Mike Schultz, President, RAIN Group

Scaling Up Services - 010 - Mike Schultz

Mike Schultz, President, RAIN Group

Mike Schultz is president of RAIN Group, Director of the RAIN Group Center for Sales Research, best-selling author of Insight Selling and Rainmaking Conversations, and he’s been named a Top Sales Thought Leader globally by Top Sales Awards. 

Mike and the team at RAIN Group have worked with organizations such as Toyota, Bright Horizons, BNY Mellon, BDO, Hitachi, Lee Hecht Harrison, Lowe’s, Agilysys, and hundreds of others to unleash sales performance. 

Business Week, Forbes, Inc. Magazine, and hundreds of others have featured Mike's original articles, research, and white papers, and frequently quote him as one of world's leading sales experts.


Download RAIN Group's complimentary white paper 5 Sales Prospecting Myths Debunked:


[00:00:01] You're listening to scaling of services where we speak with entrepreneurs authors business experts and thought leaders to give you the knowledge and insights you need to scale your service based business faster and easier.

[00:00:15] And now here is your host Business Coach Bruce Eckfeldt.

[00:00:22] Welcome everyone. This is scaling up services on respectful of your host and today we're here with Mike Schultz. Link is the president of rain group and also the rain group Center for Sales Research. He's also best selling author of insight selling and remaking conversations. My guest pleasure to have you on today. Eat your full bio we'll be on the show notes here. I want to jump in and talk a little bit about your experience in selling and particular years experience in selling services but the place I always like to start is to give people a sense of your background. How did you get to where you are today. What's been to me a little bit about your background a little bit about ringer. And then we get into some of the questions so welcome to the show.

[00:01:01] Thanks. Thanks for having me. So let's see my background. It all started when I was 5 and I read in search of excellence. Just kidding. So potluck. I ended up selling pot. I thought I was smart coming out of a nice undergraduate school and I wanted to have a word consultant on my business card. So I applied to consulting firms the firm that I ended up landing with when I was 22 years old was a sales performance consulting firm so I was analyzing sales process and strategy at midsize and large companies that each wanting to read. I ended up after about six months of this as part of a pot luck story for you about six months of strategizing about sales. But more senior guys who know I was the young smart whippersnapper who could do their work for them. You know I said to the CEO of the company was a small consulting firm. I feel like I've been reading about skiing for six months and I've never put on screens so I don't know. Do you mind if I pick up the phone and write some letters at the times it was letters and phone call call me. Call me alchol call anything good and try to get some meetings and try and join you in some.

[00:02:03] Yes sure. So I ended up they ended up firing the director of sales because I was using them with generated meetings. That wasn't a pretty situation at a young age so it was the sales process and strategy. And I took over a division of a consulting firm where at a young age I had six full time and 30 dotted line sellers to me and it was all for professional services. So I did that for three years and then I started my own firm. So at 27 I had a business partner who was 22 years my senior he's still my partner today. And we had to go sell ourselves so we not only do we do sales training because it's a part of our our collective backgrounds but we also had to go off and sell and I thought these the almost 50 year old guy. He's the one that's going to be credible that's been running 50 million our business and been a senior vice president of sales and I'll probably be in the background and we ended up that I just as much just as much as he did.

[00:02:59] You know Joe said today. Yeah. So what are what are some of the challenges. I mean I guess you know we're talking about selling services and I think services has some particularities is very different than selling widgets. But from your point of view like how do you see or what are the big issues around selling services as a thing you're out there in the market trying to pitch. What are the challenges for you.

[00:03:20] Well I mean the obvious one is the intangible. I can demo the technology I can demo my awesome on it. I can I can walk people through a product and you can do the kinds of product comparisons. But if I am selling technology services or if I'm an engineering firm I'm getting a suit he good in a suit. We're all kind of articulate the PowerPoint points look okay. It's hard to differentiate when you can't see it touch it feel that sort of intangible nature. It's also harder to sell them intangible because you have to be the storyteller behind mass how it comes across doesn't come across because I give you a 30 day trial that's not going to work if I'm capping a brownfield I will try it for I will try for 30 days if you don't like it send it back. I don't actually work like that. You don't like you by the time we get to the foundation if you don't like it you don't have to put up the framing. So. So it doesn't happen yet. The other big challenge I want to talk about for selling services is less about the dynamics of selling services and more about the emotional problems and challenges that we'll have with selling services. The biggest thing that is in the way of selling services are the people selling the services and what they think selling is in how they approach their time and day and that they care about selling to the first ones to say at a meeting all of X Y Z kind of professional services provider. I'm not a sales person. The second you say that you use Lutfullah has I believe that you believe you're not good at it. You don't try to get good at it. You don't focus on you don't embrace it. I'm proud of that. You're not trying to figure out how to do it well. So the sellers observances apt to get out of their own ways they can do that. They contend this time.

[00:04:57] You know that kind of mindset. And the kind of the story that you're telling yourself comes up in a lot of parts of business and performance. You know in many ways.

[00:05:05] But I think it's really really critical in sales. I mean it's just how you show up in that cell conversation is probably the the biggest factor in terms of the likelihood of outcomes or desirable outcomes.

[00:05:17] So what are the what are the typical yes mindsets that you see people kind of starting with that are not so positive. Tell me about sort of though the starting point that you typically see and then where do you work with people to kind of move them away from that.

[00:05:32] The first one is probably I don't like selling. I don't want to sell. I'm not good at it. I can't position myself I can sell something else aside and says this is just all the emotional stuff. And then it's the I'm too busy to sell. I have clients. I have other other priorities. Well you can focus on your other priorities if you're happy making what you make and doing what you do and it's good enough to not sell to stay steady then have a blast. But if you want to scale up your service business you're going to do that through selling out.

[00:06:00] When we started our business much like you we focus exclusively on service businesses and we were sales consultants for service businesses and we would do and we were tactic neutral as in we weren't selling the idea. If you see growth from a PR firm The answer is PR and you might miss yo yo. So it's more a tactic neutral and we would come up to do the analysis and Lucille you can work on the Web site here you can work on your messaging here you can work on these kinds of events here. But the fundamental problem is is that U4 have been selling for 15 years here and now you have a 100 person firm you have about 30 people who are about your age and about your level.

[00:06:40] When you started this firm and you haven't answered one of them to sell then not if you could literally just get 10 of them to sell a quarter of what you do you will double the size of the firm. So the the the lever Topal was typically through the people and they had reared them in such a way that selling was a bad word.

[00:07:01] You don't want to do it. They never taught them and now they're 47 years old and having tried it.

[00:07:05] So that situation is so common know it really is a ceiling. I think ultimately for a lot of services companies where you know that the growth of the company ends up being constrained or constricted by the ability of that senior person or that senior team to sell and they really haven't created any kind of system in any kind of process of actually creating more sales people not just selling strategy and selling process but actually training people to actually sell.

[00:07:30] Yeah. And it a service firm sometimes it's a salesperson there's a bidi person but it's usually through the strength of the professionals themselves and what they do. Just a huge untapped opportunity across Texas accounts for cross-sell up sell just building practices that they just don't even know what to do. They don't they don't know what to do. The challenge is not about the service itself. It's about the people and your strategy and your ability to put one together and then execute against that over the long term.

[00:08:01] Yeah. Now there's a couple of different kinds of types of services businesses but do you see differences and I'm kind of curious on what type of service businesses you've worked with if you see differences in them either in terms of the industry or in terms of models. And are there different approaches to selling in those situations or is it really it kind of doesn't matter.

[00:08:19] They're all but you you have the same basic model that maybe gets tweaked. Tell me a little bit about the different types of services and how you approach them.

[00:08:27] Yeah certain things don't matter and certain things do matter how we work with all four of the big four plus accounting firms with 10 and 50 and 100 and 500 people we worked with multiple Amboise 100 firms and as well you're 50 person law firm and your 10 person law firm we have we actually had a program had a Salkin architecture engineering consultant and construction so we had one specific we focused on ABC we worked with large low engineering firms and also you know 20 people at a regional firm management consulting is different than technology services so there are certain things in the dynamics. If you sell a service that has a 75 mile radius you're going to be doing a lot more networking a lot more knowing the financial guys a lot more knowing just all the people in your circles of influence. But take a business like ours. We have more of a local component a long long time ago. But we went from how service businesses start to guys to laptops the kitchen table and the dog. And we now have our headquarters in Boston and we have offices in Geneva London Mumbai SYDNEY JOHANNESBURG Toronto and Bogota. So I don't need to go to a local networking event because our calls come from major cities. It's not just I need to know people so do you market locally do you market more nationally or globally.

[00:09:43] So there are certain nuances there the things that actually aren't the same are to ask the question what do we need to do to activate the people here for selling. You have to ask that question same question the nuances might be different. And a lot of the dynamics that we talked about before are the same that it want to sell and I'm not good at it and if you are naturals and some are never going to do it but there's a bell curve in the middle that can other things that are are similar is how to lead a great sales conversation. Those diners don't really change that much across industries. How to Grow your accounts. We are a diversified management consulting firm and we bought other firms and we have services across five different areas and they only buy this from us. We with one of the largest recruiting firms they had bought a large leadership firmly in our second graphic assessment's company. They bought a couple of other firms but they also had their own banks asking the question in approaching how do we grow our accounts. The same question the individual strategies for accounts are going to be different.

[00:10:45] The questions are the questions so the fray kind of the framework is the same as you apply to the different situations where you had to kind of make the adjustments and the tweaks to tell you actually do it.

[00:10:57] Yeah let me give me an example though most services firms when they come to us let's just pick accounting. Okay doing tax and audit. But we have consulting services that nobody brings up. We have we have technology services that no brains. We have risk management that nobody brings up selling these what they call value add services are huge untapped opportunity that people want to tap and certain things just kind of come in and are repeat business. Well it's the same kind of dynamic to be able to get them to go from reactive to proactive to get them to understand that it's not just about if somebody calls and says let's say you called me anom account and he said we're looking to switch accounting firms. I have become in the office. My first question should be what brings in what are you trying to sort out what's going on with your accounting that you're not getting that you shouldn't get. So I'm I'm asking those questions and doing the needs of every night thing go a certain amount deeper. But let's say I'm selling something proactive. We can walk into companies and if we have a company that we can analyze it's over 100 million dollars in this industry we usually save them 3 million dollars in their bottom line and we actually share blah blah blah. And I want to set up a meeting to talk to you about our cost reduction services that have you know had such explosive results in other places. If I walk in and say someone brings in and what what are your needs in this area. They're going to say I don't know you set up the. You have to know it's very different to any other kind of the inbound outbound Leelah or even just yet reactive to proactive Sure. And the only understand the reactive and they start shaking in their boots when they have to actually start and you'll use the word pitching some Safka listen you have to ask questions what the dynamic of how you actually run that discussion it's just a different flow. Yeah. And then on how to do that.

[00:12:48] Yeah well I think it goes back to the mind up to as like I can I can if someone is coming to me with a problem I can help them solve it but I can't actually go out and identify problems that are out there or even help people understand the problems they may not even see and figure out how to sell against those.

[00:13:02] Those are the very different approaches are sure.

[00:13:05] So how. So give me some give me some tools or give me some sense or framework so how do you advise or how do you help people with with those conversations with that process. What are some of the key kind of structural elements milestones in the conversation. How do you how do you approach them.

[00:13:21] Well the first part were talking about service businesses the kind of work that that you do is absolutely essential and we do some work kinds of things to help them understand what is my growth strategy.

[00:13:33] Do I want to do this and can I look at with open eyes. What needs to happen to get there. And we have work with service businesses to do analysis on their growth. And we said you're growing at 6 percent. You can definitely grow double digits. You could grow 20 percent of the year if you just did the same activated. And you have this great company that you bought or the service that you have that literally just had more people brought it up and brought it out you'd have a lot of growth and it's going to require doing things like this. We've had some companies grab that and run with it and double the size of their service businesses and we had others that said again we want to do it and it doesn't sound like you really want to do it. Are you willing to change it.

[00:14:13] So it's the how many psychologists take to change a light bulb response one but the light bulb has to really want to change lighting all that stuff.

[00:14:21] That's the answer is all of this pencil stuff but then you have to set up the structure of the structure. So at Reyne group in 2011 we're a service business and we actually made a decision. Are we going to go for scale or are we going to keep it small have nice lives get the extra cash and go 10 or 20 years and just have our little business. And we decided to have scale and we set up a five year plan. We lopped off two thirds of our services. We started investing angel investing our own money. Now we're at the tune of about 4 or 5 million dollars invested in certain technologies platforms product marketing. So we could actually go and have growth. So we set up this platform so we can you know we can shoot up like this because if we didn't do that in our industry then we wouldn't be taking advantage of the structural changes in the industry and how everything was moving. If we just said let's just pick up the phone more. Yeah we have certain things we need to do to actually be more competitive.

[00:15:19] Yeah I think you're hitting me you're hitting the kind of the nail on the head in terms of these questions have been the two the two that I find really critical at the beginning of engagement are the beginning of mean one is yes as I question Do you really want to grow. I mean what is the growth outcome desirable to you personally and as a company because I think a lot of times you know people kind of get caught up in. Yeah I want to grow want to get big but we actually start looking at. Okay well that's what this is going to look like you're going to have this many people you're going to be operating these kind of services you're going to have this kind of scale you know do you really want that. Is is a question that you really need to kind of sit on and answer really definitively before you engage it. And then the question is as now or are you willing to do what needs to be done to get there. And sometimes they want the outcome but you the decision. Like you said you know you had to make some tough decisions about lopping off services just tough decisions about taking on investment getting that capital if you will to grow. And those aren't easy and sometimes as much as you want the outcome people are not willing to do the work. But if he can get those two pieces at least we've got a fighting chance to do that. And I think that's really ketoacidosis Yeah.

[00:16:23] So bringing that down from once the analyst questions the sales tactical kinds of things asking Who here can sell who here will sell. Where's the untapped opportunity to activate people's you know potential for growth in selling that. I don't even know where that is. You have to ask yourself what are the areas that if I pull the levers would actually help us grow more doing to pull in more new logos. So I'm going to need some kind of prospecting or you know whether it's you know I mean that's very different local than say national and international. I'll leave off all the marketing stuff and the operations stuff but just just from a styling respect.

[00:17:01] Maybe it's our task. Do we have opportunity to grow in our counsel. How do we do that and how do we take proactive action to grow them. It's actually we're just we have plenty of inbound and outbound but our win ranges and it's just conversations aren't strong enough when we see a big opportunity. We don't know how to strategize to really pull that in because we're coming in second place to off. So you have to find where the critical areas to say we improve this metric if we include this area that's 10 percent growth rate there. That's 20 percent growth rate there is that actually do it.

[00:17:35] I think letting I like that whole It really is looking at it as a process and saying hey wait it may not just be about putting more into the top of the funnel.

[00:17:42] We may have stages of the funnel that we need to figure out either how do we filter better how do we convert better or are we actually moving the right Beal's you know through the process should we be pulling deals out sooner that aren't really you know a target for US qualified for us. And I think that's smart is really kind of taking taking a step back and probably looking at the processes you have and then you figure figuring out where those those points are that are kind of actually actually impacted some meaningful way.

[00:18:05] Yeah. I'll leave you one more point. I think it's really important for service businesses when the service providers themselves when they change their mind to say I'm really going to do this in some ways teaching them to be like an entrepreneur or versus like an employee where they say here's MicroStrategy here's my practice growth strategy. Here's my sales plan. Here's why I'm doing this. And here's my own clan to be motivated to actually sell to find the time to sell to not have the excuse of Oh I got too busy to do it over a consistent period with is one of the biggest challenges we're seeing over the last just five or 10 years.

[00:18:43] Distraction. The world of distraction. I mean everyone thought they were distracted ten years ago. Now we have the world at our fingertips distraction and our phones all the time that the social scientists at the phone companies and the messed up social media companies have their little hooks in our brains and I literally it's weird. I just had a lunch where I talked to the person for an hour and a half. I haven't looked at my phone for an hour and half of that people's ability to tune out distractions and their ability to concentrate and get this job. And this is absolutely necessary to succeed at selling. So we have a client where the skills we've worked on that wasn't the issue they weren't doing it. So we came back and we said let's do our upstream sales productivity challenge No. And we put them through a program to figure out how to what was most important what would it be. How are they going to find this time. And then we get put in accountability systems over 90 days and it was massive. It was like a 16 times return. We did it. We did it with a telecom company where it wasn't a service company but we put several hundred people through it generated a hundred million dollars and pipeline wasn't even a skill program.

[00:19:52] So no I didn't and it's funny I laugh.

[00:19:54] The ability to be productive and to change when people go from reactive to proactive. They need new tools now to be able to do it.

[00:20:02] Yeah the whole productivity like how do you really assess all the things that you're doing on a day to day week to week basis and tease out from there the things that are are really hyper highly productive and those things that are not.

[00:20:14] And oftentimes that's not an obvious analysis and then figuring out the strategy is how to Ivery prioritize on how do I. How will I put in place structure. Because I think that so much of it is not just a motivation. I mean yes you need to be motivated and you need to be clear on what your priorities need to be. But if you don't have the calendar structure or the technical structure to manage the incoming distractions that you have coming at you you're not you're not going to win this. It's like you said that the company companies have mastered the art of getting our brains fixated on dopamine which don't we don't have processes in place rhythms disciplines in place to be able to do that.

[00:20:54] It's hard working with leadership teams. One of the first things we're doing is looking at what are the two hours you're going to spend every week focusing on strategic work and if we can't get that in place I'm kind of like there's no point there's no point in doing all the other work if you're not going to be able to find those two hours a week.

[00:21:08] Indeed indeed. So that's what we did for ourselves for growth 2 because in 2011 we literally changed our focus changed our name started from scratch lopped off two thirds of our services and said if we don't have a good plan to actually make this go it's going to go nowhere. So we spent five years executing a five year plan and we just came up with our own new five year plan and it's a huge part of it was developing that that infrastructure to be able to scale. And then for the last two years it's been about finding people to sell. Finally will the grow practices and giving them something where they say it up. What we didn't want them to say like just do this on my arm. They can say I could work on my own for three years and invest millions of dollars and still not have what you have and I could sell sales training for myself. And I could be doing 20000 euro 50000 there but I can't sell a million dollar clients but if I work with you I can sell to our clients and I have all of the stuff that I don't have to worry about. I can just you know we need people that can deliver. But it's just a lot of people just wanna sell and Gilliver they don't want to do the rest of it. So we had to create this to be really attractive to people to sell and now we're just trying I'm trying to find the right fit so people that that vision. But that was all the ups service business growth strategy for us. Once again it's all about selling and blanker.

[00:22:26] Yeah I'm curious. So you mentioned that you lopped off a couple of services that you were offering at the time and I think one of them one of my kind of tenants of that and if you want to scale and if you want to scale quickly you have to focus you have to actually do offer less offer fewer things. Now how did you actually decide what to. I mean I guess what we're dealing with are what were the ones you decided to lop off and how did you make that decision. What did that look like.

[00:22:49] Yeah sure. I mentioned that we were doing sales and marketing for service businesses so our our revenue was probably 40 percent marketing 30 percent strategy 35 percent. And then the rest was sales training all the business development stuff. So this was 2011. We we actually were on the in magazine's list of the fastest growing companies in the country in 2008. We were cruising along we hit the recession we actually held together OK we didn't grow during that time. But we also didn't shrink or state about the same. And then around 2010 we said all right. It's time to go from playing defense to playing offense and we said how do we double our business in size and double it again. And you said can we be great at all three of these things. No. And also is our market big enough to sustain a larger business and we said now I don't necessarily think that we want to leave just focusing on service businesses wanting to globally scale company. So we said what are we really great at and what are the kind of business we know how to manage and if we set a goal to say and I know this is going to sound cliche and pat yourself in the back to be number one in the industry.

[00:23:58] What would it look like to actually be not just a nice little growing service business in the sea of service businesses but to be a global leader in something. And we said in the area of marketing and changing like crazy and all the different things we need to do like the generation in INBOUND marketing and it's like all right if we want to do that we would have to change a law to be a b create and we more scared for wired the strategy we'd have to drop both of those things and do more like strategy consulting and actually build the infrastructure for that instead of just four or five smart guys that know the industry. We had to build that. We said that's not necessarily where we want to go but our backgrounds were training companies. My business partner was of the American Management Association and the executive team there who's the president of Management Center Europe.

[00:24:44] And I had done the same at another company enthroning 200 public seminars a year 400 in-house programs. So we set our sales training and the executive education side is what we know best from a growth perspective. So it was our smallest areas so we lock them off and we said we're going to do less and obsess about having the best offerings and best growth structure. So a lot of service businesses actually do have great offerings and nothing in their way is their own organizational construct. We don't want our organizational construct to get in way. Why aren't our organizational construct to help us grow. And that's where we are now.

[00:25:23] Yeah I like that the whole you know understanding that strategy is a function of not only you but the market and the competitors that you're going to play against and figure out what is that right choice in that. Because I like a lot of people go out they get very kind of you know internally focusing. What are we great at what do we really want to do. But they failed to really look at where the market opportunity is. But I think that that is a good story for really pointing that out.

[00:25:45] So then I had another question on the. You mentioned one of the things that you're doing is how do you find more salespeople. How do you actually find salespeople either either internally when you're going into a service based business and seeing that you've got this you know concentration of senior sellers and you're looking at trying to expand that to other people inside the company. How do you identify people who are going to be good in that role is there any tricks or secrets that you have.

[00:26:10] Yes so I used to work with this grizzled old consultant in a jar and I asked him we were going fly fishing one day. After 25 years in the industry what's still the hardest thing for you to do and he said probably the hardest thing is when you're interviewing someone especially for a senior position is to figure out and sort out the real deal from the articulate phony. And that is even harder in selling a lot of times you find out that they suck. You find out in about six months almost nothing that you can do in the interview process to sort that out. You can however get better. We use psychographic assessments to help us find the right person when we actually step back and say the biggest problem I think in service business is when they hire sales is they don't know exactly what they want them to do. They just bring in someone with the Rolodex that's usually straight ones like when you get very careful about what you want them to do what the expectations are and then you have to ask yourself to these expectations. Is this how it's really going to work especially going into service business will say All right we're going to hire in the business development person to set meetings for senior people say. Because if we can get in front of people we can close them and we're going to pay them 40000 dollars a year a couple of years out of college or prior to of college or 50000 some low auks and you know they can generate 10 meetings Zowie that's you know beatings for saying Are you crazy.

[00:27:29] You think it's that easy to generate 10 meetings a week. You are by man is like another planet. Bananas for what you're selling. This is a spreadsheet fantasy. You might as well stick a unicorn on the Net. Yeah but you know and then they made the switch or they higher snooper's when we get a guy that's been you know ten years in the industry and he's got a Rolodex blah blah blah.

[00:27:50] I'm honored 25000. They say you know what let's get to you in case one. And they both fail so they end up wasting 250000 dollars. They just you know they have to know what they want me to do. They're not rigorous enough in the interview process. They don't do things like really digging in and then digging and they just get happy years because they see dollar signs they think it's going to be easy. Yeah. So then you're going to end up doing.

[00:28:12] Yeah I always find that. I mean interviewing is tough anyway. I mean they don't pay for anybody else. It's easy it's easy to see what you want to see. It's tough to ask tough questions but I think sales is even more so because you're dealing typically you're dealing with people who can be very persuasive. And ironically just because they can be very good at selling you an interview doesn't mean they're going to be really good selling your products or services.

[00:28:32] So a lot of them are so loaded on here. So if someone wants to find out more information about you about the book about services. What's the best way to get a hold of you or what are some resources that they can they can use to learn some of the easiest ways just to go to a range of Damari you can find me on LinkedIn.

[00:28:49] Mike Schultz Mike Schultz five hundred I think is what it is by just going to recruit dotcom or googling Mike Schultz Reinke group and you'll find you'll find more than you could ever ever want to read for any minute. We actually also run the ranger Center for Sales Research for anyone that wants to reach out and get access to the research into Semien e-mail or both the website emails and Mischel semmit CAQ LTC rain group dot com and define the books you can find them on the website. You can find them on Amazon. You can also find the one you didn't mention which is professional services marketing which is all the way back to the days when we used to focus on services. Books books are easy to find too.

[00:29:27] I will.

[00:29:28] I will make sure all of that is in the show notes here so people can find the links and find the titles. Mike it's been a pleasure. I hope we can hopefully combine and other obdurately into this again sometime. But it was absolutely fun to have you on here and I appreciate your time.

[00:29:40] Well it was great having you on. And thanks for doing this

[00:29:44] You've been listening to scaling up services with business coach Bruce Eckfeldt to find a full is the podcast episodes. Download the tools and worksheets and access other great content. Visit the Web site at scaling up services dot com. And don't forget to sign up for the free newsletter ads healing of services.com slash newsletter.