Calculate the Potential is the first step in our CLOSER System, and it’s the foundation for setting up enormous profitability and unprecedented growth.
It's about crunching the hard numbers to determine long-term success, and realizing the money being left on the table from inaction and shortcut execution.
The CLOSER System is irreducibly complex, meaning massive results in your sales can only be achieved if all the steps are present.
Just like how a three-legged stool can no longer stand if you remove one of the legs, the CLOSER System is a closed system that requires each sequential step in place and executed flawlessly to guarantee results.
There are no shortcuts. There are no easy solutions. There are only the tactics you need to execute in order to see hilariously profitable returns, and your willingness to take correct action, or not.
Fear of spending money is more powerful than investing money into exponential growth. It’s a natural gut-level response and it must be reversed for million dollar potential.
It's not easy to let go of that hard-earned cash, especially when you are unaware of the money you're losing by holding on to it.
Saving your money is actively losing you money.
A pond only grows stagnant when water ceases to flow in. Without money being infused into your marketing and comprehensive knowledge of your go-to prospects, so does your business.
It is the only fool-proof way to ensure your business doesn't remain deadlocked.
Otherwise, you might as well be watching your market progressively slip through your fingers, as well as all the capital that comes with it. What slips through your grasp becomes money earned by someone else.
Fear of investment comes from a lack of light on the precise math to demonstrate the indisputable value of pinpoint investment.
So, they just sit on every dollar they make, hoping their business will continue to grow from referrals and targeted advertisements.
You already know from experience that that’s not how it works.
These strategies are average, they are extremely hard to scale, and relying on them for long-term growth is essentially handing over the future of your company to shadows.
To make matters worse, this heavy focus on saving leads these business owners to go cheap, relying on scrappy growth hacks like LinkedIn automation widgets, budget email tools, and local marketing agencies that offer a surface scratch than a deep dive.
They are quick fixes that are incomplete and inadequate.
In fact, they are likely a big reason why your high-ticket business remains unmoving, and you find yourself having to scrape for leads from unreliable platforms to meet your goals.
Hoarding your money and using “get-rich-quick” solutions are costing your business money, and this tangible cash loss is what’s known as opportunity cost.
It's the cost of not capitalizing on your market like a superhero.
It's the cost of taking shortcuts and relying on losing tactics instead of rock-solid solutions, and it's what you sacrifice every time you choose not to invest in expansion and fueling the sales process.
In order to demonstrate the concept of opportunity cost "The Parable of Talents” illustrates your dilemma in concrete terms.
It's the story of three men who were given a varying amount of talents (currency) to use at their discretion.
The first man received one talent, the second five talents, and the third ten talents.
The first man hid his talent because he didn’t want people to discover it and take it from him. He was playing it safe.
The second man invested his five talents and accumulated five more talents with his investment. He was betting on himself and his choice paid off.
The third man invested his ten talents and collected ten more talents through his investment as well. This guy truly believed in his business and was rewarded big for that faith.
The master was pleased to find that the second and third men had invested their talents wisely and yielded such a great return. As for the first man--he produced no return due to fear and inaction--so the master took his only talent and gifted it to the man who invested his five talents.
His timidity resulted in a complete loss.
If you don't invest your talents, you can't expect to grow--and if you aren't growing, you'll eventually lose money, even if you've been saving it.
This inaction directly results in missed opportunities in the form of sales, and that's costing the sales team big.
A sophisticated business owner (one who invests ten talents to receive twenty) will look not only at the money they are making, but also at what they could be making, and what they are missing out on by following bad practices.
In order to calculate your opportunity cost, you have to take the amount of potential in-market buyers in your industry per month, and subtract the amount of prospects you are actively reaching per month.
Then, you take this number and multiply it by your average close rate.
Finally, you multiply that number by the average LFT (Lifetime Value) of the customer (How much money they are likely to spend as your customer).
You then take that number, and add it to the net market loss you occur from slow growth, and you get your complete opportunity cost.
This is the beginning of exiting the cave into the light of sales mastery.
The only way to lower this number is by investing what capital you have into marketing and increasing your market share.
It's not a cheap solution by any means, but the money spent will yield itself back with interest, and significantly more cash is gained from the market long-term because of it. You can double those talents through intelligent and scientific investment.
In this regard, it's less so about how much money you need to start investing, and more so about trying to minimize the amount you're missing out on as much and as soon as possible.
You want prospects who book calls 90% of the time or your time and money is wasted. No one wants to waste time.
For example, let’s say you are a high-ticket business that offers a service for $10,000 per month.
You take your capital and invest $10,000 into marketing and outreach, and through that you get 3 new leads that eventually become customers.
Over their lifetime, they each pay $10,000, so you net $20,000 profit that month, just because you decided to invest as opposed to saving.
This system is scientifically proven to produce results and scales extremely well.
It's time for you to start viewing investing in your growth as an opportunity as opposed to an expense.
The value of a dollar saved is less than the value of a dollar invested in growth because of the sheer profit you could be making if you had the right system in place.
Growth is the lifeblood of a business, and capital invested in expansion and market reach become fuel for a highly successful sales team.
Once you figure out your opportunity cost, the next step is to determine your probability of success.
You need to know, based on what you’re doing, how likely you are to succeed.
Following best practices, and making informed, data-driven decisions is the best way to ensure this entire process works out for you.
The process of figuring out this information is what we like to call “Probabilities and Equity.”
You can never be 100% sure of anything.
You can be 70% sure of some things and with the CLOSER System you can be nearly 90% sure of your sales potential.
There's a term known as "marginal adjustment," and it refers to the massive shift small, incremental changes can make when compounded together.
In terms of business, this can mean improving each step of your process by just a little bit.
Each step is a brick. Each brick supports the brick above it. Enough bricks become a wall.
Over time, these improvements will begin to add up, and your chances of success will increase dramatically.
Often, when making important decisions, rookie business owners will look only at net profit and what they stand to gain from the transaction.
This leads to poor and inconsistent results.
Instead, making these decisions based on your company's equity and future value increases cash flow.
Otherwise, you're going to fail in properly evaluating the probability of success in terms of investment return, which leads to a misunderstanding of profitable and beneficial opportunities.
We're going to teach you how to find the true value of your company so that you don’t make the mistake of basing these decisions on net profit alone.
As a business grows, new cash opportunities present themselves to founders and stakeholders.
Some owners choose to take on growth capital in exchange for ownership shares, and some decide to sell the business entirely and take a big pay day.
When this happens, it’s most common to value your business using your EBITDA.
EBITDA is Earnings Before Interest, Taxes, Depreciation, and Amortization, and is the metric used to evaluate a company's operating performance.
It can be seen as a proxy or cash flow during an evaluation of a company's worth (meaning a business's success can be measured by earnings, not just profit).
This number is the most accurate representation of your company’s worth.
In the event that you want to sell your company, the worth of that company to a buyer tends to be the EBITDA multiplied by an agreeable number that aligns with market comparisons.
If your business has an EBITDA of $1,000,000, but only a profit of $50,000 per year before taxes, you could still sell that business for 2x, 6x, or even as high as 16-20x that $1,000,000 (depending on your business model, industry, and most importantly, what someone is willing to pay for it).
Let us reiterate, if you build a business that generates $1,000,000 per year, even if you make zero net profit, you can still exit with a few million in take-home cash if you find a good buyer.
A business owner who only looks at net profit in this case will short their company’s value.
That's why doing the hard math, and looking at the big picture is crucial to your success in, not only outbound, but your business in general.
Tesla was able to make seemingly no profit in their first few years, and then suddenly explode to become one of the most profitable companies in the world.
Ignore your EBITDA at your own expense.
Be a monster in business and use that EBITDA like a ninja uses a katana.
Figure out your EBITDA, and always keep it in mind when making business related decisions, as well as making sure it's constantly updated and accurate so that you can best evaluate your company long into the future.
We can help you figure out the cash impact of proper outbound (at no charge).
Click here to take our quiz, and see if we’re a good fit for one another.
Now that you know what you’re missing out on, and what your company is worth, it’s time to figure out how much this process is going to cost you, and how much you stand to make in return.
This process is what we like to call “ROI & Growth Math.”
Math is the heartbeat of marketing.
It guides every decision, determines success or failure, defies opinion, and offers clarity in an otherwise confusing landscape.
You have to crunch the hard numbers before you do anything else.
Entering into a marketing or sales program without first knowing what you stand to gain is like starting to build a house without first knowing if you have enough raw materials and money to see the process through to the end.
Investing your money in marketing and market reach without establishing a clear path to a hyper-profitable unit case with real data behind it is nothing more than a gamble, and like gambling, those who play often lose.
You need to figure out how much this process is going to cost, how much you can expect to make, and whether or not this process is even worth putting time into in the first place.
It's time to start seeing the bigger picture.
These initiatives often take time to turn a profit, but if you can look out six, twelve, twenty-four months into the future, and understand the trajectory of today's actions in order to better understand the true return on your investment over time, that's how you win big... but how do you do this?
There are countless agencies out there ready to sell you on some type of mediocre marketing plan.
Few can calculate the projected return with you before working together.
Fewer still can calculate the math on a regular basis, and notify you if you aren't profitable with their program.
It's because of this that agencies have bad reputations.
This often leads many business owners to do the math on their own without any idea where to start.
You have to factor in every KPI (Key Performance Indicator) as well as use real up-to-date data to determine what constitutes a reasonable success probability.
There's many different factors to consider when calculating your ROI.
You're going to want to know how much it's going to cost to get your list of leads, and how much it's going to cost to gather information on them.
$3,500.00 per salesperson per month. Chew on that number for a second. That’s $42K per salesperson annually if you focus on in-house or second-rate solutions.
You're also going to want to know how likely you are to convert your leads into customers. If you can’t convert, you just tossed that cash in the trash. What is the average lifetime value of your customers?
After everything is said and done, are you still making a profit?
Don't stop there.
Once you get going, you need to make sure you keep this information up-to-date.
Use your actual experience and numbers to get a more accurate representation of how much this process is actually costing you.
This way, you'll always know if you need to be investing more, investing less, and how to continue moving forward.
Following our system, you're well on your way to becoming one of those outbound sales legends.
Remember, our CLOSER System has an “Irreducible Complexity,” meaning you cannot skip any step without risking the failure of the campaign as a whole.
Getting out of the cave is a challenge and now you know exactly why it’s time to get some sun.
The next essential step is designed to answer “Who?” We call it “Lead List Development.”
This is an irrefutable step to build a high-quality list of qualified leads, all with accurate and up-to-date contact information, so that you can begin reaching out and making massive sales.