Jeff Standridge (Intro):
Welcome to season five of the Innovation Junkies Podcast. In this season, you’ll learn from successful innovators who have influential stories, practices, and strategies that will have your gears turning. Prepare to be inspired, challenged, and empowered. This is the Innovation Junkies Podcast.
Jeff Standridge:
Hey guys, welcome to another episode of the Innovation Junkies Podcast. I am Jeff Standridge and I am flying solo today. My co-host and business partner, Jeff Amerine, is otherwise detained for legal reasons. He’s, he’s had a very busy week up in northwest Arkansas this week with the Northwest Arkansas Technology Summit, a cohort of Korean business founders that have been in for the last several weeks as well. So we gave him the day to collect his thoughts and I am very happy to be joined today by Marcus Cauchi of the Ally Method. Marcus and I had the opportunity, he comes to us from the UK and we had the opportunity a few months ago for me to visit with him on his podcast. And so Marcus, welcome to the Innovation Junkies Podcast today.
Marcus Cauchi:
Thank you so much for having me.
Jeff Standridge:
Absolutely. It’s a pleasure. So tell our listeners a little bit about you to start with and maybe briefly and how you got to be where you are today and what you’re doing today.
Marcus Cauchi:
So I’ve been in sales 30, 35 years, something like that. And over the years I’ve been a bit slow to learn. So I’ve earned my knowledge through scar tissue and over subscription to the stupid tax. So I’ve decided that I’m going to turn my idiocy into cash and I then about four years ago when I left the franchise I was with for 16 years, I’d become increasingly disillusioned because every sales methodology out there has this one size fits all sales playbook that’s focused on numbers, not people.
And I learned the hard way. I made many mistakes, missteps, I’m not proud of many of the things that I did. And I watched so many deals crumble and the harder I pushed, the less effective it was. I found myself pushing to keep deals in my pipeline that shouldn’t be there because I wanted to look busy and keep my mortgage paid. And I saw what happens to salespeople when they burn out. Chasing empty targets that are over assigned over assignment in a quota is one of the biggest sins of leadership. It’s selfish, it’s venal, it’s greedy, and you tot up the number of all the salespeople’s targets. Is it 120% or is it 320%? If it’s 320%, which happens often in private equity backed businesses or businesses that are fixated on the next round of valuation and funding and whatever. They focus on the short term output. They don’t focus on the long-term outcome or consequences. And I got really angry with this. So I’ve just spent four years essentially looking in the ugly mirror and ripping out all the things that we do as sellers I to get in the way because we only have one function as salespeople. Empower the buyer to make the right decision for them,
Nothing else. They don’t want to be sold, coerced, managed, pressured, convinced, closed. What they want to do is make the right decision. Well, they don’t want to make the wrong decision and they don’t want to make the right decision badly that will backfire.
Jeff Standridge:
And they buy for their reasons. They don’t buy for our reasons anyway.
Marcus Cauchi:
Exactly. And so we started out thinking, how do we behave ethically? So one of my favorite maxims is if the truth won’t sell it, don’t sell it. That’s from the 1920s. I can’t remember who I should be ascribing it to. It’s not mine. But what a brilliant piece of advice. So our job is to empower the buyer to choose wealth. It’s to facilitate buying. And to do that, I believe that we need to be people-centric and we need to be really, really ruthlessly hard on the process. You don’t go blaming your salespeople when they are actively doing what you told them to do. And so then the third principle is that we look for sustainable wins, not the quick close. So let me ask all of your listeners this one question and then I’ll be really curious about your reaction. Why do we prospect? Why do we market?
Jeff Standridge:
Why do we prospect, and why do we market? Well, why do most organizations prospect and market is to identify, to take suspects and turn ’em into prospects and take prospects and turn ’em into clients?
Marcus Cauchi:
Right? Okay. But if you look at the way they are measured, the way the individual contributors within sales, business development, marketing, customer success, product operations, see their part, are they focused on the customer and everything they do is built from the customer out or are they focused on the supply side metrics, the outputs like dials, demos, presentations, and revenue, none of which the customer gives one jot about,
Jeff Standridge:
Well, not only are they focused on those outputs, those activities, if you will, most of the sales enablement systems that are created to assist the salesperson at enabling them to make more sales are really sales management tools to help them track the activity.
Marcus Cauchi:
Well, absolutely. CRM is a thinly disguised vain attempt to give management the illusion of control over the numbers.
Jeff Standridge:
That’s right.
Marcus Cauchi:
That’s exactly right. Whereas what it should be is a tool to help salespeople find the most effective way to sell more to the same people over and over again and create the conditions where those customers want to come back and would hate to be without the service. So let me finish the answer to my question. I believe we prospect for customers for life who are profitable, are in our ideal customer profile and nobody else, and they repeat, they expand and they refer. That’s why I prospect. I’m not interested in anything less than that When I’m looking for a new customer, and think about this analogy. You’re at a festival and there’s an ice cream van and it’s hot. There are thousands of people walking past your ice cream van. The people who are motivated to get an ice cream and really want one they queue and they wait. Why is it we do not have that mindset? How do we create the conditions where customers come to us because we are perfectly suited to help them achieve the outcome that they want. Because no one buys your product or your service outright and they never buy your product or service anyway, they rent, they hire an outcome.
Jeff Standridge:
For sure. No, I completely agree with you. And we spend so much time, I’m going to use this word loosely, trying to coerce them to get into I queue.
Marcus Cauchi:
I’m with you a hundred percent. I will tell you, let me put this in stark reality. If you loved somebody, would it be an act of coercion or an act of love if you took them to their most painful memory or their most recent painful memory in order that you could get them to do something or give you something that you wanted for your selfish self-interest completely co. Would that be an act of love or coercion?
Jeff Standridge:
I’m completely coercion,
Marcus Cauchi:
Right? So my premise is this, why do we not sell with love as opposed to a non-consensual, coercive relationship where we are interrupting people and trying to foist on them stuff that we think is important in order to hit our quota? My question to everyone out there is this, if you have ever brought forward a deal in order to meet a number, I ask you this. Is it fair, right, or reasonable to ask your customer to pay the negative price for your failure to prospect months before? Not at all. So why do we do it? Why do we institutionalize it? Why do we have playbooks?
Jeff Standridge:
Well, we’re the proverbial hamster on the wheel, right? And we’re on the wheel doing what the organization requires us to do to meet the organizational expectations versus the client expectations.
Marcus Cauchi:
Okay? So the reality is the lived experience of salespeople at the moment and managers is this, they have to walk a tightrope where they have to deliver to the customer’s expectation and deliver the outcome that they rent, whilst also being able to satisfy the supply side metrics, outputs and be successful without burning out.
If you’re on the hamster wheel and you never stop to think, what’s the probability you can ever get off virtually zero. Lovely. So given that we know that the chances are virtually zero, and yet we’re trying to follow this dream where we have agency, we create the future we want for ourselves, how many people in your experience have actually created a deliberate intentional plan working backwards from the outcome that they want, identifying exactly what resources and roles need to be in place and how much budget and when they’re going to need that budget all the way down to this moment in order that they have an operating model that they can work from and achieve the outcome with certainty? Very few.
Jeff Standridge:
Almost none. Almost none.
Marcus Cauchi:
And when you’ve come across people who do that, what sort of life do they create for themselves? They create the life
Jeff Standridge:
They live to work versus work to live.
Marcus Cauchi:
Have you noticed how happy and chilled and satisfied and humble those people are? Absolutely. Because their motivation is intrinsic instead of trying to satisfy extrinsic,
Jeff Standridge:
Right?
Marcus Cauchi:
Like the flashy car, the house, the job title, that real power comes from influence, not a title.
Jeff Standridge:
That’s right.
Marcus Cauchi:
And what I think most salespeople do not understand is that you are a leader. If you empower other people to make good decisions, well, that is the only function of leadership.
Jeff Standridge:
I’ve said the skills of leadership and sales are part and parcel to one another. People follow people they know, like and trust. People buy from people they know, like, and trust. And so both of those are elements of leadership.
Marcus Cauchi:
Jeff, let me ask you this. When you are making a really important decision, do you want to be convinced by somebody or do you want to be certain that the decision you are making is the right decision for you?
Jeff Standridge:
Oh, completely. I don’t want to be convinced. I don’t need to be convinced by someone. I need to be provided with the information and empowered, as you said, to make a good decision based upon the reasons that I’m buying in the first place.
Marcus Cauchi:
Okay, so for your audience, here is a life tip that will double your close rate immediately. Ready? Do not sell. Facilitate buying. Ask yourself this question, what am I doing that is causing my buyer to perceive me as a threat? And if you look at the Jolt Effect by Matt Dixon, his research, the thing that really leapt out at me was this 60% of all pursuits that a company pays marketing to generate and sales to follow up on and management to manage and leadership, to listen to the fiction that’s the forecast, and then make bad decisions off the back of incomplete information. Information. When that happens, what we’re effectively doing is mortgaging the future. We bring a deal forward, we put the customer under pressure, we send their brain the signal that we are a threat. 60% of all deals end up in closed, lost, lost no decision. So they’ve been good enough to invite us in, open their doors and we blow it. The data on this is terrifying. On average for cold calls, it’s roughly 33 to 46 dial attempts to get through to one human being on your list for a warm follow-up where you’re not put straight through, it’s six to 11 follow-up attempts. So if you take one TAM opportunity and you follow it through, you’re not going to make a sale because they could buy perhaps, but they’re not right. And you’re going to suffer if you do. Well, think about the mathematics of it. If it’s a cold lead who’s not in your ICP, that’s 33 types attempts. Then you get through. On average it takes 14 first calls to get one first meeting and then only one out of eight first meetings results in a second where you get invited back
Because you are timely, relevant and valuable to that individual. Now to my mind, we are looking at the wrong end of the problem. What do we have to do to double that conversion rate from one out of eight to two out of eight? Because then I prevent all of that workload at the top being necessary and I don’t create the dead work. Now then when you think about how many touches I work in complex enterprise sales where they’re multiple stakeholders, the decision has a lasting impact. If they make the wrong decision, it’s probably career-ending. And if not, there will be lasting significant impact on the business, on shareholder value, on the ability to thrive and survive. And I think we’re going into a very tough trading period. I think the next five or six years is probably the hardest trading period anyone will, any one of us will live through. There’s so much uncertainty, so much unrest.
Jeff Standridge:
You talk about selling with love, it reminds me of a book probably, I don’t know, 20 years old or so by Bob Berg called the Go-Giver. You familiar with that book? Brilliant book?
Marcus Cauchi:
Yeah.
Jeff Standridge:
Brilliant book where he talks about the law of compensation, the laws of compensation and value, two different laws that he talks about. Basically together says your compensation is directly proportional to the number of people you serve and the value with which you serve them.
Marcus Cauchi:
Well, again, what’s really fascinating, I’ve just come off the podcast where we were talking about lean and in particular Toyota. Now if you look at the way Toyota views things, the values of Toyota are not anything to do with shareholder value. It’s about continuous improvement, respect for people. This whole concept of go and see, get your hands dirty. They have this lovely technique where they go onto the shop floor, draw a circle of chalk and just stand and watch. You learn an awful lot by direct observation. We have a long-term philosophy. It’s not good enough to do short-term gain if the short-term gain results in a long-term negative payoff, that’s unacceptable for sure. And so you focus on the quality at source. Every individual is personally responsible for the financial health of the business. Every individual is personally responsible for the brand, for the security of the business. That’s a very different place to come to work.
Jeff Standridge:
Very much a different place. So Marcus, tell our listeners, and you’ve talked about a number of topics all related to serving the customer. Talk about or maybe give us a summary, if you will, of the ally method and how you use that today in your practice.
Marcus Cauchi:
Simplest way of looking at it is I see everything as a system and I was introduced to a concept that sent me down far too many rabbit holes called wicked problems. And it was like red rag to a ball because a wicked problem is by definition insoluble. Well, actually, if you look at wicked problems, they’re made up of very complex problems that are interdependent and intertwined and complex. Problems are made up of hard problems and hard problems are made up of simple problems and simple problems are made up of bad decisions. If we can find those bad decisions. And then I have a five step process, you are either in green, amber, red, or the blacklist. Everything gets looked at and if it’s below 80% effective as a value chain, it goes into triage. We apply the RACI model. So responsible, accountable, consulted and informed. The person who is accountable, IE, it’s their head on the block, is the person closest to the problem and with the greatest to gain from making it work. And they have total authority over anyone in the organization involved in that swim lane.
And we triage everything and we ask these five questions, what’s the outcome we intended and how well are we doing against it? What isn’t working well, let’s stop doing that. What are the constraints? What are the obstacles that are preventing us? Let’s just clear those out the way and the things that are out of our control accept then what works, what works better and what works best. One of my favorite lessons was when you come across a good idea, keep looking. Richard said, Feinman, the physicist, said the most important thing is not to be fooled and the easiest person to fool is yourself. Well, instead of just the way I’ve seen most SaaS companies work is they focus on efficiency, then they worry about effective. That’s like Volkswagen knocking out a bunch of cars and then having to recall several thousand of them at massive expense. It’s not a good move.
So you want to fix the problem when it’s in production, not once it’s in the hands of the customer because they’ll talk about it. And then you’re responsible for damaging the brand. The outcome. How well are we doing? What’s not working? Stop doing that. What works? What works better? What works best? Then test, test, test. So we use mission, what do we want to accomplish? Purpose. How do we want to do it? In our case ethically, principally in a principled manner that is sustainable and generates repeat customers for life who would hate to be without us?
Okay. Then we have five swim lanes. Those five swim lanes are broken down into 90 day sprints. Those 90 day sprints have monthly milestones. The monthly milestones are broken down into weekly experiments, which everyone who is responsible for a little piece does each week and then they report back and we keep a failure log so that we keep iterating out the bad stuff and then we scale and multiply. So that five step process, if it’s over 80% effective, it’s in green, you leave it alone for now, it will get to it later. If it’s in Amber, it’s 50 to 80% effective at getting the job done. So all the elements of go to market are to deliver a paying customer who stays for life and repeats and refers. If we are doing anything that prevents that from happening, we want to remove it from the system, then we want to look around and we want to see what other people are doing because talent creates some genius, steals, steals. The beauty of intellectual property law is that you can’t patent an idea. You can patent the expression of it. So steal from therapies, steal from other industries, but give them credit by all means. But learn what works and apply that and then test it to death. Try to break it and create a culture where is never hidden. I have a rule. If you write your failure down in the failure log, no problem. If you hide it, you get fired.
Jeff Standridge:
You get fired. For sure. Absolutely. So we’re talking to Marcus Cauchi, he’s the originator of the Ally Method. Marcus, tell our listeners where they can get in touch with you, how they can connect with you.
Marcus Cauchi:
Best way is on LinkedIn. There are only two Marcus Cauchi, C-A-U-C-H-I. The other one is a much younger, better-looking chap with hair who’s in recruitment, and I’m the grumpy bald chap. If you want to get hold of me and have a chat, DM me. I offer half an hour to people who are serious about making these changes and they can take my selling aptitude test takes about seven minutes, and at the end of it they’ll learn three things that they didn’t know about themselves that they’re getting in the way of themselves. If they stop immediately, they’ll see performance improvement.
Jeff Standridge:
Great. Marcus, once again, it was great chatting with you. I appreciate you taking the time to spend it with us.
Marcus Cauchi:
It’s been such a pleasure. Thank you.
Jeff Standridge:
Yes, sir. This has been another episode of the Innovation Junkies Podcast. Thank you for joining.
Jeff Amerine (Outro):
Thanks for tuning into another episode of the Innovation Junkies Podcast. We hope you gain some valuable insights and inspiration from today’s conversation. Be sure to subscribe for more episodes featuring leaders in the forefront of innovation. And don’t forget to connect with us on social media to continue the conversation. See you next time.