10x Revenue with 1 New Sales Process (You Can Steal It)

I crossed $100 million in net worth by age 32 I sold my first big company for 46.2 million and the reason we're able to do that is because we know how to grow companies and so now I buy companies at a lower price I grow them and then we sell them and so I want to talk to you about one of the companies we just bought uh we bought them a year and a half ago I think or a year ago uh they had 14 locations so it was a chain of brick and mortar and

since then we've gone from 14 to 32 locations and the reason we're able to do that is because we focused on the sales process and through a process that I want to walk you through something that I call the diagnostic sale we're able to 10x the recurring revenue of the business across all the locations so before we get into the nitty-gritty of the story let me just walk you through the steps in the diagnostic process first is we like to have some sort of pre-sale questionnaire which the purpose of that is to get more information

that arms the salesperson so they know who they're talking to what their pains are but from the sales perspective for them they also increase their awareness of the problem second is we get their information in their credit card which is key and I'll explain why it lat uh third is we want to understand what the current situation is where are you at today then we have your desired state so where would you like to be at and then what's the obstacle why aren't you there and then finally once we have these big three we present

the desired State and our vehicle to overcome the obstacle and we tie our price to the way that we're going to get them there and then finally we give them an incentive to prepay so here's the five steps that we follow to actually get this done so number one is that we secret shopped the business so we actually looked into it we went there by the the way you should secret shop your own business highly recommend doing it you'll be horrified by what you hear your sales guys say you're like I thought we had a

script what are you even doing number two is from there this is basically information gathering we figure out what the constraint is okay where do we think there's big opportunities in the business now you should think about yourself as your own business consultant if you could buy your business today and look at your business what would be the no duh thing that you would do now for this particular business we thought that they had an offer constraint which really came down to packaging we had offer SL packaging because fundamentally we're not going to change the

core of the business we're not going to all of a sudden start selling soap when you sell HVAC like that's not going to happen right so the core of the business can remain unchanged it's how we're going to package the services we deliver or that the services we sell to a customer how are we going to get them to perceive what we're selling we gathered the data we figured out the constraint was that they should get way more re bookings which I thought was an offer and packaging issue which is we need to sell the

solution sell the goal and so number four is okay if we assume that we're going to make this new transition into this new new offer new packaging we have to anticipate so you we call it killing zombies uh which is one way of putting it you anticipate the obstacles or objections that people are going to throw at you ahead of time write this in neon marker above your sales team which is it's way harder to get someone to buy after you presented the price because now they're like he's trying to sell me so we have

to counter that before we become salesp people in their mind we are a trusted expert ideally if we're positioned well and you should be that way if you know what you're talking about and I like to use the frame of childlike curiosity I always tilt my head I probably even did it subconsciously just now you tilt your head when you ask the question because it's non-threatening you're like huh that's weird what changed between then and now just so I understand then they can tell you rather than be like you said that your husband says he

supports you you can't say that now you have to buy doesn't work that way if you win the argument in a sale you lose the sale the only way that you win the sale is being willing to lose being right and so the fifth step and this is the ongoing step is that you implement the diagnostic sales process so it's implementation so now that I just outlined the five steps let me deep dive into the implementation into the actual business and how we did this with this particular business when we bought them I spent four

hours with our director of sales and we outlined the new sales process we wanted to implement and as soon as we implemented that sales process we 4X LTV progresser meaning how much people paid us it went from 200 to 800 so really big jump and we the crazy thing about this is that we didn't change what we delivered we only changed how we presented it and so this is the key of how we create value how we scale companies how we grow companies and many companies keep these things as Secrets uh as their special sauce

and I just fundamentally believe that the more we put out the more we get back and say that's why I operate this way all right so I will hold nothing back and this is something I call the diagnostic sales process now to be very clear the diagnostic sales process is one of two two different sales or maybe three different sales processes big picture that you can have in a business one is a transactional sale all the way on this extreme so on one side you've got transactional sales and on this side you've got Enterprise sales

which is like uh relational sales like if you think about like you're selling some big Fortune 500 company you have to get stakeholders involved get budget approval there's all that stuff and on transactional side you've got like High Velocity sales we're talking 20 30 minute sales a guy who stands in of the car wash sells Car Wash somebody sells gym memberships transactional and then you've kind of got like this Middle where you might sell something that's a little bit higher ticket but it's a little bit more custom all right now what we did was I

took their sale from here a purely transactional sale and moved it towards custom all right now in a transactional sale you typically fit the customer to the product and so let's say that I sell Pence all right so I sell Pence if somebody comes in I'm going to basically spend all my effort listening to what they say they want and then telling them how this pen fits their needs or I have to basically say your needs are wrong let me educate you more and this actually solves all your problems right and so those are pretty

much the only two approaches you can take in a transactional sale now the advantages of having this type of sale is that it's really fast uh they tend to be lower ticket in general uh and from an operational perspective in the business you don't need to personalize anything and so you get the sales team and the Sal sales process to basically Orient everyone like a funnel down to one solution and then you just make a ton of these Solutions and you get lots of efficiencies because you only have to produce one thing this the custom

sale is a harder sale sorry easier sale to do but harder on the operational side and so the magic happens when you can actually Bridge the product component of transactional which you say okay we only sell these types of widgets this is the only thing we deliver but I can do it in a way that feels custom feels personalized all right so I'm going to give you two examples and I'll explain this one in a second this chart that I have here which if you could take your recurring revenue from that to that just by

changing how you sell if you'd want to do that hang tight we're going to break that in the process so if I had because I did this in the gym in the gym world too which is part of why our gyms make more money so a traditional sale would look something like this someone comes in so this is traditional and you say we have a membership that's you know whatever $99 per month all right that's your membership and you say our membership has this this this and this and you want that right because it's going

to help you accomplish all your dreams okay sometimes you get people sometimes you don't what I do we do something called a diagnostic and so the first thing is that when the person walks in the door we get them to fill out a pre-sale questionnaire and so that's like an application in a digital process but an inperson process it follows the same logic which by the way internet businesses follow local businesses local businesses can also model internet businesses when you find out something works in one place which I think has been one of the big

advantages of I've had in business is I try and put it in a completely different place and it often works too if you understand the concept and so we fill out a pre-sale questionnaire now the pre-sale questionnaire simply walks them through all the reasons they walked in today and it ask them the same question in multiple different ways so it's like hey like what brought you in today what's the current problem you're doing dealing with how long You' been dealing with it if you had to quantify how much this has cost you financially what would

it be uh if it continued for five years how much worse would the situation be and so the whole point is we're trying to agitate tame we're trying to bring attention to this problem and Elevate its importance so that's what the pre-sale questionnaire does now the second thing is we get info and this is very key so when someone comes in after that we say hey I want to I want to set up your account profile and so when you do that you collect their information and this is the key part you get their credit

card now you're like wait a second I'm getting a credit card but I haven't sold anything exactly and you do that so that when you do sell something later you don't have to ask for it now you get the pre-sale they're like wow I really do need this thing you say hey let me complete your customer profile just standard procedure no big deal all right then you get their info now if they're like well I don't want to give you my credit card you're just like it's just how the system works it's how we complete

profiles and then they'll give it to you all right so from there this is the this is where the special the special magic that's unique to each individual business happens so in the weight loss business I want to understand where their goal at so you say what's current and then four what's desired where are you now where would you like to be and then this one you ask them say what's the obstacle what's in between these two things is the obstacle right current I've got an obstacle getting the way of I desired that's all we're

asking in the process now in weight loss and in most businesses the thing the person thinks is in the way is often not the real thing in the way and that's because they've never had this conversation before they clearly haven't solved the solution and that's why they're coming to you and so you want to just get their words more so so that you can explain it back to them using the language they gave you all right and so in the weight loss world for example instead of selling a membership I would say okay well it

sounds like you need these three things Fitness Nutrition accountability Fitness wise you need to work out X days a week nutrition wise you need to eat this food at this time and we can help you meal prep the stuff so you got when you go to restaurants you can still stick on it and you need accountability because if you don't if you do if if I give you the best fitness plan and the best nutrition plan but you don't show up doesn't matter right accountability is what makes the whole thing work great finished nutrition accountability

easy three-step framework fantastic now this is where it becomes diagnostic now most customers and this is why this is where the magic happens is that even if you still deliver the same thing so fundamentally when I switch the sales process the gyms remain the same they still have workouts they still have nutrition help they still have accountability nothing changed but how we present it changes and so rather than saying hey I'm going to sell a four-week thing or a six week thing I say hey you're currently 200 lb Okay now what's your high school weight

she says I want to I want to get to 140 you say okay cool you want to get to 140 this is your desired okay so we have a 60 pound difference now what we found is that we don't want people to lose more than pound and a half to two pounds a week all right so let's just be conservative and call it one and a half so then I take out my calculator and I say what's 1 and a half time 60 which would be other way around it' be 60 divid by one and

a half which is 45 okay so 45 weeks is how long it's going to take us to take you from 200 to 140 so you lose a pound and a half a week it's going to take 4 5 weeks and so six present price in relation to goal so you say awesome so we currently charge 99 bucks a week we can get you there in 45 weeks which means it's $4,500 and that means and for us I added a a guarantee on the back end which which said hey if you show up to the workouts

for next 45 weeks and you log your food and you don't lose the weight I'll keep working with you for free until you do so that means this is the translation this is the key part in the script so that means when you pay this $4,500 it means that you can count that weight for good you can put it out of your mind you pay me this money we're going to get there one way or another As Long as You Follow the steps you're G to follow the steps right great and so here you're trying

to sell 99 bucks a month or or whatever this would be 99 bucks a week if if I was doing equivalent pricing all right so this would be like a semi-private program but by positioning it this way I'm not selling a membership anymore I'm selling exactly what they want and putting a price tag on it and saying you want to get to 140 it's going to take this long and I'll guarantee that you that you'll get there provided you follow these steps and then they say wow that's awesome you say well if you want I

can save you a little bit of money you want to save a little bit of money and they're like yeah I want to save a little bit of money well if you prepay you can save 10% today so I can save you 450 bucks you want to do that that's what most people do great you want to you want to use the card you have in file done so that's that's the process now I took this process and applied it to a completely different service business that we own that's a chain that this is a

little bit more Medical but the concept still applied which is and this is the key part is you have to figure out for whatever it is that you sell what the current is versus what the desired is so if I were uh a painter all right and I was painting houses sounds crazy right say hey so you currently have this thing you want a completely painted house and so the like now for them this is like more us do it for you rather than uh self-service like I'm going to have to like they you're not

painting your house and them helping you so they're actually going to paint the house so then we just try and think how can we how can we how can we sell to goal and break it into a price that we tie to that and so it' be like okay so we're going to need four coats of paint and it's going to take this period of time and then at that point your your whole house is going to be weatherproofed and so that means that when you pay this price that's what you're going to get by

this date and if we don't get it done by that date I'm going to give you this and that way we can relieve their risk that it's not going to happen and we tie the purchase to the outcome so this particular business when I bought it or bought into it um it was a business that they had really good lead gen and they have a good product but they didn't have good packaging and I saw the opportunity because I knew that if I installed my sales process into their business I could make it make a

lot more money and so if you have the opportunity to like Forex a business without opening new locations you do that and so that's more or less what we did so I actually wrote down the new sales process took me four hours so I wrote down the new sales process and then I presented to the management team and they were like wow this is the most valuable thing we've ever had happen to our business and I said great so let me know when you do it across all the locations and let's keep buying and opening

new ones and so 18 months later we have 32 locations and the recurring Revenue in that time period has gone up and the average revenue per customer went from $200 to $800 from this one process and that was because before this they were selling oneoff transactions they were saying hey we'll do this service for you so think of it like botox or we're going to do filler or we're going to do something this one time and so rather than just say sure give us a call when you want it again which is pretty much what

the process was before this I say hey you want to look a certain way you're not here because you want filler you're here because you want to look a certain way so if I show this chart to you of faces and filler densities where where do you see yourself on here currently now you let them self identify you can't be like look Pi you're ugly you can't say that so you got to say where are you on this chart and then they say this now in the weight loss sale I got them to step on

the scale the scale called you fat not me all right so maybe just point to the third party not me so so so you get them to pick how ugly they are all right and then you say how pretty do you want to be now everyone's going to say I want to be super pretty but here's the beautiful thing when they pick how pretty they want to be they're the one who set the goal and that means that the price came from them and you know where I picked this up was yogurt stores so one

of the things I thought was genius about like Yogurt Land and things like that was if if you go to a store and then they fill up your stuff behind the counter and then they say hey it's 8 bucks you're like man what the hell this place is so expensive but if they give you the cup and you fill it up and you put it on the scale you're like man I'm a fat ass same pricing but because I had control over what I picked I'm the one who's responsible for the decision and so by

saying where are you on this chart and again this is where the magic happens I say current desired that's where the thinking behind how I'm going to structure a sale is where like that's where the that's where the experience that's where the expertise that's where it comes in this is the process and hopefully you guys can take this for your business and think like okay what's current what do they really want they're not buying lip filler they're not buying a painted house they're buying an image in their mind of what they want that house to

signify or what it means to them and this lady is not buying filler she's trying to buy a certain look she wants people to think about her a certain way she want when people walk when she walks in the room she wants guys to turn their heads though because she's probably getting a little older they're not turning their heads as much and she still misses that and she' pay anything to get that so say you're ugly now how pretty do you want to be we say cool so for us to get you from here to

here it's going to take us 45 weeks it's going to take us Botox filler and you know plastic surgery whatever we're going have to hit you with a pretty shovel and bring you back to life all right we're going to have to do this and it's going to take this many weeks for us to reverse this level of Aging or at least take these Crow feed out or whatever it is and so we tie where you're at to where you want to go and then our solution is only the vehicle that delivers this outcome and

so that is the moment that you present the price because they picked where they were where they want to go and then you as the expert explain the path to getting there so they picked the before and after and you just use your expertise of this is what we found best to get people to hear Who start where you're at and so we found out that this opportunity existed within this particular business because I had my sales director secret shop them so mind you this is Brick and mor chain we have a lot of locations

so we could sneak our way in it's harder if you have like a you know four sales guys who do all the sales they'll just tell the owner right so we wanted a secret shop before we actually completed the investment and so uh when he went in he was I I asked him so I went through this checklist I was like okay so did they give you some sort of pre-sale question he was like no I was like okay great I like did you did they ask you for your credit card or did they ask

you for your information or anything before you got the service and he was like No And I was like fantastic what else what else did they do it's like did they have you set you know pick uh where you're at and where what your goal is he said yeah they did have me uh pick where I was at but not where I wanted to go so they just had him pick okay how ugly are you and he was like okay now again not completely flawed I want to be really clear here like this is a

at 14 locations they're not they're not idiots they had the pain we agitated the pain they said listen this is how ugly you are on this scale that we invented and you're here you're a seven ugly great so he checked this but he didn't get to say where he wanted to be so then from there he just went right into the service and then when he came out he just gave them the card to pay for the service and that was it and he just walked out the door and I was like wait so they

didn't they didn't actually like ask you to buy a package or get into some membership or anything and he was like well they tried to upsell me this one product at one point but this was the price point and the price point was like 20 bucks or something and I knew what the average customer is worth which was like 200 at the time I was like this like by the way if you're going to do upsells you want the price point to usually be usually be five times more than the current price because if you

get 20% of people so customers are fractal so we're going to go into a little side quest here but it'll be worth it for you since we're talking about sales so you've heard of 8020 right so you've got 100 people right the top 20% you've got the 80 underneath right these are the people 8020 have five times the spending power of these people and so because of that if you get 20% of people to buy something that's five times as expensive so let's say my current thing is $1,000 if I'm going to have an upsell

I want my upsell to be $5,000 because if 20% take it then it's 20% time 5,000 which means I add $11,000 to my average ticket so I go from $2,000 or sorry $1,000 per customer to $2,000 per customer and so when I heard that their upsell was 10% it'd be like having it' be like my upsell is 100 bucks okay fine maybe 20% take that so I I go from a th000 to 1,20 who cares like what's like why bother right and fundamentally again smart business owners and they were upselling product which means there's no

real delivery in a brick and Mort service business so they could just hand the product make the money and I think they were using it more for commissions for their staff to increase the average pay which a different objective entirely and totally fine but I was only looking at this from how do I take customers who are worth $200 and make them my goal is to get them worth a th000 currently it's $800 I'm GNA keep getting there until we get to a th but I think that we can get it to a th and

so we secret shop them number one which by the way if you have a team of people who are currently selling your stuff secret shop them and then be horrified by what you listen to on the phone or what you see in person because you have this beautiful idea of what you think your sales process is and it's a nightmare it's an absolute nightmare if they remember half of it you'll be stoked and so if you run an environment especially in a in a lower wage environment so if you're brick and mortar you have a

chain of of locations and you have to take low skill labor and teach them a sales process you've like the the expertise in sales comes down to how easy and simple you can make the process and so that comes down to like can I automate parts of the p uh the point of sale so that they can't move forward without doing this checkbox right and by doing this chalk boox they have to ask the question so it forces script adherence now training sales not into this video but you want to basically repeat the process over

and over and over again until they're sick of it until they say like yes Mom would you like to have do you have your credit you want to use the credit card on on file like until they're saying it like they can they can breathe it they can think they can say without thinking about it that's when you've maybe just started to have a te a team that's that's well trained now that we finished these seven uh pieces of the diagnostic I want to add one more bonus because you're like wait a second so where's

the where's the recurring Revenue great observation Andrew okay so so number eight is transition to recurring all right I remember this I'll give you two separate stories that'll drive this home so A friend of mine has uh a a recurring membership that he sells and he sells it at uh I think he sell at 300 bucks a month and he couldn't get people stick past three months and so he tried all these different gimmicks and things and he just couldn't crack three months of LTV now that could have been a pricing issue whatever so this

is what he did he stopped selling it at $300 a month month to month and started selling as a $110,000 program with 36 month of Interest refinancing and so when people bought they were buying a $10,000 price point but they got an amazing aming payment plan and so he didn't change anything about what he sold but that took his average customer from 3 months to 8 months so we're talking about a $900 so 3 * 300 to 8 * 300 2400 that kind of change in a business life-changing in terms of how much money you

can make the second one was I had a different friend who had a continuity program uh he was an uh agency and what he did was he realized he had turn in his business and so he said you know people are way less likely to turn out of a payment plan same as is the other one then they are out of a monthly recurring Revenue stream and so what you call it to the customer can affect the likelihood that they pay but as far as the business is concerned you just want payments that are regular

and all you do to take a program and take it from Rec from a payment plan to recurring in terms of how it actually looks and feels is you just put an automatic recurring at the end of the program and so when someone buys this big thing and you make a payment plan and then it recurs into the exact same price as the payment plan you just move the pieces around but the likely they stick is way higher and so that's exactly what we did as the last step in the diagnostic sales process and I

wanted to highlight this point for you because I've done it in every business and so we give someone the option to prepay you can give if you want a little bit more aggressive you get 20% off if they prepaid today if you want to have one step down below that which is what I like to do you give them 10% off if they do half down and they make the rest as payments and if they still can't do that then I take the whole thing and I spread it over let's say 45 weeks and so

I'd say okay it's 99 bucks a week 99 a week and there you go now they go from 99 a week to 80 bucks a week if they prepay the whole thing and they go from 99 bucks a week to 90 a week if they prepay half and here's the key part is that when we present the price you present it at the highest rate so you present it at the payment plan let me walk I'll walk you through this because I think it's important well I'm going to put it here and so I don't

have to flip screens for you all right so you have your full boat I'll say full interest price so for us in our example is 4500 bucks all right 45 weeks times 99 roughly all right so this is our full boat price we have our prepayment discount in full which is minus 20% all right so for us it's going to be minus what is that 900 yeah 900 from there so that's 5600 sorry other way uh 3600 3600 if they do half down you say I I'll let you save uh 450 bucks so 10% so

4050 Z all right so this is 10% minus 10% that's- 20% now the reason this is so important is think about the alternative think about and this is what most people do so listen to me Andrew most people do this they present the price as $3600 and then they say oh well we have payment plans that we have interest on and so we do we do have 10% interest if you can put half down and we have 20% interest if you put uh nothing down and you just go onto a straight payment plan well which

one would you rather buy if on one hand you have a $4,500 price tank which anchors you high and you say or you can get a benefit for prepaying today rather than you think about 3600 you're considering it and then they say oh it's even more even though you're just considering this tag guess what you have to pay way more now be because you can't afford it you have to pay more Banks do it all the time and guess what everyone hates Banks so if banks want to fix their process Mr Bank maybe this will

work who knows anyway point is is that this is how you present the price because you get the benefit of a price anchor and you get to be the good guy for getting them to pay upfront rather than the bad guy for them not being able to so we're going to we're going to go through step eight in uh in the more transition uh process for the sale and so I want to just walk you through step downs and so this is super important to understand from a sales perspective so we'll call this sales step

downs and uh this is by the way a preview for my next book coming out $100 million yeah anyways so so Sal step Downs is one of the things that we have so obviously the first thing we're going to present is a prepayment all right which is pay in full today prepaid y by the way you've probably noticed from any of my content I don't say paidon fools and that's because that's a that's a Salesman term not a customer benefit if you prepay you get a benefit whereas Pon full is like I got all the

cash to front good for me and so I have trained myself because I used to say pton fools piff skis P you know whatevers pifs like all of that stuff I used to do as a sales team sales leader and then I also heard my team saying that to customers be like hey if you want to pay in full today like it's just like kind of gross and so I prefer to say like hey we have a prepayment discount and so training that just little Pro tip for you so number one is prepay number two

is we do discount uh with partial so this is this is the half down oops half down here you can also do in-house well this is whatever sorry this is credit card or third party so if you have like most most businesses that sell legitimate Services have third-party financing solutions that already exist and so I promise you there is a banker somewhere who started a business to service this Emerging Market of whatever it is that you do who says I'll bet you I can help Finance transactions now the prices they charge for that financing will

differ based on how risky your business is and so like there's financing for casinos like if you want to get if you want to get a loan to go gamble more like there's financing for that but they will charge you a lot of money right and so like that being the extreme on the other hand if you want to finance a house there's obviously a huge mortgage industry and so from every step in between there are Partners who will step in as third party and take on that risk for you for a price and so

I prefer can I get the prepayment because it's easiest and fastest if not usually have a third party that I set up so that my customers can get financing if we don't move past either of these two things then I try to go with a partial with some level of discount not as much as here but a little bit and if they still say no then I go for continuity which is why don't we just make a payment plan on the thing and in this particular business because what they were doing before was simply rebooking

people for another session of service we just had this be the automatic like everyone gets rebooked and that would became that became an internal saying like I like having mantras uh within sales teams which is like everyone buys something like everyone buy something there's no reason someone should not buy something and so sure we'll get them a prepay maybe a partial okay fine we'll do a payment plan that's whatever call it you know 250 uh times four great that's our $ th000 that's our th000 plan that we're getting people to buy and you pay 250

today and then three more times and you can do it every other month if it's a more uh intermittent service whatever just match the payments to when they get delivery and then finally if they're like well I can't do any of those things it's like cool let's just let's just book the next time you want to come in that's it and so this is the final of the process in terms of in terms of the step Downs that we might offer someone we just walk through this whole process and you're like wow maybe that's a

lot of work I have to use my brain power but welcome to business but let me tell you why it's worth it so these are the actual stats and I put the numbers without the names to keep it nice open loop for you so number one is that they had 9% of Revenue uh that was recurring within this product line all right so they had 9% that was curring after we implemented this process 60% they took this 9% to 60% of this product line within the company so awesome number two they had basically no membership

at all because they just weren't it wasn't even an option not really and we were to push that to 30 that's a 30 30% into memberships this included payment plans this is just memberships and then we went from getting one additional extra visit on average per person meaning two to getting four to six visits per customer by introducing this sales process and from a money perspective we went from $220,000 when we uh bought the business so mind you this business made a lot more money than this single product line or this service line but this

is where I want wanted to invest my time because I thought there was a huge opportunity here because I saw from the secret shoer from the constraints I thought this was a big area of attack and so they're only 20,000 a month which business the size is not a lot and then however many however we dots this later over 250,000 per month in added and it continues to grow and this compounds and that's the that's the beauty of this type of sales process and repackaging of what someone already sells and so we went from 9

to 60 0 to 30% on memberships from one visit to four to six visits and from 20 to 250,000 so we more than 10x the recurring revenue of this business by following a diagnostic process rather than just selling some traditional one-off thing I have two books on Amazon $100 million offers $100 million leads you can go check them out uh if you have are completely poor uh my podcast has them for free too you can check those out it's all free enjoy