In our previous blog post, we began setting the stage for The Automated Salesman. We started by diving deep into the process and results of the 4 types of sales.
The biggest challenge associated with the education sale and the entire sales process is to understand how the traditional model has worked for the longest time. What is the old school sales model? How has it worked and where does it fall short?
Today we will dissect the old school sales model and analyze the processes, problems, and dreams behind it so we can take one step closer to The Automated Salesman. Read on to learn more about the old school salesman.
The Old School Model
The old school sales model has parallel processes on the prospects’ side and the business side. Even way back in ‘92 when Kevin Hutto worked at Bear Stearns, he was taught to use this model. His “job” was to open accounts and convince people to send $10,000 to buy stock. The model he was taught was to make 100 contacts every single day, which took him close to 1,000 dials every day.
As far back as that or further, there is something that must cause the person to identify as a prospect. The old school model that he used to work through began with an initial call. He would talk through and dig in with the prospect. He would then set up another call to tell them about your solution and how it works. Usually, the prospect wants to digest it and think about it. So then, you set up the next call. What do you do at the end of each call? You set up the next call.
Eventually, you get to the closing call. On that call, you handle objections and work through the doubts. This is the traditional enterprise selling model Kevin learned from the head of sales at lawyers.com, even after is Bear Stearns days. After the closing call, you have to follow up and continue trying with the ones that did not close during the closing car. This process has been “proven” in the corporate world.
As the prospect on the other side, you feel ice cold. In the ice-cold stage, they don’t feel they have enough information or time, and they aren’t sure they even need you. As they warm up, they think you are okay and consider how they could use you, but they don’t want to make a mistake. Eventually, they cross the chasm of trust and feel comfortable and ready to do it.
The Problems of This Model
There are several downfalls to the olds school model. Some of the cons include:
- Requires a ton of time
- It’s a slow process.
- Increases business complexity.
- No leverage.
The biggest issue with this model is that it requires lots of hours. You spend a ton of time just closing one sale, and people still do some version of this when selling high-ticket services. Typically, prospects will need to speak with someone several times before being willing to spend tens of thousands of dollars.
The big issue is that all of those man-hours poured into this model raise the cost of customer acquisition. When the costs go up, the profits go down. Especially when you multiply this. For every person that closes, there’s three or four that don’t and you spent up to nine hours on each of them. If you’re a single-person team, then this is the reason you cannot scale despite your high price. There is only so much you can do and so much time to dedicate to getting new clients.
Having this much time in manual work and such a slow process, it messes up your revenue cycle management . Your money is not churning fast enough for you to reinvest it in the business. It’s one reason that many realtors don’t scale their business, they often do not get paid for up to 180 days and don’t carefully spend the money. You feel a greater sunk cost in deals that you lost. This can create worse habits, like taking on unfit clients just because you spent six hours with them on the phone. You may know they will be a pain in the butt, but you don’t want to cut it lost because you have a sunk cost invested in the time you’ve spent trying to get them as a client.
Another challenge is that it increases your business’s complexity. Within this model, the way to scale is to hire more salespeople. When you hire more salespeople, eventually you hire bad ones that you need to fire. You also need to hire managers to manage them, and HR people to manage them, and soon your business becomes really complicated. You could do 4x the revenue but not make much because it all has to go to these people you don’t want in the first place.
The leverage that you have is linear, and it like one-to-one growth. Because of this, as you add levels of management, your margins decrease. In this model 1+1 does not equal 2, 1+1 would equal 1.5. You must pay for others to manage.
Inconsistency. This method is not consistent. You have the variables of human motivation and human error. There are shortcuts, and people have bad days for personal reasons. There are misaligned incentives when people are getting a commission to make sales. The seller wants to make a commission, so they may sell hot or use other types of sales that are less reliable just to close the sale.
In reality, the old school sales model has some serious issues. However, there is a “sales dream”, an ideal model that we would all love to have. The dream includes:
- ZERO man-hours. To be able to sell with no man-hours would be ideal. That way, you could sell without having to consistently ramp up the team or yourself.
- A compressed time period. The second thing is to speed up the process, and bring someone from cold, to warm, to hot much quicker than long, repeated phone calls in the old school process.
- Simplifying business. The dream would require less staff, which simplifies your business.
- Ultimate leverage. You don’t have to grow your staff size to sell more because you can buy more clients with the advertising mediums available today with Google, Facebook, LinkedIn, etc. you can bring on clients without having to bring team members on the front-end. You may need to bring on team members on the back-end to service clients, but that’s a good thing. The better service you give, the stronger your business gets over time because you have all these good results on the marketplace that will work for you.
- Predictable results. If people come in the same way every time, then you will have a consistent delivery expectation from those people. If some come in hot because the salesperson needed to close to get their bonus, that is much different than when people are coming in the same way through a uniform, automated fashion. Client uniformity is key to scale because your delivery team does not need to create a unique process each time.
There are excellent books that illustrate the importance of client uniformity. “Traction” and “Get a Grip” by Gina Wickman discuss a process called EOS. EOS is a management process system, and one major issue that Gino explains is the combination of the sales and marketing team and product and delivery team. They explain how the sales and marketing team is always “lobbing turds over the fence” that the delivery and product team has to polish and turn into something. That is exactly what you don’t want, an antagonistic nature of the sales and marketing to delivery and product.
Instead of trying to automate delivery, the idea is to automate the sales and marketing process.
The Automated Salesman
A lot of what we outlined is the utopian idea of what we want to hold onto without the challenges. Whether you want to scale or not, automation will ensure uniformity and proper prospect education.
“Scale” can mean something different to different people. It doesn’t have to be a large business with a ton of employees. Many people want to scale their income, but the only way they know how to do that is by hiring a bigger team. The big problems many businesses face all stem from the tug-of-war between sales and delivery, which often leads to hiring more salespeople and then people to manage them and then people to ensure everyone is compliant.
Lead generation is the basis for our business at Best Seller Publishing. While we help you use your book to attract leads, this is common for another coaching, consulting, and service businesses as well. The key is to leverage and combine technological processes and automation for a more effective process. This is the foundation for The Automated Salesman, and many more pieces to come.
For a more predictable front end, you will need to move past the old school sales model and into the cutting-edge model built on automation and scalability. With this new model, you will be able to avoid many of the pitfalls of old school selling and enjoy the dream aspects we all wish we experienced when it comes to sales. We look forward to sharing The Automated Salesmen with you in the near future.
In the meantime, if you want to prepare to take advantage of The Automated Salesman, your book is a great first step. Bolster your credibility and lead generation with the strong magnet of your best-selling book. To learn more about the importance of a book or to get started writing, publishing, and promoting it, schedule your free strategy call HERE.