I Made $21 Million in 120 Days To Show It's Not Luck

Alex Hormozi2 minutes read

Implementing an in-house sales team increased profit by $21.6 million in one quarter. Transitioning from outsourced "mercenaries" to an in-house team required restructuring compensation, improving processes, and focusing on training and development to enhance sales performance and growth potential.

Insights

  • Transitioning from an outsourced to an in-house sales team resulted in improved sales processes, including a detailed breakdown of conversion rates and steps to rebuild the compensation structure for better revenue sharing.
  • Implementing targeted training methods, adjusting messaging, and automating sales training led to increased show rates, improved closing calls, and a significant boost in sales volume, showcasing the effectiveness of strategic adjustments in the sales process.

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Recent questions

  • How did the implementation of a sales team impact the profit of a portfolio company?

    The implementation of a sales team in a portfolio company resulted in an additional $21.6 million in profit in just one quarter. This transition involved moving from zero to 40 sales representatives within 120 days. Initially, an outsourced sales team, referred to as mercenaries, was brought in to boost sales. However, issues such as a 20% revenue share, low conversion rates, and negative impact on business value led to the decision to transition to an in-house sales team.

  • What were the key steps involved in transitioning from an outsourced to an in-house sales team?

    The transition from an outsourced to an in-house sales team involved five key steps. The process began with hiring a sales director who possessed specific criteria such as experience, being metrics-driven, having the right demeanor, and utilizing effective recruitment strategies. It was crucial to rebuild the compensation structure after hiring the sales director to address previous issues with revenue sharing. The target was to keep sales costs below 10%, depending on whether leads were self-generated or provided by the marketing team.

  • How were compensation structures adjusted to improve sales performance after hiring an in-house sales director?

    After hiring an in-house sales director, the compensation structure was adjusted to address previous issues with revenue sharing. Compensation could be monetary or non-monetary, including recognition, perks, and status. Both Setters and Closers were compensated differently based on the rarity of their skills. Winners were rewarded more for higher performance, creating an incentive for increased sales productivity.

  • What strategies were implemented to improve show rates for scheduled calls and close calls?

    To improve show rates for scheduled calls and close calls, several strategies were implemented. Adjustments were made to messaging, booking times, and personalized reminders, resulting in a show-up rate for calls increasing to 91%. Incentives were aligned, prospects were qualified effectively, and prices were not revealed too early, leading to a scheduled close call rate of 94%. Daily training, gam tape reviews, one-on-one role plays, and end-of-day reports helped maintain a show rate of 94% for scheduled calls.

  • How did adjustments in the sales process lead to increased sales volume and higher closing rates?

    Adjustments in the sales process, such as adding a video sales letter between calls, role-playing common objections, and focusing on post-experience benefits in the sales script, resulted in a significant increase in sales volume and higher closing rates. By recruiting 40 sales representatives in 12 weeks through various methods and automating sales training with internal courses, the company maximized practice and minimized risk, emphasizing continuous improvement and role-playing to enhance sales performance.

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Summary

00:00

Boosting Profit: Transitioning to In-House Sales Team

  • $21.6 million extra profit added in one quarter by implementing a sales team in a portfolio company.
  • Transition from zero to 40 sales guys in 120 days.
  • Outsourced sales team, referred to as mercenaries, initially brought in to boost sales.
  • Issues with mercenaries: 20% revenue share, low conversion rates, and impact on business value.
  • Transition from outsourced to in-house sales team due to problems with mercenaries.
  • Sales funnel statistics: 100% scheduled for first call, 53% scheduled follow-up, 63% attended second call, 80% closed.
  • Detailed breakdown of sales process and conversion rates for a hypothetical 100 buyers.
  • Five steps to transition from outsourced to in-house sales team, starting with hiring a director.
  • Criteria for hiring a sales director: experience, metrics-driven, demeanor, and recruitment strategies.
  • Importance of rebuilding compensation structure after hiring in-house sales director to address previous issues with revenue sharing.

12:21

"Optimizing Sales Performance Through Strategic Compensation"

  • Target is sub 10% for sales, dependent on self-generated leads or leads from marketing team.
  • Consider the skills needed for the sales role and rarity of those skills to determine compensation.
  • Compensation can be monetary or non-monetary, including recognition, perks, and status.
  • Compensate both Setters and Closers, with different structures based on rarity of skills.
  • Winners win more in compensation, with increasing rewards for higher performance.
  • Show up rate for calls improved to 91% by adjusting messaging, booking times, and personalized reminders.
  • Scheduled close calls increased from 53% to 94% by aligning incentives, qualifying prospects, and not revealing prices too early.
  • Show rate for scheduled calls maintained at 94% through daily training, gam tape reviews, one-on-one role plays, and end-of-day reports.
  • Show rate improved to 87%, a 40% increase, through these training and tracking methods.
  • With improved processes, sales increased significantly, with potential for further growth.

24:51

"Enhanced Sales Process Boosts Closing Rates"

  • Added a video sales letter between calls to provide social proof and better understanding for customers.
  • Role-played common objections before calls and front-loaded obstacles in scripting to overcome objections effectively.
  • Focused on post-experience benefits rather than service features in the sales script.
  • Increased sales volume significantly by adjusting the sales process, resulting in a higher closing rate.
  • Recruited 40 sales reps in 12 weeks through various methods, including recruiters, content, and outbound strategies.
  • Automated sales training with internal courses to maximize practice and minimize risk, emphasizing role-playing and continuous improvement.
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