232: Think like an App, with Neal Polachek

It’s not one size fits all anymore, it’s all about thinking like an App. The best package to sell to a business is the one the business needs.

On this weeks episode we have Neal Polachek, Analyst and Advisor to the Board Advisors, joining us. Are ROI’s BS? Neal thinks there are better ways to measure a businesses success on their investment. Business owners are frustrated with all the different marketing tactics when they want to focus on what they do best, their business. Neal talks about the Baby Boomer generation slowly transitioning into retirement and developing an exit strategy. He explains how a different sales pitch is needed to a business owner close to exiting the business world and to someone who is taking over a business. Engaging the end consumer should be approached in an engaging format, like an App. No need to physically build one but thinking about the customer journey and experience.

Introduction

George: You know, when I started Vendasta seven years ago and started to build out sales organization, Brendan King, our CEO, came to me and said, ”You gotta go to this convention.” And I was actually excited to go to a convention. Then as the years went by, convention started to become this love-hate thing that I had. I either loved them because there was some really good content at them or I hated them because there was no leads and the content I’d heard before and there was horrible speakers that they had not vetted or coached. Anyways, I’m getting into the reasons why I don’t like conventions or conferences. Then I met this guy named Neal Polachek and Neal has been advising SaaS companies over the years. He was involved in the Kelsey Group and BIA/Kelsey who put on some great, amazing conventions and conferences. And he has started this new thing where he’s out speaking to local business people, man after my own heart, and he is telling them that they need to think like an app. Neal Polachek is coming up next on the Conquer Local podcast.

Hey Neal, welcome to the Conquer Local podcast.

Neal: Thank you, George.

George: It’s good to have you on the show. I wanna talk a little bit about the work that you’re doing with various SaaS companies. You were advising these organizations and you’re involved with the, the senior leadership. You know, I wanna jump right into it and put you on the hot seat. What are you hearing from these executives and leaders of these organizations when it comes to sales? The challenges that their sales organizations are having. If you were to just distill it down into one thing that you hear over and over and over again, and I’m looking for the problem, I’m looking for the challenge, what would that challenge be?

Neal: I think the challenge is that, you know, even if you roll back the tape, even a decade, these business owners were getting calls from a lot of people trying to sell them media solutions and advertising solutions. And now a decade later, many are still selling media and advertising solutions, but now there’s a whole another layer of people trying to sell them SaaS solution. And what I think I hear most often is, and this is really being heard from the merchants more than the owners of the companies, but you know, the business owners, they’re frustrated because when people get on the phone and start talking to them, they don’t really know much about that business owner’s business. And I think that we saw this, you know, when I was helping the folks at BuzzBoard, we were trying to bring some more data to the sales representatives so that they could have a more compelling conversation with the business owner.

I think that’s still a big challenge out in the marketplace. And I also think that, you know, while you and I could talk about cloud solutions and SaaS and, you know, talk that language, you know, all day long, these business owners are really worried about payroll and finding good help and fulfilling on the promise that they’re trying to deliver to their customers. And SaaS and cloud and all that stuff that maybe is kind of interesting to private equity and VCs and folks like us, it’s not terribly interesting to these guys. So I think it’s the challenge of getting these people who are selling to these business owners to really focus on how they can help them in language that they can help them. Do you hear that often?

The Elevator Pitch

George: Listen, you’re preaching to the choir and I appreciate you bringing this up because I think it is the big challenge. We’ve got amazing new pieces of technology and with anything that’s amazing and new, salespeople and marketers immediately go, we got a feature benefit to them. We’ve got to say, this is awesome stuff. Let’s take them through how awesome it is. And the business owner’s sitting back there going, “You know, I care about marketing about as much as I always have cared, which is very little because I’m concerned about making payroll and then my staff is ripping me off” and it has never been more important for a sales…This is my bold statement but I’m looking to see if you agree with me, it’s never been more important for the salesperson to have a compelling elevator pitch that’s simple and then be able to speak to the objection, because there always is gonna be an objection and you need to be able to speak to that. Once those two pieces are in place, and I’m not saying that that’s simple, then you raise the confidence level of the salesperson. And that’s really what we need to do at a leadership level.

Neal: I agree. But I think the third piece of that is to have some domain knowledge. The person on the phone pitching the business owner has to have some context to understand those objections. Why does the medical provider object differently from the home services provider? If you don’t understand the differences in those categories and those industries and can’t connect with that business owner because you don’t know the particulars, then I think you’re really challenged. And I think this comes to sort of the notion of heard a lot, but I haven’t seen much of it and verticalization because I think a lot of sales organizations wanna sort of boil the ocean and be vertical at the same time. And as soon as they start to verticalize, they go, oh, well there’s an opportunity over there and it’s really hard. It takes a lot of discipline.

George: Glad you brought that up because a week ago I was with an organization that we work with, speaking of verticalization, here’s what’s happened, is there are entire organizations that have done this. Their entire revenue motion and business proposition is around solving the dentist’s problem. And that’s what makes it so hard for a local seller that may have worked at the newspaper, the radio station, whatever it might be going…or even the local agency going in to see that client is the people that are on the phone that just deal with dentists have great case studies. They have the domain knowledge, they’ve got the solutions that could solve the problems. And, you know, I think you and I called them in the space, pure play, but we’re in there training the salesperson, I believe it was that event that you and I were at in London where I was speaking at Google and we went through the whole thing and one of the CEO’s put their hand up and said, ”Hey George, what’s the best package that’s selling on the street?” And I was kind of like, ”You didn’t hear my presentation for the last 20 minutes.” It’s the package the customer needs to solve their problem. You know, this one size fits all thing is a recipe for disaster because somebody else is gonna come in with a better solution.

Neal: Yeah. And I think that’s the crux of it, is one size fits all is nice when you lay it out in an Excel spreadsheet and do the modeling of it to get your round of financing. But it just doesn’t really work that well in on the street in reality. And that’s what’s really hard for a lot of companies to adjust to the reality when, oh, the spreadsheet, you know, says we should be doing X number of closes per day across all these various categories. And it’s hard. I also think that, you know, I have a view that we’re going through a generational shift in the next three to five years, when a whole lot of business owners are having to take the sort of time to say, should I modernize my business today because I have all these opportunities to buy these SaaS things in this the software? Or should I wait until I get ready to sell this thing in three to five years? Because there is a big, large number of baby boomers who will in the next three to seven years sell their businesses, whether it’s a dental practice, an auto repair shop, a window covering shop, what have you. These owners are sitting around saying to themselves, “Well, do I really need to put in this new technology and pull my hair out to get it to work and all that stuff, or should I just wait for the next guy to do it?”

George: Well, you and I both have ran into this over the last number of years when we’re working with media companies. You walk into the room, you get the sales team sitting there and you just point out the three people that are two years away from retirement and say there’s no use training in those people because they’re just riding the wave.

Neal: Well, and that’s on the seller side, George, but there’s a whole buyer side that’s going through that same thing.

George: What you’re saying, if I can read you correctly and I’m not disagreeing, I actually agree with you 100% is there is a different sales pitch to the customer that is looking to exit in X number of years than there is to the buyer that might be the new business owner or is, you know, under the age of 35 and is tech savvy. Now, you’ve gotta have a different pitch depending upon the type of prospect because they’re…again, their needs are different.

Why Modernize?

Neal: Yeah, that’s what I’m saying. And their willingness to engage in the process of modernizing, so to speak, putting all this technology in place, their willingness to do that is very different I think. And I think the pitch to the owner who’s looking to exit or sell their practice or business in three to seven years is you’re gonna get a better premium, you’re gonna get a better price for your business if it’s modernized, you do the modernization, than if you let it languish and the next owner has to do that. You know, my view is these business owners do need to modernize their business now, and in three to seven years it’ll fundamentally be a better business and they’ll be able to sell it for a better price. Now, that’s a piece of research I want to try and do and I’ve been wanting to try and do for a long time. I believe that that is going to be the case.

George: I think you’ve hit the nail right on the head is that there’s a higher valuation if you adopt these new practices. In fact, your exit is going to be hurt if you don’t do it.

Neal: That’s my contention. And I believe that over time we’re gonna see that play out in premiums that are paid for small, medium-sized businesses that have modernized because it’s, like, if I put copper in my house, in the plumbing and I put insulation in my house, I should be able to get a better return on that, you know, than if I don’t. I mean, people say you get money out of the bathroom you remodel. So same thing.

George: So, you know, the next question, and I’m not sure if you’re a watcher of Tony Robbins, but Tony Robbins went on this whole tangent here the last couple of years around, you know, the exit of your business and you know, it makes sense because the population is aging. You know, we’re gonna have this mass exodus of business owners. They’re gonna either turn it over to their kids, they’re gonna sell the business. We need to be thinking about an exit.

And I remember listening to a podcast or reading some material where the first thing that you have to break through with that business owner, they didn’t start, they started the business so long ago. And they’ve been going to business every day to do what they do because that’s their life and that they haven’t been thinking about an exit strategy. You’re gonna walk in and say, “Now you need to transition to the cloud and here’s all the things you need to be competing.” At the heart of it, it is an exit strategy and evaluation discussion that they’ve never even had before. What’s your advice on how to have that conversation or even start that conversation?

Neal: I think that if I were selling to those types of business owners, I’d start to find examples of business owners that have started to do that. I often refer to my friend Dan, the dentist. This is a real life person. He bought a bunch of new technology for his practice. He’s about my age. He’s gonna retire in three to seven years, you know he’s gonna exit. I said, ”Dan, why have you made that investment?” And he said, ”Because while it may not benefit me directly today, it makes my employees and my staff feel like they’re part of a modern business. And if that happens, then they give better patient experience and it all eventually leads to me getting a better return when I sell my practice.” It’s those, it’s like, you know, maybe the business owner doesn’t wanna modernize it for themselves individually, but they probably should be thinking about their employees who wanna work for a forward-leaning business rather than a stagnant, a following business.

So that’s one way I would think about how to position it with these sort of business owners that are scratching their head, wondering what to do. Sell the benefits of their employees getting the benefits. And then if the employees are happy, the customer experience is better. If the customer experience is better, they can charge more. If they can charge more, they can make more money.

George: I love that tactic. I don’t want it to get lost on the thing that you said earlier that I really liked and that was around having some insights to go in because, you know, Dan, the dentist doesn’t even know what his problems are. So if you had some sort of way to show some insights in a concise and easy to understand manner and I love tying it to the staff. So now let’s dig into think like an app. I wanna learn all about it in eight minutes. What do you got for me? Tell me where this came from.

Neal: I was asked by a large media company here in the US, Local iQ to go around and talk about the customer journey. They asked me to think about this late last year. I came up with this notion that what I really should be talking about to business owners is that they don’t need to build an app, George, but they need to start to think about how they engage with their customers the way apps engage with us today, because the world is being run by the App world and our experiences are being defined by the App world and our expectations as consumers are being defined by the App world. So what I do is in my presentation, I take these business owners kind of through a journey of how the modern consumer is expecting to engage with them whether it’s from being open all the time. I mean, you don’t go to an app and the app doesn’t go, “Oh sorry, we’re not open. You know it’s 5:00 after 5:30 sorry, leave a message on the app.”

Apps work 24/7/365. My United App knows my name, you know, it knows how many miles I’ve been flying. So these things, these apps that we’re getting really comfortable engaging with are really changing the customer experience expectations out there. What I tell these business owners is they need to do the same thing. They need to not necessarily build an app because I think that’s probably inappropriate for a lot of businesses. But they need to start to engage the way apps engage with us. Serve up insights.

And, you know, one of the big things I talk about is tracking. Our apps do a lot of tracking, whether it’s me watching the Uber driver drive to my location or somebody who has the Domino’s app watching the Domino’s pizza get built, apps are tracking stuff. Or it’s the Amazon app saying the package left, the package has arrived. We’re all having that expectation. So as a business owner, what data can you serve out to your customers, it doesn’t have to be through an app that can tell them about the process or progress of their service or their order or what have you.

Thinking like an App

And so we go through a whole series of stuff and what happens is, is business owners, you know, the eyes get pretty wide and they kind of go, “Oh, so I could just do that and I would have better engagement with my customers, patients, clients.” And I said, “Exactly.” So I was talking to friend of mine, a pain doctor up in Ashland, Oregon. And he says, ”Well, what the heck is this ‘think like an app’ thing Neal? And I said, ”Look, you have patients, they come in here with a pain level of X over two months. Your job is to move that pain level from X down to Y, right?” He says, ”Yeah. So what you’re telling me, Neal, is that I should be sending out a message saying, ‘Hey George, you came in here and your pain was a 350. Your pain is now down to 120. Here’s the things we’ve done to do that.”’ He’s so he says, ”So that’s what I need to do.” I said, ”That’s exactly right because now you’re engaging with that patient. You’re reaffirming the patient experience that you’re delivering to them. You’re reaffirming that you’ve helped them and they’ve been participating in the lowering of their pain.” So it can apply to virtually every business out there and it’s just a different way of thinking about, you know, how to engage with the customer. And I think it applies to agencies, it applies to virtually everybody out there.

George: You’re absolutely right. No, it makes a lot of sense. As we’ve been sitting here, I’ve received 16 notifications from various apps that are loaded on my iPad and my phone and, you know, I’m dismissing them because I’m paying attention to you. I’m not multitasking. I’m very focused on you, Neal. They’re telling me things that are happening and it’s adding to the value proposition of what I bought or what, you know, why I signed up to that app in the first place. So we are very much engaged that way as consumers. I’m going to the dentist on Friday. I was looking in the mirror this morning, I might want a bit of a cleaning. So when the dentist phones me to make sure that I show up for my appointment, which I think pretty much every dentist worth their salt does that, the reason why it’s very expensive for them if we don’t show up for our appointment, right.

But imagine if three people had canceled their cleanings. I’m in the market for a cleaning because I’m getting closer to that appointment. They go, ”Oh by the way, we had a last minute cancellation for cleaning. Would you like one?” I’d be like, “Yeah, I need one. You know, this is not good. These are supposed to be white and they’re purple” or whatever it might be. So, you know, my point is, is that you’ve really hit the nail on the head. We need to look at the apps that are out there. We need to look at that experience because that’s what our customers are expecting. They have been spoon-fed this experience since the App Store was created and Google Play and everything else that’s out there. And now there’s that level of expectation.

Now the interesting thing, keep in mind, I come from a media sales background and we would walk in to the customer and say, listen, we’ve got 42,000 people listen to the radio station. You’re looking for females, 18 to 34. I’ve got 40% of the market based on the last ratings period. And we’re dealing with all these massive numbers. And when I dig into it, we’re running this ad, we’re sending it out to 50,000 people and you might get one customer in the door. Now we’re in this space where we have these digital solutions and we’ve got to make it have some ROI. So just getting a notification isn’t really making my till ring. How do you see that we’re going to have to work as local business people and helping them with their marketing to really show them that ROI? What’s the, you know, if you were to look at ROI and that ROI discussion, how do you think that’s coming along? Because I know it’s a work in progress, but do you think that we’re getting better at showing ROI?

Neal: I’m sure there’s more data around ROI. I also think that the business owner, you know, wants the right kinds of customers. I mean, ROI is a calculation, right? You spend this, you get this back. The question is, what is this that you get back? Are those good customers? Are those customers who leave satisfied, that say good things about you to their neighbors that write good reviews about you? I mean, ROI, it has to be done. But I think the story is bigger than ROI. It’s around, you know, can you deliver, once you get that customer, can you deliver a compelling experience? Because, you know, ads can drive people to businesses. There’s no question. They could deliver an ROI, you know, that you can calculate. The question is how do we help these business owners take that and extend it much further, build the lifetime value, build the social proof of that business. Those things are hard to calculate. But I argue that they’re almost more important than ROI, because if I just get the person into your shop and they buy something and it’s a crappy experience and they don’t say anything, that’s kind of almost a wasted dollar. But if we can help these business owners figure out how to think like an app, how to leverage technology, how do deliver a better, more satisfying customer experience, then delivering that business owner a customer is super valuable.

Conclusion

George: Well Neal, always a pleasure speaking to you and learning from you and I think you have hit the nail right on the head with the think like an app message. Thanks for bringing that to the Conquer Local listeners and we look forward to seeing you when we see you out on the conference circuit this coming few months.

Neal: I’m looking forward to it, George. Thanks for having me on your show today. I really appreciate it.

George: So let’s dig into what Neal was saying there. He’s a very polite gentleman, so he didn’t want to say that ROI is BS. But he does wanna say that. But here’s what I think Neal is saying. We run an ad campaign and we can get you clicks and we can get you phone calls and we might even be able to get you people into the business, but it may not be the customers that you want because what business people want, are great, raving fan-type customers that will refer them to their friends and build up that corpus of people that just love the business and are advocates for it online. So you know, think like an app, just think about that for a moment. Think about all the apps that are communicating with you and then imagine the carpet store. Imagine the carpet store where you go in and you order the carpet and then it goes into this black hole and you don’t know when it’s coming in and when it’s gonna get delivered. Or even if they set a delivery date and you get busy and you forget that the delivery date is tomorrow at 10:00 AM. Imagine if they just sent you a notification by email or by text said, “Hey, reminder, this is Joe from a carpet store. We’re gonna be by there tomorrow at 10:00 AM. Here’s a picture of our delivery driver. He’s been with us for 14 years.” Just think about that for a moment. When it comes to your business, I don’t even care what business you’re in. So Neal is onto something with this think like an app content that he is delivering to business people.

And here’s how you can prove if you’re a raving fan. Have you recommended the podcast to one of your friends, neighbors, sisters, brothers, aunts, uncles? You should do so. And also if you’ve got feedback, I want your feedback. Come to my LinkedIn profile, George Leith on LinkedIn. Send me a message and we will connect and I love getting that intel from people that are listening to the Conquer Local podcast. My name is George Leith. I will see you when I see you.