AI For Sales - Recommendations For Growth And Pitfalls To Avoid With Dan McDade
We always hear about customer experience and employee experience. Yet, we rarely talk about the prospect experience. Before we can convert people to become our clients, we first need to convince them to come to us. But how can we do that if our prospect experience is non-existent? Dan McDade, the Managing Partner of Prospect-Experience, found this problem and is now helping many businesses create the perfect prospect experience. In this episode, he joins Chad Burmeister to share what he has learned through it all, sharing the biggest mistakes and pitfalls regarding sales and marketing. He also lends some recommendations for growth by letting us know the one thing you should do now to improve sales results. Plus, Dan then shares his thoughts about the future of AI in sales, what we can anticipate, and how to meet them better.
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AI For Sales - Recommendations For Growth And Pitfalls To Avoid With Dan McDade
I've got a special guest with me, someone that I've seen in Florida and a few other locations around the country over the last several years. Dan McDade, welcome to the show.
It’s great to be with you again.
If I'm not mistaken, you said PointClear has merged with another organization. Why don't you tell us a little bit about your role and take us through a little bit of the history? Where did PointClear come from? What are you focused on now? Then we'll get into some of the questions.
I founded PointClear many years ago and had an opportunity to see the clients and the employees of PointClear as they move to a new company. While I'm still doing some work with that company, I'm primarily working for a company called Prospect-Experience, it's Prospect-Experience.com. My passion has always been getting to the truth. I feel like the prospects are not well treated as customers are. We talk a lot about customer experience. You hear a lot about customer and employee experience. You don't hear a lot about prospect experience. I feel like prospects are called by pushy appointment setters. They are getting barraged with emails. In a lot of cases, you talk about being able to personalize at scale and that's been difficult for companies to do.
Finally, you get these low-level junior telemarketers reading from a script and none of that's working out well. If you start your prospect experience off with a bad taste in their mouth, it's going to be difficult to convert those prospects to clients. I'm all about doing the best job you can, which comes down to your company. It comes down to AI, but I'm all about doing the best thing you can do to have good prospect relationships, have a great prospect experience and move those prospects through the process to become customers.
There are post-sale customer success teams all over the world. Sales teams have had sales training to be able to do good discovery and good demos. I don't think it's fully taken yet, but at least there's an intention there. The perfect prospecting approach for the buyer is extremely interesting. That's a whole new area that hasn't been explored yet. What have you found so far in the prospect's experience? What do they not like and what do they like? Have you baked it down to those items yet or what can you share?
It sounds overly simple, but it isn't and that's persistence with professionalism. I can't tell you how many times in the last several years that I've heard a prospect say, “I’ve got a call from somebody and I got a follow-up email from them, but I was busy at that time. I couldn't take the call and I didn't reply to the email.” What I said to myself was that, that sounds interesting but they'll call back or they'll send me another email, but they don't. They're not very persistent. It goes against the grain. People think it's exactly the opposite of this, but people who were interested in buying something are appreciative when you're persistent.
One of my favorite stories with it that you heard in Florida and New York, is on the 42nd touch, we reached the CFO of one of the top 50 utilities in the country. This has been a few years ago. His voicemail back to us was, “Don't stop calling me. You're my conscience. I've been wanting to talk to you. I've been extremely busy.” On the 42nd touch, people would say, “If you call me 42 times, I never talk to you again.” In this particular case, it was 42 touches, it was a combination of calls, voicemails and emails over a period of time. We used to call it multi-touch, multi-cycle and multi-media marketing, now it's called cadence.
That cadence allowed us to build some awareness, some credibility and generate some interest in this individual's part. The moral of the story here, in this case, I closed months later for $1 billion for our client. That's an exception rather than the rule. People appreciate the persistence and professionalism. They don't want to be cheated or fooled into something. They want you to take a straightforward approach and be confident enough to call back several times so that you can have that conversation or send enough emails so that they reply to you to let you know when a good time is to talk.
If you start your prospect experience off with a bad taste, it's going to be very difficult to convert those prospects to clients.
It's interesting because I've been working on my personal branding. ChadBurmeister.com, I never thought was a big deal. I don't want to toot my own horn, and yet this marketer landed in my life a few and said, “You'd be surprised at the business value of doing that.” We created a landing page with a press release and, “Here are the 4 or 5 topics that I can speak on in podcasts.” My point is we do these video recordings with this guy named Garen, and I do it about once a month for 1 hour to 90 minutes, like this conversation now. His team goes in and pulls the excerpts of the intelligent parts of the conversation and puts them into 60 to 90-second messages out and post them through all of my social channels from Instagram to Facebook, Twitter and LinkedIn.
What we're now doing is there are about 35 of those already generated and we're putting them into a regular cadence on a monthly touch basis. Even with downgraded opportunities, “We reached out to you. At some point, check this out. We thought you might be interested in a 60-secondd video.” It gets people's wheels turning about prospecting. What if you could get 5X in email reply rates? What if you could use video messaging to get a 30% reply rate on your email? By being relevant, persistent and professional, it's not just hammering them with a page full of text, but rather a 60-second bite-sized chunks.
You talk about relevance. I get still 5 or 6 or 7 calls or emails per week to sell me lead generation services. If you took one look at my website, you probably would decide not to make that call. I know in the month of January 2020, I documented and I got 27 or 28 calls from the same company selling lead generation services. That's a big waste.
I had one and I did say, “Why don't you talk to our head of strategy and partners.” Occasionally, we find that a company doesn't have a good solution and then we boomerang those inbound calls into buying some of our technology. In many years at PointClear, now you're focused on the experience of the prospect. How did you originally come into this? If you go back to college, where did you go to school? What was your major? Did you know you'd be interested in this kind of work when you were in college?
The two surprising places people come from and ended up in marketing somehow or either as accountants, which I was an accountant, but that at the University of Maryland and NC State. Also, lawyers and I'm not a lawyer. It's interesting how many people end up in senior marketing positions and they come out of accounting or they come out of being an attorney. What I think was the magic for me was because I was a bean counter, I like the fact that it was precise. It was measurable and there was a lot of predictability. Even going back several years, that's a long time, I ran the most sophisticated data analysis team in the country. It was a company called Bear Creek Corporation.
We owned Harry and David, Jackson & Perkins and a number of other companies. My job was to do an analysis of huge data files to determine who to send catalogs to or who did who to market to. It was like a cost accountant’s dream. If you did this, we did A/B split testing and all segmentation, you would be able to predict results. At one point, we were owned by R. J. Reynolds and our job was to make a penny over a ten-year-period with a 15% hurdle rate. You can imagine how much fun that was as a marketer because you could delve way deep into data files. The fact that it was aligned with my background in accounting, I think is what had me ended up in marketing in general. Specifically, direct marketing and telesales or telemarketing are predictable. That makes it an interesting thing to do.
I watched a show on Netflix. It's timely and relevant. There are people from Google, Facebook and Twitter, and the guy who invented virtual reality with dreadlocks down to his feet. It talks about how much information is available and as a marketer, you can say, “I want someone with this political lean. They like this kind of music. They follow Elon Musk.” You can be so creative and your messaging can map a custom glove where I did a test for about $10 investment. There's a guy in the neighborhood who’s an ex-LAPD officer and he's not happy with some of the things that are going on around the country.
He wanted to see, “Could I reach other like-minded individuals who want to either contribute money or do something about the situation?” We did this test and for $10, we had 5 out of the 6 people who clicked through share the post on their Facebook to their followers. You can do the math and say, “If I can get 5 out of 6 it's $2 a share and how many people will then reshare it?” If you're the one creating this tidal wave of information, the rabbit hole goes deep on those. We talk about predictability. The counter-argument is, “What about privacy?” We're in an interesting pre-regulation like the internet didn't have a lot of regulation for a while. I suspect at some point there'll be a little more regulation.
As long as you're responsible about how you're using data, people don't seem to have a problem with these dudes. The idiots that misuse the data. Unfortunately, like anything else, there are few people out there that give you a bad name.
Thinking on that subject, where are you seeing AI, not just in sales, but in marketing? We talked about Facebook ads, the power of AI. I think a lot of people look at the letters A and I, and they think, “Evil, scary.” They don't realize that they're using it all day every day and it's being served up to them. When you type in Google, global climate change, they showed depending on where you're located or on your preferences, the next three words after that changed dramatically. AI is built into the Google search. What are you seeing in sales and marketing where it's being used? You may not even know that it's called AI on the backend.
That's a great place to start because a lot of people don't understand what AI is. As a matter of fact, I did a random search on AI or Artificial Intelligence for sales. I did the same searches for marketing. The first ten results that popped up talked about AI-powered this or AI-powered that and none of them are using AI. The way that they even describe what they're doing. It's humans programming things to accomplish certain tasks. It's automating these tasks, but it's not artificial intelligence. I sat in on an informative webinar and I thought this webinar did a good job of breaking AI into some segments.
There are five segments that I'll talk about briefly. One is everybody talks about Netflix on the recommendations. AI is used for making recommendations, facial recognition or what they call computer vision and surveillance. You see a tremendous future for that. The natural language processing, there's going to be all kinds of bots and other users using AI for that. A caveat there is that unfortunately, the bots in general, give up and go to, “Let me send you some information much sooner than a human would.” That's something that I've noticed that on a couple of client's sites where they're sophisticated marketers, but their bots are giving up too soon and that's because they have no place to go.
They go to either the person who's visiting says, “Send me some information,” or the bot runs out of questions to ask and says, “Why don't I send you some information to have somebody follow up with you?” In some of the robotic tasks, for example, I read an article in the Wall Street Journal that talked about that there was a couple of surgical procedures that are done by robots without any human intervention. You're going to see more of both the physical and cognitive side of the robotic tasks. The other side of that is sales reps spend very little overtime in selling because they're trying to fill up the CRM with the information that they're capturing. They're getting beat up by their sales manager for not using the CRM.
There are going to be tons and tons of work that an expensive sales rep doesn't need to be doing that they use artificial intelligence. The other thing is pattern recognition. The use of artificial intelligence to predict what human decisions would be made. A great example of that is I've got a friend who I was in a CEO group for about ten years and he was working on using artificial intelligence machine learning to replace pilots and airplanes, making a decision as to whether or not to fire the missile. Artificial intelligence or machine learning would make a decision and an accurate decision in about 1 to100th of the time that it would take the human to make the decision, which could make all the difference.
Those are areas where I see it being used and this is consistent with how I feel about almost everything. Let's flip things around a little bit. Let's start with, what do you want to accomplish, and then let's end up with how could AI help you get there? Specifically, there's a framework or a process for increasing results. It sounds simplistic, but if you think about this, it's accurate. There are four things that you can do to improve your results. One is, “How do you generate more opportunities?” When you know all about that because that's one of the businesses that you're in. If you're generating more opportunities, then the second thing is, “How can you increase conversion?”
The third thing is, “How can you increase deal size?” The fourth thing is, “How can you reduce the sales cycle?” If you take each of those four things and you start with any one of them, and then you start to back up to go to, “What are the solutions I need to accomplish that?” A lot of times, that will end up with an AI type of solution. One warning though for me is that if you're Netflix and you're making recommendations about what to watch or suggesting things to watch, I read someplace that they're saving something like $100 million a year in retention that they would've otherwise lost before they had this recommendation system. I may have that number wrong, but it's a powerful number.
If you're selling ERP that costs $1 million or something like that, then chances are there's not as much data, there's not as much to filter through and you need to be in touch human to human more frequently than AI solution might say. When people talk about personalization at scale or if you're again selling a $1 million piece of computer software, computer equipment, do you want to let a machine make those decisions for you, or do you want to have a human using their intuition to decide, “I'm going to invest fifteen touches with this prospect because it's worth it? I'm only going to invest five touches with this prospect because I've got this feeling that there's not enough going on, yet I'll check back in 3 or 6 months now?” There are people that would argue and say, “Machines can do that for you.” That's a long way away.
There's a company that I ran into. They reached out to me and it's called Bank. It's a personality profiling situation. I heard the CEO speak and she's been invited to major worldwide or global kinds of organizations. It almost makes you think, if you read the Bible or you're anywhere to do with religion, you think of the term speaking in tongues, and this bank philosophy says, “You're an AKNB or KNAB.” It'll tell you beyond a reasonable doubt what you are just like DISC, but they've taken this and put it into a format where you can leverage the information, whether you're sending an email or leaving a voicemail.
People appreciate persistence and professionalism. They don't want to be cheated or folded into something.
It puts that level of power. She studied this for 25 or 30 years. These companies and other people said, “Can you put that into an algorithm so I could use it when I'm speaking to somebody and I speak how they want to be spoken to? As you start to layer in those kinds of things, there are certain emails that I get that are one big, long stream of consciousness. You lose me in the first sentence.” I'm like, “I can't even read that. I'll forward it to someone who can take the top. It would take me like when I was a kid reading a book. It took me a long time to learn how to speed read and get through it.” I'll go, “Rich, can you read this? I'm not quite sure what this is trying to say.” If they had a bank technology that auto filtered and it knows, “Here's the general form, put it through the filter and rearrange the text and bullets or put a picture in there.” Think where this is headed.
Many years ago back before a more sophisticated type of analysis came along, the insurance companies or the car companies would use what they would call a decision tree. At the very top of a decision tree is it could be, for example, if you're selling gardening stuff because when I was out in the west coast, I was working for a company that had, a company that sold fruit and a company that sold gardening stuff. We use gardening stuff. The first decision under the decision tree was usually, “Do they own a home or do they not own?”
If they didn't own a home, they'd be thrown out because they wouldn't be considered as good a customer as the people that owned the home. If you went to the next level of multivariate regression analysis, you might say they own a home or they don't own a home, but if they own a home, then they go through a second level which is, “What's their income or what is the average value of an apartment that's in Downtown Atlanta?” You would eventually go down and it could be 30 or 40 variables. You can get granular with intent data now.
My point at all that is like with DISC or BANK, and also if you think about it with BANK, we'll take it a little bit out of context, but people who were behind a BANK for years. BANK doesn't work, never worked, never did work, never was a good way of evaluating a prospect because it's too simplistic. There's a lot more than, what would it be? Would it be 4 times or 3 times or 2 times or once? There are many different variables there are in the BANK analysis? I think there is more than that. There are more than 24 types of people out there. I'm a little bit of a contrarian. My first reaction against stuff in a black box is that I don't trust it until I get to know it a little bit better.
I think you and Chris Biel would have a similar idea. His vision is, “Your neurons can fire four million times in a night.” It's not 24. A human will recognize something and it could be something tiny. When you walked up into the house, you notice something that's over there. The AI wasn't programmed to catch that little thing. I often wonder about 2020 with all the shenanigans. Are some of the world's superpowers using AI too much already? Think of the internet that came out for the government way before it did for the general population. I suppose there are probably some deep levels of AI of, “Let's follow this because the algorithm tells us to do so.” That's a bad idea in certain cases.
You were talking about the shenanigans of 2020. I read the paper every day and I'm one of these old-fashioned people that get the Wall Street Journal delivered six days a week. I read it from cover to cover and it's easy to get depressed. Sometimes, I just flip back and forth between CNN and Fox to see the different perspectives. In the two articles I read that I think are telling him that because we were in a state of depression sometimes about where things are and how quickly we're going to be able to get out of it. Oracle had one of the best quarters ever, sales are up, earnings per share up, and then the other thing is the West Coast ports are overwhelmed and the trucking is getting overwhelmed. If you think about that the country has shut down and the country is on its heels and that kind of thing, there's a lot of good stuff going on out there. You've got to stay focused on those positives.
I want to ask two more questions before we close. If you were to recommend one thing, whether you're in sales and marketing to improve your results. There are some companies who've had depressed pipeline and in Q4, we got to make up for that. What's the one thing you would recommend to people?
If you want to go see this in action, you can go to Prospect-Experience.com, and 1 of the 12 prospect experience transformation processes is segmentation. Segmentation is important but it's nurturing. There's an article on nurturing on our blog that talks about the standard way of doing lead generation if you have 1000 prospects, you might end up with 50 leads at the end of a cycle. Whereas if you do a good job of nurturing, you could end up with over 150 leads and it doesn't cost you a lot more to do it that way. The number one thing is nurturing. It's intuitive to read the press and all the contents. Zeitgeist are talking about, “Stay with your customers, drive more revenue from your customers. That's the least expensive way of generating more revenue.”
You can overdo that and all of a sudden, your customer numbers start to spiral down and you haven't been out there prospecting. When you're prospecting, make sure that you're nurturing. Make sure that you're making that 2nd, 3rd and 4th touch cycle because people were human. If they're busy now and they're doing things that won't allow like for example, the CFO of the large utility, it happened to be down in Texas. He was closing the books during the quarter we were trying to contact them. He was ready to go. Figure out, “Are you nurturing effectively?” If you go to Prospect-Experience.com and look at the Twelve Point Transformation Process, one of them is nurturing and there's a lot of good detail about how to do a good job of nurturing.
We have a customer with 40% reduction in staff, including their three BDRs globally. They said, “We're focused on customers.” I said, “What if you could have a passive prospecting channel that's highly unique?” They said, “Let's keep the lights on. If that's only going to cost us $15,000 to $20,000, we might as well go after some whales during that time.” They bought the product and 120 days later, they still haven't deployed it. It's good intentions but they didn't quite follow through on that philosophy. What about the biggest mistake? If nurture is the biggest win, what can people avoid in these times?
Companies tend to prospect too broadly. They don't do a good job of segmenting the total addressable market. Running tests, you talk about agile marketing and making a series of small bets. Segmentation is on the website too. My recommendation is a simplistic one. Let’s say for example, there were 1,000 prospects in your universe and you broke those down into ten groups of 100. You might intuitively rank them based on what you already know, but then you sample maybe 60% or 70% from the top half and 30% from the bottom half and validate that you've selected correctly. What will happen is that you'll find out in your analysis that you shouldn't be prospecting to 1,000 companies.
You probably should be prospecting to maybe 700 or 800 of them. That's a real simplistic example of segmentation. Companies tend to prospect too broadly. They're going after for the shotgun approach. You've heard this and you've read it for years as opposed to a rifle approach and that's costing a lot of money. The other thing is database cleanup programs. You can't afford to clean up all of your databases and you'll probably go broke or lose your job if you try to do that. How can you segment the database down to determine whether the 20% or 30% or 40% of the records are going to generate 80% or 90% of the results?
How can people reach you? Prospect-Experience sounds like a good place to start. What would be the best way for our audience to get in touch with you?
The easiest thing is my email address, which is Dan.McDade@Prospect-Experience.com.
Dan, it's been great catching up with you. I appreciate the input and feedback. I'm running through the knobs in my own head going, “Have we made some of the right decisions and pivots?” We'll be able to use some of this conversation to another strategy.
I'm always happy to talk to anybody at any time, even if there's not a business and it’s for me. If I can help anybody out there in the audience, feel free to contact me.
Thank you, Dan. Thank you, everybody, for joining. We'll catch you next time.