How To Stop Worrying About Sales Growth with Rick Janezic
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Episode Summary
Rick Janezic is the founder of Ascenceo, which helps entrepreneurs who are waking up in the middle of the night worrying about how they’re going to make payroll and how they’re going to grow the company, not have to do that anymore. He said, “When emotions are high, that is when facts are few.” He gives people the right information on what the problem is whether it’s in sales, marketing, onboarding new clients, or keeping new clients, so that the entrepreneurs can have some peace of mind. He also helps investors figure out what they can do to help the founders that they’ve invested in who are struggling with their sales. He has some really great insights on how to do it and make it easy so that you are taking guessing out of the picture. He said, “When you’re guessing, you start doubting your judgment.” Listen in to Rick’s secrets on how to make your sales soar and how to stop worrying about sales growth.
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How To Stop Worrying About Sales Growth with Rick Janezic
Today’s guest is Rick Janezic, who is the founder and CEO of Ascenceo Revenue Sciences, which is the secret to keeping your sales growing and booming. Rick went to Wharton. He’s been an investor with Golden Angels. He has the secret and the science behind the ways to keep sales growing and growing and growing. Rick, welcome to the show.
John, it’s a pleasure to be with you.
I always like to ask my guest to take us on a little bit of a story of origin, if you will. Obviously, you’ve had some great education, going to Wharton, etc. but you’ve been doing this for a long time. We’re going to do a lot of car analogies on this episode because of your website and video. Looking under the hood of what does it take to get a company’s sales growing, if the leads start to die down, the revenue goes down, the expenses go up, things that are a big problem. You’re solving a big problem, aren’t you?
We’re trying to work with company owners, company leaders, and investors in those companies to really take a more thoughtful, deep, and scientific look of process that a lot of people think of begins and ends with sales, but it’s really broader than that. We talk about customer development. Rather than just a customer development process, the series of steps or the recipe, if you will, we take a look at how that recipe gets put into action by people, the decisions that they make, and the actions that they take. We try to use a combination of probability sciences, process engineering, as well as optimization to help customers and everybody throughout that process run as fast and as confidently as they can. That process of creating a client, keeping the client, and keeping those clients incredibly happy and pleased.
The sticky factor that everyone’s always looking for. How did you get this experience, Rick? What did you do before you launched your company?
I’ve been a very curious person my entire life back to the point that I was a young child. I’m sure that everybody goes through that process of why, that questioning and wondering about why things are. Why things work? Is that really true? How would we understand that? How could we prove that? That’s been with me for a long period of time. That helped me get through my studies in engineering, through business, through marketing, and through helping run companies, help turn companies around, and helping improve those companies. I’ve been doing these for several decades, unfortunately. It doesn’t feel like it’s been that long but time flies when you’re having fun.
As any good entrepreneur, you saw a problem and you’ve decided you have a unique solution with your experience and intellectual property using the science to solve it. Let’s take a deep dive. One of the things that really stood out to me when I was on your website is, there’s a hundred steps sometimes to get a new customer. Is that the norm? Is that low? Is that high? What have you found?
Sales Growth: All too often, folks think that selling is a one-to-one. It’s gotten much more complex.
It depends on the type of company, the type of process, the type of product, the type of service, the richness of that, the number of people that are involved on the market or the sales side, as well as people on the buy side. All too often, folks think that selling is a one-to-one. It’s gotten much more complex. There are many more people that are involved both on the seller side as well as on the buyer side. Often, I found that folks haven’t really thought through that entire process. How do you prepare for a meeting where it may be you and a colleague meeting with five to ten people on the buy side, and really understanding what’s the decision process that they’re going to go through? What’s really the problem that they’re trying to solve? What’s the evidence that you bring as well as the enthusiasm that you bring that helps them understand you’re the right company, you’re the right solution to a problem that they have?
I’m going to ask you to put your investor hat on for a minute. When you hear a pitch, what are you looking for as it relates specifically, since this is your area of expertise, to how they’re going to monetize and get revenue in the company? What are some of the things that you think make a good pitch?
One of the key things that I’ve seen, and I’d love to get your perspective since you and I have some similar interests, I don’t want to hear about the product. I want to hear about the problem, because people don’t buy products. They buy solutions to problems. How clear, how deep, how thorough is your understanding about the problems that your clients have? How compelling the interest is on their part to solve those? I try to really understand, what’s the problem? How do you know that somebody has a problem? How do they know they have that problem?
I couldn’t agree more. The more empathy you show for the potential customers that you’re targeting, the better the investors feel that you really understand that problem. You’ve said something that’s really interesting to me. I think most people when they’re pitching an investor like you, forget that the whole premise is based on the people that we are targeting have a problem so big that they’re willing to change their behavior to solve it. That’s the big a-ha, that people underestimate how big the problem has to be in order to get someone to change their behavior. What are your thoughts on that?
There’s a gentleman whose book I read recently who is out of New York, I believe. It’s Charles Duhigg and it’s called The Power of Habit. All too often, folks don’t really understand. They think, “I’ve got a product and this product fits the problem.” What’s the probability? What’s the likelihood? What’s the difficulty socially, culturally, practically from a process perspective of an organization changing their habit? When they look at doing something, what they were doing with somebody else’s product, now they’re going to do it with you. That means they have to change their habits. They have to learn new things, do new things to really be able to get that value. Not just have it be a technical fit but have it be a business fit. Thinking through the realities and some of the challenges of getting folks to recognize those habits, understand those habits, and then having a successful process to carry them through into that new habit is critical.
Sometimes an investor will say, “This looks like the right team. They’re solving a problem. They got some unique ability to solve it. There are some barriers to entry with the competition. I think I’m going to invest.” They invest and the leads aren’t converting. The sales cost go up and the revenues are down. They have a big problem. They start doubting if they made the right choice. They start putting pressure on the founder. That’s really where an investor would reach out to you and say, “Rick, help me out here. You’re an investor too. Did I make a mistake? How can we fix this sales problem?”
I’ve heard that term, “We have a sales problem,” many, many times. The challenge is you may have something that’s manifesting itself and making it look like it’s a sales problem but isn’t a sales problem. If it is a sales problem, where is that problem? How deep is that problem? Is that pervasive across everyone, which tells me either you’re remarkably bad at selection or it’s really not a sales problem? Maybe it’s a marketing problem, maybe it’s a product problem, maybe it’s a segmentation problem. Really doing that diagnosis. As they do in healthcare, you want to diagnose before you prescribe. How do we know what the true source of that problem is and the cause of that problem? What’s the biggest risk? What’s going to have the greatest amount of leverage to be able to improve, ameliorate, or address that problem? If we’ve got fifteen problems that we need to solve, which one do we do first? Which one do we do second? Can we do some of this in collaboration with one another or some of them so big and so challenging that we can only tackle one at a time?
Like cars, running a business, you need a great engine to have great performance. What you’re really offering people is the ability to retune, repair, and rebuild the engine of sales in a very step by step methodical scientific way, it sounds like.
It is. It’s to the point where you can either guess at doing things, you can only guess so many times before investors lose their patience, before clients lose their patience, before high-quality talent says, “I don’t want to be a part of this. We don’t have professional leadership in place or a professional plan in place to really address some of the challenges that exist.” Guessing is no fun because you can only do that so many times where you start to really doubt your own judgment.
[Tweet “Guessing is no fun as it causes you to doubt your judgement”]
One of the mistakes that I see lot is the wrong message to the right market or the right message to the wrong market. Do you have a story around that that you can give us an example?
I try to keep the client’s dirty laundry in the laundry room so others don’t see it. With that said, I’d give you an example of a company that we had done some work with a while ago that were starting off with something in the healthcare space. It was really a challenge to understand, who within the organization has this problem, recognizes this problem, and is willing to engage in understanding, “How do we make that problem go away?” One of the challenges that we found, because this was so new and so different, that when we’d start to try to engage with who we thought the appropriate people would be, they didn’t really know how to think about that. They didn’t know how to respond to that. They didn’t understand, “Do I have this problem. Do I own this problem?”
One of the key challenges was to really stop, step back and ask much easier questions. When you call into a very large organization, there’s a common theme or a common belief that a brand new product, that somebody’s going to magically see it and recognize it. That’s not always the case. You may be calling on the right person but until you really understand, “How do I ask a question they can confidently answer?” because you don’t want to make somebody look foolish. They’re probably not going to help you in that case. That ability to ask easy questions and sometimes simple questions. I’m a fan of Peter Drucker. Peter Drucker had his Drucker’s five questions: What’s your mission? Who’s your customer? What do they value? What are your results? What’s your plan? Easy to ask, tough to answer.
What is your mission? What do you exist for? What’s the purpose of your organization? Why was it created? What are you really trying to accomplish? Second, who’s your customer? Who is it that has this need for what it is that you do? Product, service, combination of the two. The third piece, I think is one of the critical pieces, what do they value? The way that you present and you think about your product or service may not be the same way that they value that. It’s the dialogue and that deep level of understanding about who your clients are, how they think, how they behave, what their habits are, what the challenge is, how they’d recognize whether or not they have this potential problem that you think that they might have. Then what’s the process that you use collaboratively with them to really validate, test, and confirm for you and for them they have it, it’s a big problem, and they’re ready, willing, and able to solve it.
That really is the empathy we were talking about earlier and that’s the sweet spot that you’re solving. If that isn’t done, then everything doesn’t work.
It becomes a challenge. The fourth question is, what are your results? What have you been able to accomplish to date? Number of customers, number of products, whatever the series of metrics that exist are. Now that you have those four answered, the final question is, “Now, what’s your plan?” Given everything that you now know, what are you going to do?”
That’s everything because if you don’t have a plan to fix the problem or hit certain milestones, investors get really nervous. Let’s just take, “The leads aren’t converting.” We’re running ads on Facebook or whatever it is. We have a sales force that’s going out and trying to get new clients. There’s such a long lead time or they’re just thinking about it, they don’t want to make a change. The reasons are varied, I’m sure. Is it, A) the sales force isn’t good, or B) the price is too high, or C) the competition is beating them?
Sales Growth: Do you have competitors? Who are those competitors?
Part of it is to take a look at the market. Is there really truly a market there? Do you have competitors? Who are those competitors? Michael Porter did work a number of years ago that he talked about Porter’s Five Forces. That takes a look and says, what really determines the size, shape, health and trajectory of a market? There were five factors that he looked at. One of them is called rivalry. How many other people are you competing with? Either internal to the organization or traditional suppliers, if you will, folks who build products and services to try and address that market. If other folks are doing something successful, they’re growing rapidly, they’re picking up customers, and then it’s time to look inside and say, “Either we don’t have the right product, we don’t have the right team. We don’t have the right message. There’s a credibility issue.” It’s really going back and diagnosing what is that gap. Sometimes it is on, “We didn’t build the right product for the right market because we didn’t really understand our customers.” Sometimes, it is the sales team. One of the toughest challenges that every organization has is selection. Not hiring, selection. If the ideal candidate showed up on your doorstep, would your selection team recognize that?
That goes back to really not only having an ideal avatar for your client, but an ideal avatar for your sales force so you’re not just hiring the best of whoever just happened to show up but, “None of this people fit because we have these criteria.” Is that what you’re saying?
It is. Even to the point where one of the questions that we ask as investors if someone says or asks us for a $1 million, we ask, “What is that going to go for?” They’ll say, “We need to hire a couple of key people.” We’ll ask, “Who?” Not what role, who.
That’s so key. “Who are you going to go after?” Not just the job description, but you’ve already thought it through that far. That’s great. I’ve never heard anybody say that. I love it.
Who specifically? How is that person number one? If that person says no, who’s number two? Why is number two number two and why is number one number one?
That’s good stuff. That’s really great. I hope everyone is really hearing that. I always tell people, when you pitch to an investor, you need to be prepared for questions. You need to have answers that show you’ve thought things through. If you get asked this question by a smart investor like Rick, you better have the answers. If you don’t, you better hire Rick to help you get the answers. Not only have you helped investors who’ve gotten some frustration because the sales are stalling, but you also help founders make sure that they have a really strong sales strategy in place and that after they’ve gotten the funding, they continued to use you to keep the sales growing. Is that accurate?
It is. It’s one thing to have the capital. It’s another thing to know what to do with it.
What’s the biggest mistake you’ve seen a founder making besides let’s just say, not thinking out who they’re going to hire? Let’s say, they hire their number one or number two choice and they’re still having trouble hitting their sales goals. Is it because they’re not training them? Is it because the sales force is not understanding how to be compelling? What’s the biggest bump that you see in the road?
If it were so easy that we could say that it was just one thing, that would make life a whole lot easier. One of the reasons we always talk about revenue sciences, the science piece of that, and the customer development engine, it’s really taking a look from product development and innovation to marketing, to sales, to customer onboarding, to customer success, to loyalty and expansion. If you take a look at that entire waterfront, that entire process and understand where the problems are, where the gaps are. Is it a team gap? Is it a process gap? Is it a fit gap? What’s really not working well and how do we know? How do we test that? Is that an assumption or is that a fact? How would we prove that that’s indeed the case?
Until you can really get to that point, it’s a guess. Guessing can be very, very expensive and very, very frustrating. One of the things that we take a look at from an investor perspective is, do they have a board? Do they have some advisors? What’s the quality of the advisors? It’s easy when you’re in the battle to think that you’re doing the right thing. Without some oversight, without some guidance and another set of eyes to help take a look at blind spots that you may have about the market, about the product, about competitors or about yourself, it’s tough to recognize that.
I think some of the problem, especially for first time founders seeking money, is they don’t even have the big picture that you just described. How marketing and sales relate to each other? How is the customer on-boarded? What are we doing to keep them loyal? How do we get referrals? None of that’s thought through or they haven’t thought through each one of those areas in great enough detail that they’ll just start to guess and say, “We’ll wing it when we get there.” That never really works.
It’s an option. It’s generally not a good one though.
It’s like not practicing your pitch. I can’t stand it when someone says, “I’m just going to wing it.” I’m like, “Oh my god.”
That’s disrespectful to the audience.
This premise here I think is really interesting because having worked at Condé Nast, there’s always some rivalry between marketing and sales. I’m sure you see that. I worked at big control data and all big computer companies. There’s always a rivalry between engineering and sales. Speak to that problem, because it happens, I would assume, in small companies. The sales person is like, “I did my job. You guys are on-boarding these people in such a clunky way that they’re frustrated and leaving. There’s a problem, there’s no customer service. That’s not my job.” It just goes on and on, doesn’t it?
[Tweet “Emotions are high when facts are few”]
It really does. We were interviewing a CEO not too long ago who just had a remarkable background, engineering and theology, which is a rare combination to include in one individual. He studied Greek philosophy. One of the philosophers, I apologize that I can’t recall who the name was, had an expression, “Emotions are high when the facts are few.” It’s easy to do finger pointing when you really don’t know what the answer is. What we try to do is to really shine a light on the facts that we know and go through a rigorous process to get through the facts that we don’t know, because many of things these days can be discovered internally or externally. Sometimes, it’s writing a check. Sometimes, it’s just spending the time to really dig down and get to the point of knowing that you know that you know. That helps to reduce that finger pointing, improve that collaboration, and help to take out some of the arguments or the differences of opinion because it gets from a point of being who’s right to what’s right.
It takes away all the emotion. You’re no longer pointing fingers, “You’re wrong. I’m wrong,” taking blame but going through the facts so it can remove some of the emotions. That’s what I took away from what you said.
My mom and dad used to say, “Don’t point the finger at somebody else because you’ve always got four pointing back at you.”
Of course that creates morale problems and all kinds of things. We talked about getting people to change their behavior. My favorite example is, if the economy hadn’t been bad in 2008 or so, people wouldn’t have been open to Airbnb. They’re changing their behavior, “I’m letting a stranger rent my room or rent my place.” There is some catalyst to make people change their behavior. If we all didn’t have smartphones or the majority of us anyway, Uber wouldn’t work. The problem that you’re solving right now has been going on for a long time. That’s why so many businesses are going out of business or not getting funded, because they haven’t thought through all these things. You’re really not asking people to change their behavior so much as just instead of trying to wing it and guess it, “Hire us so we can give you some science to have a strategic plan in place with the money you get and what to do if there are some other problems that your plan hasn’t worked, that you can figure out what to fix first,” is really what I’m hearing is the big value you bring.
I’m going to say it’s unnecessary to try and fall asleep at night and to be worried about the things that you worry about, because that says that you don’t really have good strong answers. When we know what to do, generally speaking, people will run toward that. If I know what to do, I know how to do it, I know what great performance looks like, I know what success looks like, generally speaking, I’m going to have a beeline to that. When I don’t have that, that causes threat, it causes indecision. The common term is analysis paralysis. That’s because there’s a level of uncertainty that folks haven’t had a process that they can think through, analyze, and get to the point of knowing that they know so they can move forward with confidence. That cascades all the way throughout the organization. Not just at the executive level but from the bird’s-eye view to the worm’s-eye view and everywhere in between.
One of my favorite things to do is to try and come up with a quick pitch for people in any area to get new clients, to get new customers, to get funded, whatever your elevator pitch is. To me, if I was saying, “What would be the elevator pitch for Ascenceo?” It would be, “Want to stop having sleepless nights as an entrepreneur?”
That’s a good one. I do like that. John, I may have to borrow that or buy the trademark from you there.
“Having trouble sleeping as an entrepreneur? We help you figure out what those things are that keep you up at night and fix them.” If you just said it that way, everybody will be going, “Oh my god, tell me more. How do you that?” That’s the whole thing of a good pitch. Just to intrigue people enough to want to get them to know more. They’re like, “I’ll help you with your sales. I’ll help you grow your sales.” Okay, but you go, “Let’s help you get rid of those sleepless nights as an entrepreneur. Are you worried about your sales? Are you worried about making payroll? Are you worried about marketing? Are you worried about getting funded? I can help you with all those things that keep most entrepreneurs up at night.” Then we’ve got people going, “That’s what I need.”
John, I appreciate that moment of clarity for you and for me. Thank you.
My pleasure. Is there any last thought you want to leave us with? I think that one is a great one but I’m going to give you the opportunity to give us one last thought that you want to give us, Rick.
Sales Growth: Most things that you need to know, that you’re not sure about, are knowable.
I think the big thing is most things that you need to know, that you’re not sure about, are knowable. We try to use the process of helping you get to the point of knowing that you know so you can move forward with confidence, with certainty. That creates energy and vitality both internally with the organization and then when someone shows up from the sales perspective or from a service perspective, they’ve got that confidence. They’ve got that swagger to know, “I know how to help you when.”
It’s like a doctor going, “Don’t worry. I’ve figured out what your problem is. We just need to take your tonsils out. I’ve done a thousand of these operations. You’re going to be just fine.” They’re like, “Fantastic. You’ve figured out my problem. You have the solution.” That’s it. You’re really the doctor of sales in my opinion.
Rick, I can’t thank you enough for being here. Tell us what your Twitter handle is, the best way for people to engage to your company.
The best way is to go to Ascenceo.com.
What’s your Twitter handle?
I have two, one is @rjanezic and @ascenceorevsci.
Rick, thanks again. I think everybody has really learned something. Emotions are high when facts are few, so let’s get those emotions down and those facts up and go to Rick. He’ll get rid of your sleepless nights as an entrepreneur and as an investor. Thanks, Rick.
John, thank you. I really appreciate the time.
Links Mentioned
- Ascenceo Revenue Sciences
- Golden Angels
- The Power of Habit
- Porter’s Five Forces
- @rjanezic
- @ascenceorevsci
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