probably a blanket statement around the best way to scale, is getting in front of other people's audiences, which is interesting, because for years, I won't speak for you, but I've thought about just building my audience, building, building, building. Then, along comes somebody like Chris Do who falls in love with the Win Without Pitching Manifesto, does a bunch of videos on it, and I don't know how many books we sold because of Chris. Thank you very much, Chris.
That's an example of using somebody else's audience to leverage your success. Maybe I'm just speaking of myself. It's just something I haven't consciously spent enough time thinking about doing and therefore I'm extrapolating to our audience, but that's the lesson I'm taking away from this. Really, this is all about lessons for Blair.
David: Before hitting record button, we were just talking about LinkedIn and those strategies, and I'm in the middle of thinking, how do you scale your presence on LinkedIn? Can you do it without hacks? Then if you can do it legitimately, what if LinkedIn changes everything and then the next day, you start over somewhere else? It's nerve wracking, because when you think about the PESO model, paid, earned, shared, owned, you want to probably think about scaling something primarily in an owned category rather than another one. That's the slow, steady drip impact.
When you think about the others like earned, let's say you get talked about in the New York Times or whatever it is, man, talk about scalable. How do you get those kinds of things? Some scalable is intentional. Some scalable is just pure accident.
Blair: There's an article on the weekend in the New York Times about a woman who has sold a million copies of her self-published book and she's done it largely through TikTok, through using influencers on TikTok. That has got her the attention of the mainstream publishers. She's just signed a five book deal with Simon & Schuster with a seven-figure advance and a novel compensation structure beyond the advance. She's splitting the profits 50-50 with the publisher.
The publishing world is taking notice of the fact that somebody can sell a million copies largely on TikTok. They've rewarded her, and then they sign her and now she's on Good Morning America. This is somebody who's leveraging multiple different audiences, getting that exposure in the mainstream media, but she started by leveraging the audiences of others on TikTok. Now, she used to work for TikTok, so she knew what she was doing. I forget the woman's name.
David: I read the article too. Her book is called The Shadow Work Journal. I read that article too. I was really intrigued by the idea, and then I read a summary of the book and I was no longer interested. My scientific wannabe mind is like, "Okay, is there something that she did that we can emulate, or are there 5,000 people doing that and she just struck gold because of an alignment of the stars?" I just don't know.
Blair: Yes, it's a good question. We've talked about some things that scale. We've already touched on a couple of things that don't scale so well, like hiring and cold outreach. You can argue they are scalable if you do them a certain way, but I think the argument here is that you're going to be sacrificing the high status of the expert. Because everybody can do this, the net effect washes out. Talk about your second point about why you should scale, which is it makes the firm more sellable.
David: This is actually a question that will always come up in the early days of a transaction. Often you'll actually hear the word "scalable", "Tell us about your new businesses, and how do you get work in?" Here's what they don't want to hear. They don't want to hear, "Oh, we don't have to worry about that. We are so connected in the space and our work is so well known that we have so many clients who have taken us to their new jobs and so on." You can hear the pride in that, as somebody would say it. That is not what they want to hear because that is not a system they can control.
They want to hear something different. They want to say, "Oh yes, let me share my screen here. This is what our new business system looks like. This is how we fill the funnel at the top. This is how we move them down. This is how ABM works. This is our cost of acquisition for each lead. This is how long we keep them. This is how we grow them. This is our turnover and all that stuff." I could make up numbers for what they want to hear, but that's essentially what they want to hear. They want to hear a system that's replicable, that's scalable, that's real, that's not just accidental and very complimentary.
The reason is because all they care about after the sale-- I probably shouldn't say this, but I will, they don't really care about anything else except revenue after the sale. The only reason they care about sales is the degree to which it will contribute to revenue. We've talked for most of this episode about why you want this to be scalable so that it's efficient and effective, but here there's an element, too, around just what a buyer might look for.
I would argue that the buyer's interest here aligns with yours. Even if you have no interest in selling your firm, I think what they want you to have if they talked with you is the right thing so that, for instance, you can scale back over time, so that you can take a sabbatical if you need it. It's not like every sales thing is scalable or not scalable. It's more like some are more scalable than others, and I just want people to think about a system that they control and that they can turn up and down.
Let's say I need work this next week. I can send an email out to tens of thousands of people, and I can gently say, "Hey, any of you interested in such and such?" Now that's a system. That's a switch. That's like that big red "Help" button that they had at that stationary supply store. I just want you to have some system. I want you to have something that works. I want you to be able to describe your new business system in a way that makes it-- If it's a system, it probably is scalable. There's lots of nuance around that. Anyway, that's my thought.
Blair: All right. Let's wrap it up. You think agency principles are actually pretty good at new business. Is that right?
David: I do. I keep wondering if I'm right about that. I do think they're pretty good at it. I think generally they need more at-bats, but they're pretty good at sales. They're not as good as they could be at sales or pricing, which is why your world is really valuable for them. I think they're generally pretty good at sales.
Blair: What should they be working on?
David: They ought to be working on their positioning. That's one thing they're not very good at. Obviously, there are some firms. Then they ought to have some marketing to push that positioning into opportunities and then have a system on top of it. It's not rocket science. Neither of us have said anything in here that isn't new information to people. Here's the bottom line. If you can solve the new business problem, you can solve everything. Everything else will get fixed. You'll figure it out. This is what you do. You figure things out. If you don't have the new business thing solved, then nothing else matters. Not just having it solved, but also when the water starts to drop in the lake and you start to see the sunken logs and--
Blair: As it is now.
David: As it is now. Right. Exactly. You start to see some of the weaknesses in your sales system that you just ignored because everything was fat and happy. Well, pay attention to that, fix it, think about it. That's the message.
Blair: There are times when sales are just humming, things are just happening, and there are times when they require a lot of effort. There are times when you're trying to get to the next level, and you're asking yourself the question, "What do I need to get to the next level?" As the answer was put to me a few years ago, the answer is more effort. The answer can't always be more effort.
To your point that a lot of our listeners are actually good at the code word that we use for sales, which is new business, they're actually good at it, I think universal would be too powerful a term, but I think it's widespread that the new business or sales success is not systematic enough and is therefore not scalable enough. To your point about your interests are aligned with the buyer on the subject of the stickiness of revenue, the predictability of revenue, that which makes your firm sellable is the attribute that also allows you to sleep better at night. I think we can all benefit from making sure that our efforts are scalable.
David: Yes, good summary. I should have been interviewing you. Would have been a better episode.
Blair: Between stomach flu brain and COVID brain, we pulled it off. Thanks, David.
David: Thanks, Blair.