David Stillman on the Lou Hutt Show |  |
The Lou Hutt show continues with CPA, lawyer and entrepreneur, Lou Hutt.
Lou: David I have a book that written, A Road to Mega Success, simple strategies for enriching the bottom line. One of the key things that I chat about is that entrepreneurs have to bring a strong value proposition particularly in economic market we are in today. And what you brought to the table was a bottom line solution. And so when you pitched your first customer, I am sure you were pitching that customer in a way that they said this translates into real dollars in my bottom line.
David (0:55): That’s it, I have to actually ask a really stupid question in every sales cycle when we are selling new clients. I say, “Do you want to increase your revenues? Do you want to get in front of new buyers?” And I feel silly asking that question because frankly if you are a business owner or head of sales and don’t answer yes to that you shouldn’t be in the job that you are in. It’s a silly question but people say how has the economy effected you in the past 2 ½ years and we can sympathize; we really know what’s going on out there because our clients are facing it. In this down time it is harder to get in front of the decision makers, because they aren’t spending money. They care about their staff and their job and increasing what they’re doing and they aren’t out looking for vendors. Our business is has actually expanding in the last 2 years greatly, because all of these companies that need to be reaching out to sell more are having a harder time because it is harder to get in front of the right people right now. They have their guards up and a wall really not taking meetings with vendors at this point.
Lou (1:58): Wow, now in the type of assistance you are providing to these companies, are you helping them to stream line their message? Have you trained them to be prepared so once they get this opportunity and coach them? How does that all play out?
David (2:23): We really stop at the meeting, but what we do in the process of working with clients is the value proposition. What most clients give us when we are working with them, we spend an hour to two hours learning their story, why they are in business, there perception of their unique value proposition, who their competitors are, how they are different, and really anything that we can use to really help them get in the door. In that process of reviewing their information, collateral and doing kick off calls, we are trying to tweak and twist their own messaging, and it’s funny because I have had a couple clients say to me I knew everything in that but I would have never framed it that way.
Lou (3:16): Interesting, as an entrepreneur we are so close to it sometimes that our perception is not necessarily lined up with reality. The customer may still see the value proposition as something slightly different.
David (3:30): You couldn’t have said it better, and it’s more than that too. We have worked with 60-80 clients over the past years doing this for them and we’ve set up around 6 or 7 thousand meetings with directors, VPs, and C level Executives from small to mid-sized businesses up to your fortune 50. So what we’re hearing in the marketplace it’s almost like we are doing free market research for people because we can look across the years and say this isn’t going to work, you want to meet with the CFO and you’re talking about cost cutting, Everyone is talking about cost cutting to the CFO. There needs to be a specific message about why he or she should care.
Lou (4:10): You know it is also interesting when we are talking entrepreneurs; also again this is the Lou Hutt Show. We are talking to David Stillman, David founded a company with his partner, Vorsight. The focus is Sales Solutions, I would have to say David. Going back to the value proposition, Entrepreneurs are more inclined particular in smaller companies to invest into hard assets, when it comes to soft costs sales and marketing development there is resistance of reluctance or a hesitation. What are you finding today?
David (4:56): Couldn’t agree with you more, what we are trying to do is turn it from a cost based solution to a value based solution because if you look at some of our clients they are spending 20 thousand dollars a month, that’s a big expense until they start to close business. So what we try to get them to think about is, if you are doing 10 meetings a month now if you went to 20 and kept your close rates the same, kept average deal size the same and kept your sales cycle the same. What would that do to you in terms of actual hard revenue numbers? And what ends up happening is a lot of these companies 3,6,9, 12 sale cycles, so by the time they start closing stuff they have already spent 50 to 60 thousand dollars.
Lou (5:42): And what do you mean by sale cycle, in case someone is listening that isn’t sure or doesn’t understand.
David (5:46): By sales cycle I mean, the day you do the introductory meeting how long it actually takes to close that business. So you meet that person on January 1st and your deal closes in July, how long did that take and a lot of companies these days aren’t closing business in 30 days, it takes 6,9,12 months of relationship building.
Lou (6:05): So these are resources that I am expending and I am applying time, out of pocket expense, travel, communications, all of these things. The quicker that I can close and the higher rate of closing, usually means I am going to be a more profitable company.
David (6:25): Sure, absolutely and here is the interesting part of it is, some of our clients seen a 100 time ROI, and is as little as a couple of months. That springs from closing a big deal, we set up a meeting for you, charge per meeting, you close a 100 thousand dollar deal we aren’t taking a percentage of revenue, you are only paying that upfront cost of us actually getting you in front of the right person. So if all of those deals close and you spend 50 thousand dollars with us in a year, and the company closes a million dollars in revenue because of it, it becomes a no brainer to work with a company like us. Again, entrepreneurs have seen that.
Lou (7:04): What do you think is and there are those that are listening thinking what scale, what size does it become cost effective for my company regardless to what I do to even consider that sort of relationship?
David (7:19) That’s a great question, on the two sides of the coin you have one outsource meeting scheduling which most of our clients have a yearly revenue from the client in excess of about 15 to 20 thousand dollars. Anything more transactional are prices and rates structure doesn’t necessarily make sense. On the training side, a lot of clients have come to us said, “We got a team of sales people, we think they are the right people, and doing a good job. We want to see if they can do better, we want you to come in and teach them the tactics you use successfully to increase the effectiveness of our sales team” And so we have worked with one of the largest wireless companies in the country, and they are selling phones, so we are talking 50 to 100 dollars and the justification was that if we can increase the percentage of new lines added every month. So if our sales people are selling 50 phones a month and now they are selling 55 or 60, it still pays for itself because it is a training that is spread over the whole team. So from the training side of the business we are doing a lot of work with the transactional sales organizations.
Lou (8:28) Ok, so its training and getting before the actual business makers. I have to ask you this question in the minutes that remain. Who would you point to who is perhaps one the more well known or significant individuals that you have gotten your clients before? I am thinking fortune 1000, fortune 500 and you have broken through the red tape, cut through the gatekeeper, and have gotten your client before this person and they just said, “Wow.”
David (9:03): I can give you personal experience back when I did the job, it’s funny none of my employees have ever seen me do the job so no one actually believes I ever got on the phone and made cold calls but I actually did at one point for 5 years. I set up a meeting with the head of procurement of Daimler Chrysler, I set up with Citi Group. Our people everyday are setting up meetings with the CFOs with small to mid-size businesses.
Lou(9:29): And you have all sorts of tactics and strategies you use to get through because I can imagine these people have literally dozens of gatekeepers.
David (9:40): They do, and what’s amazing about that is people assume that we bringing in people with tons and tons of sales experience and we’re not. We are hiring recent college graduates with limited to no sales and business experience and giving them the fundamentals to do the job the right way, most people do it the wrong way.
Lou (10:01): So now in your capacity as CEO you not only assist and in some cases directly with your customers but you have a team trained and cultivated essentially to be your surrogate.
David (10:16): Yeah, what we have learned as business owners if you can’t find people that are better than yourselves, at the job and all facets of what you are doing the company isn’t going to go anywhere because day to day I help with operations, I help with sales, and I am an integral part with strategy. The day to day operations of the company are being done by our employees and the trust and the faith of them is what has allowed us to expand over the last 5 years.
Lou (10:43): So it is interesting you’re in the business of helping other companies grow but you yourself have to monitor your own growth and invest in developing a team that in essence duplicate what it is you do. My Guest has been Mr. David Stillman, Co-founder and CEO of Vorsight and Thank you again for listening to another addition of the Lou Hutt show. For show replays, guest contact information, or to submit your questions or comments and get a copy of my book Road to Mega Success, simple strategies for enriching the bottom line please visit Louhutt.com or simply call me toll free at 1-877-640-6342. Until we chat again next week here on the power. 5PM on Saturdays and 10AM on Sundays EST. This is Lou Hutt reminding you to keep your eye on the prize.
