Monday Oct 19, 2020
EP53: Myths and Misconceptions of the Cold-Calling World
Chris and Corey continue their discussion with Valerie Schlitt, CEO and founder of VSA, which began with the Market Dominance Guys’ podcast, When Operational Excellence Meets a 9-Foot Wall. Making another observation about operational excellence, Chris begins this session with the statement, “A big part of operational excellence is recognizing that you don’t always have the resources that you need to get the job done perfectly — or even well.” Valerie thrives on solving problems just like this one and is adept at addressing problems in unique ways. Together these three sales experts tackle the issues of maintaining operational excellence while running a business — either before or during a pandemic.
As their discussion progresses, they debunk several myths about the best way to plan a cold-calling campaign, they tear apart the misconception of how much time it takes to onboard a sales rep, and they share some of the unexpected employment backgrounds that have made for the most effective BDRs. Always intelligent, often irreverent, Chris, Corey, and Valerie delve into what works — and what doesn’t — in the world of sales. You won’t want to miss their insights!
About Our Guest
Valerie Schlitt is the founder, owner, and CEO of VSA, a B2B call center that helps clients generate leads and produce new business. Valerie also heads up the Philadelphia chapter of AA-ISP.
The complete transcript of this episode is below:
Chris Beall (01:48):
I think a big part of operational excellence is recognizing that you don't always have the resources that you need to get the job done perfectly or even well and sometimes you just have to guess. And if you don't have a formal process for entering guessing mode and then doing the guess and then treating the guess as a fact, I think it's really hard to do. And I think it's a distinguishing feature among operationally excellent leaders, is that they know that they're the guesser and when it's time to guess, they're upfront about the fact that they're guessing.
Corey Frank (02:26):
So would you say Chris that all most operational mandates, operational posits, facts today have its origin story in a guess yesterday?
Chris Beall (02:39):
Usually yes. And COVID's a great example. When COVID hit, we were suddenly all out of time and didn't have very much information. How did we know we were out of a time because we could ask our CFOs when we're going to run out of money?
Corey Frank (02:52):
Chris Beall (02:55):
That was the March 22nd question this year. You got to the CFO and you say, okay, so in scenario number bad, right, where all of our customers can't pay us, 22 million people die. When do we run out of money? And then you can reason your way to all sorts of stuff but you don't have enough information to tell you what to do and so you take a guess. And you got to do it fast, the brick's been thrown at your head. I mean, COVID was a pretty quick little brick. And so we guess.
And I think that's where the great stuff tends to come from because when we're doing what we know how to do, we're doing what we already did. So it's not comforting. It's not comfy at all. I mean, the people often ask me, what's the deal with leadership? Aren't you the leader if people following you? And I would say, not if they're just following you on a trip to the ice cream store. No. You got to be crossing the freeway with the busy traffic and in the dark with a dog chasing you. Then you find out if you're a leader. If they follow you then, maybe.
Let's talk about that operational excellence theme about guessing, right, in terms of Valerie at VSA, right. It's a top of funnel firm and you talk about... Chris that should we do everything as a leader, as a CEO, as a VP of sales, as a sales manager? And certainly Valerie, a company like yours and Chris, certainly a weapon like ConnectAndSell, right, are two such vehicles where... I've got across this little chasm here, I've got to... I'm faced with this nine foot wall. Do I want to go down? Do I want to just stick with mountains or do I already have a predictable pathway? You chose to go the path not traveled, right, the way not mapped yet.
So Valerie, from an operational perspective, when somebody lands at your doorstep as a VP of sales, what do they... Say Valerie I need help. I cannot do X anymore. I've reached the limit of my potential with my team and why? I don't want to hire any more folks. I want to try this new particular market. I want to test some new messaging. What state do you find a lot of the folks emotionally when they arrive at your doorstep whether to engage in VSA or not?
Valerie Schlitt (05:29):
As you probably know they arrive in all different states, but I would say the most common state is they know they have a problem, they don't want to or have any idea how to fix it and they have hope. They are optimistic and we've developed trust. So from there... I mean, obviously what we do in helping people set appointments, a lion share of it, I don't know, 75% of it is the same for every single client, but that other part makes a big difference on whether we're going to be successful for each individual client and that is the messaging or the team that we put on a program or the cadence that we call with, the list that we choose, all of those things. And I think of it as this big multi-dimensional puzzle that you have here, where there is part of it that's the same and all the rest can be switched around in different ways and always need to be switched around. It never stops.
You try something in the beginning and, okay we're going to go with this message with... So we have a team-based operation, which means that we have three or four people on a certain client that comprise one full-time equivalent. And the reason for that is we recruit people in a very different way than other people do, other firms do. And that we are not actually looking only for sales people, we're looking for people who have great communication skills, can engage, they're inquisitive and they also often only want some kind of a part-time job because they have other commitments. So there's this whole group of talent that cannot work in the traditional nine to five role and we get them. So we put them all together in this team and they share their feedback, they share what works, what doesn't work and they get kudos from each other and bravos. There's a whole team orientation that we talked about earlier. They're not doing it alone.
And that way we can also see who is producing, who's not producing and if someone's not producing then we can take them off and we know it's not just key person dependent. But who we put on that team is going to be dependent on who fits well with that particular client's problem. It could be what the outcome of the call is, it could be the industry, it could be the type of product, whether it's a service or an actual offering product. All of these little things have to be put together and you take your best guess based on 19 years of experience and start off a program that way.
Always telling our client being transparent that we are going to be making changes as we go forward, because there's going to be things that are not perfect in the beginning and we're going to have to make adjustments. And then comes the fun part, I think, which is making adjustments and seeing what actually leads to improvement. And then you want something that in the long run is pretty smooth sailing, always knowing that there is room for growth even after we've optimized as much as we can. Did that answer your question?
Corey Frank (08:48):
Yeah. So what is that common myth that you've seen over the last 19 years that can be most easily debunked or demystified, right? Chris talked about, hey listen, I can't do it all. And you have to kind of cross this mental chasm to get to another layer, another level of maturity, of business maturity, I can't do it by myself. But in relation to VSA and the business you've built over 19 years, what you find is that one or two big common areas that are debunked about an outsourcing firm, about a telesales front, about a top of funnel firm, that it doesn't take you too long for them to run your Jedi mind tricks to say no. In their whole world inception just comes tumbling down. That they thought it was a tree hugger about this for years, you come in, debunk this theory that they had and it opens up an entirely new world.
Valerie Schlitt (09:47):
There's so many, but I'll go through some. We don't need to know everything about your product or service in order to be successful and deliver qualified appointments.
Chris Beall (09:56):
Corey Frank (09:59):
Well you don't understand Valerie. My product is different.
Valerie Schlitt (10:04):
Exactly. You're so unique and so... We treat every client as though they are unique and every client is unique. But we need to know enough to connect with someone and give them a reason to want to talk more. And we have to be really good at that and not go any further because if we go further then we're going to ruin it. And that's... No one wants that.
Valerie Schlitt (11:05):
Another one would be that you have to have seasoned salespeople on the phone in order to be successful and we have proven that you don't need that. You need a certain personality, a certain inquisitiveness, confidence. They can't be afraid to talk to someone on the phone but we make them really excited to talk to people on the phone after they've been with us for a while, but at least they can't start off afraid. So you don't need a seasoned sales person. Cold calls really do work. People think that they might not work. Although by the time they come to us, they're open to it.
Corey Frank (11:41):
Valerie, I think just those three alone Chris, we should probably have Valerie out irregularly and change it from Market Dominance Guys to Market Dominance People, Market Dominance Prefect. I mean, this is... you're speaking the language that Chris has taught us over the last year. This is great stuff. So keep going. This is a great list of these debunked myths here.
Chris Beall (12:02):
You know there was this big ramp time thing and we had a funny thing the other day where [Sean Cece 00:12:07] who is working with us for a while and is now still working with us but he's outside the company, he posted something on LinkedIn that had actual numbers of him ramping to set his first meeting for a brand new client on his own outsourcing business. And he had it broken down to detailed minute by minute kind of thing. And his conclusion was, yeah you can ramp a rep and a new message to be effective with a business they've never seen before setting appointments in two hours.
And I think it was the most controversial thing that I've seen anybody say in a while. A a lot of experts came in and said, but what about what, but what about, but what about, but what about, and it's like folks, I published the actual numbers. Here's the recordings. It's right here in front of you. [crosstalk 00:12:56] Yes, but you're really good. Well yeah, we weren't talking about starting from when a person is conceived and then they're finally born, we are starting with a human being who can talk on the phone.
Corey Frank (13:08):
I just finished an interview right before we jumped on here with a potential candidate to come on board here at young blood. And Chris and Valerie, you're going to kick in this because Chris, one of the questions that John and I my buddy here, we were asking him is, "Tell me about your last position." He was a BDR and SDR at a FinTech firm out of California. So I was like, well that's fascinating. And I ask him, "So you didn't do full stack?" He was like, "No. I was just a BDR." And I say just, but he was a BDR there for... he did quite well.
And so tell me about your onboarding process. Well, we had two months of sales training before we hit the phone. And I said, "I'm sorry. I miss my trick here. Did you say two months of sales training?" He's like, "Yeah." I said, "You mean product training?" He's like, "Well there's a little bit of product, but a lot of it was sales." And I said, "Were you hired as a sales rep and then a BDR?" He's like, "No. This is for all the BDRs go through this."
Valerie Schlitt (14:00):
Corey Frank (14:03):
We went over MEDDICC and BANT for two months and I was like, wow. I think that Chris or I should get Sean, get the name of that firm and have sent Sean Cece over there right away because, how would you'd like to take instead of 60 days down to two hours we'll give you the benefit of the doubt, four hours, and your folks could be on the phone to one of the myths to buttress what you were saying Valerie about. You don't need to know the product to be effective out of the gate here. Just be intriguing, you listen, some curiosity, establish some trust and some curiosity and you'll be pretty well on the way.
Valerie Schlitt (14:43):
Yes. Absolutely. That's amazing. Two months. That's a lot of investment that you could have used someplace else.
Chris Beall (14:51):
Yeah. There's a lot of opportunity cost hiding in there too when you really think about it. Everybody looks at this like, well I spent two months and that's pretty normal. I think two months is pretty normal onboarding for new BDRs out there in the tech world. And then the washout rate is about 60% over a four month, five month period. So now you have to take your two months and divide it by 40%, right. So you're going to multiply it by two and a half. So now you're five months equivalent on the mean and in five months I would expect a new BDR to set 2.3 meetings per day. So at 2.3 meetings a day times five months, that's 46, 47 meetings a month. So that's 150 meetings roughly speaking for three months and now we're out to another 70 or so 75. So we're in a 200, 250 meetings that didn't happen. And the value... [crosstalk 00:15:46].
Corey Frank (15:46):
Chris, they did happen. They happened for your competitor who's using ConnectAndSell.
Valerie Schlitt (15:49):
Not the case.
Chris Beall (15:54):
It's interesting how people do this math. And when you challenge them on it and say, "Well why are you doing that?" They generally will say, "Well, I read it in this book that onboarding works like this and blah, blah, blah." And what they're really saying is this, the longer this process is and the more elaborate it is, the more important I am. Because the biggest impediment to operational excellence in my experience is in politics. It's in the politics of importance. And it's very hard to be operationally excellent when the focus is on people being seen as being important, because importance, that sense of needing to be important or seen as being important has its own inflation built in. It's got its own version of, whoever's law you want to take or it could be Parkinson's law or some other law that says stuff expands to fill whatever it is out there to expand into. And the need to be seen as an important player expands and expands and expands.
I also think it's the reason that we tend not to see very many organizations operate based on the theory of constraints. Now, theory of constraints tells us that we have one bottleneck in our current process and it would be a really good idea to go find it, inspect it, characterize it, come up with an investment hypothesis, test that hypothesis and if it makes sense, if it works out, then make the investment and then stand back and watch the system settle down and see where the constraint goes. Well the problem is, everybody feels like they're unimportant because the constraint isn't in their department. And so they fight it.
And at budget meetings you very rarely hear say, "You know what, the stuff we're doing is going really well. I actually don't need any money next year beyond just resources to make it." But if you can get the politics out to the point where you can go after the constraints, and in this case the constraint is a false constraint around time. If you invested in this correctly and end up with the two hour ramp or the one day or whatever it happens to be, it's really challenging to get folks to say, "I'm part of the team. It's important that I do my job, but it's not important that I'm important or seen as important right now. It's okay that I'm just part of the team right now because my stuff's working." You guys ever see that or am I crazy?
Corey Frank (18:35):
I think it's part and parcel of the profession though. I don't want you to think about this Valerie, right. And you have a lot of part-timers, right. You say you have people who are... I'm secure enough in being a stay-at-home dad where I have a window or I'm secure enough to be a student who's going to law school where I have a window. It's my identity versus my role like Sandler talks about. And I think though that a lot of us who are full-time in sales, especially coming from the bigger organizations where you have the great equalizer is what's on the board. Or if I'm a sales manager, the great equalizer is how big is my team, right. It's the sense of importance, the sense of alternative currency is different than... And it has to do with people and time versus probably results in investment and growth.
And I think which ties back to our theme on operational excellence, right, is this element of developing a mindset where you don't have to put eight hours a day and talk with three people and spend 47 dials and send out 1000 emails. It's okay to feel your worth about how many people you talk to. Did you grow today? Did you learn something today? The word I think Chris had been stealing from you from a few months ago is ruthlessly curious. I think that's the word that you use that you try to perpetuate in your organization, correct?
Chris Beall (20:07):
Yeah. I'm a big fan of ruthless curiosity. And by ruthless, I mean, almost like a three-year-old asking why and not taking because I said so as an answer. And I think that that's a hard thing to have in an organization because it roots out politics all by itself, but it can also be used as a political weapon. And therefore it has to be managed. You can go around and ask why for the purpose of wielding power over people or you can ask why because you're genuinely curious. There was another element to this because some people are like that by personality, they're genuinely curious.
Valerie, I'm really curious about this. When you're going out to hire folks, do you find... The CIA and the NSA in particular, they love to hire people who come out of either theology backgrounds or philosophy backgrounds of some kind or music, musical people who are musical performers in order to be computer programmers on this really hard stuff that they work on, because those two kinds of backgrounds happen to be consonant with the skills that it takes to do that puzzle kind of work that you do in those organizations with software. And often it's surprising where the skills tend to aggregate in college, what people are interested in.
And I've seen an example of the best cold caller I've seen in years and years and years, was a therapist. I got to see her on her first day as a cold caller. Never done it before and never thought about doing it before and these very smart people in Philadelphia thought that maybe it'd be a good idea for her to give it a go on very specific ConnectAndSell test drive. And she approached us at the therapist. She listened like a therapist. She intervened like a therapist. And she set meetings at a pace that generated more than $120,000 an hour for their business of [inaudible 00:22:11]. so I got a glimpse into that and I thought, are we missing? We should... I mean, the psychology departments are full of these people who get trained in this stuff, but mainly they were attracted to it. They were attracted to it and therefore, maybe it's a magnet for a certain type of person that we could go and say, "Hey, you've got a couple of hours a day?"
Valerie Schlitt (22:36):
Fascinating. In the beginning, we somehow got through this network of people who worked in a preschool and a lot of the teachers came and worked with us. And very quickly I realized that if you are a preschool teacher, you have a way of talking that gets people to listen to you right away and do what you want them to do and you can talk to a lot of people, a lot of different temperaments. I forget what all the commonalities were, but there was a lot of commonality between being a preschool teacher and being someone who can talk on the phone and capture attention and secure appointments. And that was really an eye-opener.
Chris Beall (23:22):
Do you still do that? Do you recruit... I mean, there must be preschool teachers that are like Venture Capital in Silicon Valley, the streets must be a wash in preschool teachers, right.
Valerie Schlitt (23:33):
Probably are. We don't do it purposefully anymore. We kind of happened into this little network, but I'm sure that the same qualities of some of the people that we bring on are similar to that.
Chris Beall (23:43):
Who was the common nectar that you... [crosstalk 00:23:47].
Valerie Schlitt (23:46):
There was one person that came to the organization. She wanted to, and not everyone works part-time, she wanted to work full-time. So she worked full-time but she had these buddies that she said, "Come on, this is a great place to work. You got to come." You have to convince someone though who's talking to kids that this is really very similar and it's a nice place to work because it seems kind of scary. You have to make all these telephone calls and talk to strangers. But then little by little they came over. And I think we have had probably about five.
Chris Beall (24:16):
Now how about the flip on the other stuff. So I have an example, last year where a friend who is running a company doing some sort of a... It wasn't outsourced cold calling but it was for himself. And I looked at his business and I said, I think that you ought to give my first wife a try with regard to calling. And it just seemed to me, I mean, I knew her well, we were married for quite a while and I have a huge amount of respect for her capabilities. And it was just the most horrible experience in the world for her. It created this anxiety. And here, I'm saying, ConnectAndSell, lots of fun. You push the button and you talk to somebody.
And she said it was something really horrible like anticipating putting your finger in an electrical socket kind of horrible, not when she pushed the button but waiting for the conversation. And so here's a case of somebody who seems like a good match, smart, articulate, hardworking, courageous, used to run around business at a bookstore and built it from nothing, and it's the worst job in the world for her. And do you find that sometimes you think you're increasing the operational excellence with a particular hire and their eyes are bigger than their stomach when it comes to stomach and cold calls.
Valerie Schlitt (25:36):
I can't think of anyone in particular but I do want to translate to, as we've migrated over to ConnectAndSell and putting people on ConnectAndSell, people were really afraid at first that these calls were going to come, they weren't going to be able to study all the notes. I mean, you can see the notes of course, but you don't get to see, I don't know, six months worth of notes. And they were going to come shooting at them, how are they going to address it? Everyone loves it but change is hard. And that part of our journey towards operational excellence, it really didn't take that much adjustment, but it did take people being convinced that they would be fine if they get put on ConnectAndSell and now everyone loves it.
Chris Beall (26:19):
It's the scariest product in the world. It still scares me. It does because what you're doing is you're putting yourself in a known vulnerable situation without the precise control over timing. You don't know if the beeps going to be one second from now or 10 minutes from now. It has a little bit of a horror movie quality to it of being in a dark room with something bad in there and you don't know if that bad thing's going to get you or not. And then when the lights turn on, it's a surprise party and they're [inaudible 00:26:54].
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