Eight years ago, I started a tech company in Silicon Valley without an email address or computer and bootstrapped it to over $20 million. And I did it without a penny of outside funding.

If I can do it…anyone can…

To say that my journey is unique is a huge understatement. I didn’t go to an Ivy League school; in fact, I dropped out of college. I didn’t get funded by a VC; instead, I bootstrapped my way along on credit cards and home equity lines of credit. Growing up on a hippy commune, I didn’t have many examples of what it meant to be an entrepreneur. We had no electricity, internet, or televisions and the only entrepreneurs I knew were in let’s just say, “farmers.”

How did I do it?

Here, I’d like to share three powerful lessons I learned the hard way in the hopes that you don’t have to make all the same mistakes that I did.

Lesson 1: Do More With Less

In this lesson you will learn:

• How to focus on the customers that have the most pervasive and urgent need
• The importance of a top 10 and bottom 10 analysis
• Mo’ money = mo’ problems

My Story:

My partners and I were running a marketplace for local services called Calfinder that –with a bit of tenacity, the ability to tap an untapped market and perhaps even luck – we were able to grow to about three million in sales. (More on how we did this in Lesson 2). But eventually, we found ourselves stuck. You see, like many entrepreneurs, we were incredibly ambitious and wanted to continue growing as fast as we could – our goal was doubling revenue each year. I wondered what we would have to do to accomplish this and was feeling deflated.

At that time we were still struggling to hire the right salespeople – we were generally hiring about three people to find every one top performer. Running the numbers I saw that in order to accomplish our goals we were going to have to triple our sales team. But I had to find a way to accelerate the process. I started digging through our customer list and saw two of the companies in our top ten were spending almost ten times what the average customer was spending. I knew I was on to something…

Then I hired a freelancer through Elance to research both our top- and bottom-performing companies to gather other attributes on them like:

• how many counties they covered
• how long their website had been up
• what our entry point had been into the account

When I got the spreadsheet back I sat down (with some beers) to analyze it and found that there were a few key attributes shared by these exceptionally profitable customers. I then built a list of 100 more companies that matched this same criteria. After building the list, I designed a coordinated campaign to hit them from all sides – phone calls, emails and attention-getting gifts sent in the mail. Then I executed on my plan – sending out the mail pieces each week and ensuring that each of our 100 prospects got a follow up phone call. To my surprise—absolutely nothing happened during the first four weeks of my brilliant campaign.

As I sunk back in my chair (with another beer) to doubt myself even more, it happened. My phone rang and it was the CEO of a multi-billion dollar company. He said…”ok, you’ve got my attention, how can you help me?” The next week I got another call and then another one the week after that.

Four months later, we had signed up over $2 million in contracts and after tallying up our total spend, it cost us around $2,000 and we didn’t have to hire a single new salesperson.

What I Learned:

It’s not only the power of hustle to get results, but the incredible power of doing less, but with focus. If we were flush with VC cash the odds are that we wouldn’t have been as creative or willing to put our foot on the gas. Or, we would have been doing so many things at once, we would have given up a lot sooner before seeing any results. Focus.

The Takeaways for YOU:

• If you’re just starting out, pick a market with the most urgent, pervasive and costly problem that you can solve.
• If you’re already running, take a step back in order to take a huge step forward.  Analyzing the attributes of your top and bottom ten customers; then look for 100 more that match the criteria of your top ten and pursue them with all that you’ve got. Read more on this in my post: “The 80/20 Rule.”
• Once you’ve identified your prospects, be relentless about contacting them; but be creative and smart, too. Read more on this in my post: “Stop Pitching.”

Lesson 2: Make the System the Hero

In this lesson you will learn:

• A better playbook = faster growth
• Document everything that you do more than twice
• The importance of iterating weekly

My Story:

When we came up with the concept for Calfinder – a marketplace to connect homeowners with local service professionals – we didn’t know how to build a website, use software or even spreadsheets. In order to test the business model, four of us wrote down a script on yellow note pads and went around to houses asking people if they would want to get free quotes on household projects. To our surprise, when we all met up at Starbucks at the end of the day we had collected 10 leads!

The next day we wrote another script, this time geared to service professionals, then looked in the Yellow Pages to find contractors with the biggest ads to see if they’d be willing to pay to get connected to the homeowners we identified. We set up three appointments for the following day. We asked the contractors how much they’d be willing to pay for leads – the names and phone numbers of the people we knew wanted work done. The first one said “$80,” we literally made a photocopy of the yellow piece of paper and sold it to them on the spot. A company was born.

We took the money, refined our script and hired college kids from the local campus to knock on doors for us over the next weekend – that brought in 30 more leads.

We repeated this process, continually refining the script and process for months, all while documenting everything in the system, testing it and iterating on it every single week.

Over the years this helped us to go from 0 to 50 salespeople and run a highly organized company with a relatively small staff.

What I Learned:

I’ve never forgotten that hustle and documentation go hand in hand and build upon each other to create momentum. I’ve taken this process with me to every company I’ve started and every company that I advise and invest in.

The Takeaways for YOU:

• Your playbook is one of the most important things you will create as a startup
• Document everything you do more than twice
• Review weekly to start, then start reviewing monthly

Lesson 3: Let Data Drive Decisions

In this lesson you will learn:

• Why you should let data drive decisions
• How to manage by the numbers
• How to remove ego from decision making

My Story:

We were up to a 50 person sales team at Calfinder and closing four times the number of deals than we were before…but…when I looked at the data for previous 6 months I saw that we had actually lost $1 million ramping up the team and though the deal volume had increased sharply, we hadn’t seen any boost in profits. In fact, churn had increased significantly which meant that the lifetime value of our customers was cut in half.

We were on a very rough road; one that called for a serious correction.

Again, we dug into the numbers looking at churn by rep, average deal size and customer happiness, as measured by repeat business.

We found six salespeople that were profitable and in order to save the business from going under we made one of the most difficult decisions of my career – letting go 42 salespeople (84% of our sales force!) and going back to the drawing board.

Sometimes difficult decisions pay off. After our layoffs we focused on the specific, measurable things that made these six salespeople so successful. We looked at every attribute and approached it like a science. And we found some very interesting similarities in terms of:

• where they came from
• the approach they took
• the specific customer segments they were going after

We then emulated everything they were doing and cut out a lot of what we “thought” made for a successful salesperson, instead only focusing on what the data told us.

Over the next 12 months we grew revenue by over 50% with a team of 6 and eventually, Calfinder grew to become a $20 million business. Did I mention we started with nothing?

What I Learned:

Less is more when you’ve figured out what works the best. Just do that and forget about the rest of it.

The Takeaways for YOU:

• Don’t let the highest paid person in the room make decisions that aren’t supported by data
• Don’t let your ego get in the way of doing what needs to be done
• Don’t try to scale until you really have a good understanding of the metrics that lead to success

Do you have any of your own stories of how bootstrapping sales worked for you? Tell us about it here, or ask me a question about any of it below.

You know the process of evolution for most new companies: they incubate, where they discover what they are and who they’re for (which may not be the same as what they thought); then they accelerate, which is where they validate their reason for being through actual customer feedback; and then if all goes well in these two phases, they’re ready to scale, or grow, and reap the fruits of their labor and maybe eventually get acquired. But there’s another crucial phase that occurs in which you build upon the knowledge you’ve already gained from incubating and accelerating—but before you actually scale—and we call it:  the Upshift Phase.

The Upshift phase comes down to one essential factor that’s crucial to get right: customer creation. Without customers, you can’t build anything. When you figure out what it takes to get customers then you can figure out how to get more of them. Only then, can you scale your business. This phase can take companies 12-18 months, and cost between $750,000 and $1.5 million, before they “figure it out.”  It takes a lot of trial and error, but it’s worth the time and money spent if you want to have a viable enterprise. However, with proper guidance and support, the time frame of the Upshift phase can be condensed considerably.

How do you know if you’re ready to enter the Upshift Phase?

The benchmarks we use to determine if a company is ready for the Upshift phase are:

• The founder has been doing most of the selling and has been able to acquire 10 + paying customers thus far.
•  The founder recognizes there is still work to be done and estimates a minimum of 6-8 months “runway” time to ramp up sales efforts before scaling.
• The company’s current lead gen efforts are bringing in a minimum of 20+ inbound requests per month.

What defines the Upshift phase?

There are several important markers a company should achieve during the Upshift phase. It all comes down to systems and processes including:

1. A repeatable lead generation process

In my post on the 80/20 rule, I talk about how to identify your best customers by narrowing down the ones that are the most profitable, and that get the most value out of what you are trying to sell. Model those customers and figure out how to get more of them using different sales tactics – try some of the ones I’ve outlined in my post, Stop Pitching.

2. Objective and measurable sales process

In my post on the sales cycle, I talk about persistence and creativity as key to getting more customers that are similar to those you’ve identified as the best. But you have to test and quantify the results of every tactic you use to find out which are most successful. You can’t shoot in the dark and hope to win each time. Take the time to be methodical about it and gradually you’ll see some trends start to develop.

3. Ability to onboard and get sales people to trend towards quota

Once you figure out what tactics work for enticing new customers, you need to implement a process for training your team to implement that process. This can involve written manuals, phone or webinar training, or offsite functions that focus on nothing but your sales process. Give them what they need to do the best job for you.

4. Refined messaging

Building a business takes constant evolution. You are never done learning, refining and improving. As you bring new sales people on, constantly monitor and refine your sales messages. Stay current with the times, the marketplace and with changes in your technology or how you evolve your brand or product. See what your competitors are doing and adjust accordingly. Make updates to your product whenever necessary and make sure your messaging reflects these.

5. Lifetime value equal to or greater than 2x the cost of acquiring a customer

Many startup companies make the mistake of taking on any and all customers. This can be a mistake as sometimes a customer is just not worth the effort. You need to make sure your customers bring a positive lifetime value, not just immediate gain or numbers. There is an actual formula I use to test which customers will make the cut – they need to have a projected LTV of two times the cost of acquiring them. Otherwise you are just wasting your money.

6. Payback period relative to cost of acquiring

While LTV is important, you shouldn’t have to wait a lifetime to realize value from your customers. Companies move fast and they die fast, so you need to have a realistic payback period in which to see the returns from your customers, usually within 12 months of acquiring them. If you have any customers who are costing you more in time, complaint management, refunds or make goods, you might be better off firing them. There are other forms of payback that should be considered if financial benefit is not readily apparent. Ask your customers if they would refer you to their colleagues or supply testimonials to use on your website or in your sales materials. If they help you get new customers, they may be worth hanging on to and keeping happy.

Okay, now I’m ready to Upshift. How can I ensure my sales process is up to snuff?

Upshifting is about being prepared to scale so the question now is, what do you need to have in place in order to scale properly? There are two options companies usually take to accomplish this.

Option 1:  Hire a VP of Sales

This is usually the fall-back position for many startups who are ready to upshift. Personally, I went through four Sales VP’s until I found the right fit. So it’s not as easy a solution as it sounds.  This article  by Jason Lemkin breaks down the types of sales people you may come across during the hiring process and how to make sure you find the right one for your company based on their personality type, and also if they have the right skills for your particular kind of product.

Option 2:  Do it Yourself

This option could potentially be worse than hiring the wrong Sales VP in that a) you couldn’t figure it out in time and missed opportunities, or b) neglected the operations part of your business and something went terribly wrong, or c) you scaled prematurely.

In this Forbes article, Nathan Furr defines premature scaling as “spending money beyond the essentials on growing the business (e.g., hiring sales personnel, expensive marketing, perfecting the product, leasing offices, etc.) before nailing the product/market fit.” He cautions against “spending money scaling the business before you have really nailed what customers want and how to reach them.”

This is the biggest failure zone for startups because you only have a limited amount of time in which to create a repeatable process and without a roadmap or guidance, many companies make these common mistakes. This is why the Upshift phase is so important and why I’ve turned my professional pursuits to making sure you succeed by avoiding them.

Here are some metrics we recommend SasS businesses meet in order to know they’re ready to scale. Until then, they need to focus on building a repeatable and measurable model for sales success.

• Half of their sales reps are meeting their quota
• Their SaaS reps are trending towards $300,000k in ARR (annual recurring revenue). This can be scaled up or down dependent on the average monthly recurring value of each customer.
• They can onboard 2-4 sales people at one time with relative ease and measure their results.

What happens after the Upshift Phase?

You scale. Now that you have the tools, knowledge, confidence and support that you were lacking prior to the Upshift phase, you can build your company. You’ve figured out the recipe for your business and are ready to hire more people to cook it.

We created Upshift Partners to help accelerate the trial and error and preparation it takes to get to this point, and we expedite the process so that it takes 12 weeks instead of 12 months. To find out if you’re ready to Upshift, learn more at our website or send us an email.

Please add your comments or questions about the Upshift phase for me below, I’ll do my best to answer them here or in a future blog post.

 If you’ve been following my posts here on the Upshift blog, you know that: 1) I posted a detailed guide giving away my trade “secrets” for succeeding as a bootstrapped business, and 2) it was so well received that I decided to go into more detail on the points presented in response to your comments. You can read my first deep dive on the 80/20 rule which addresses many of your questions about how to identify your best customers and create more of them. Here, I’ll be focusing on your questions about how to get new customers without ever doing a sales pitch again. (Okay, I’ll admit, that’s a “buzz” term my marketing folks want me to use to get your attention. I don’t necessarily think there’s anything wrong with a “sales pitch,” it’s just that so many of them suck that it’s given the whole concept a bad rap. So for the purposes of this post, forget about pitching.)

How did you grown your business from $2,000 to $2,000,000 in sales in just four months without pitching your product?

I provide great detail into how I accomplished this in my first post in this series, the Bootstrappers Guide. Here, I’ll tell you that I had a lot of doors slammed in my face along the way. Like I said, the idea of a “sales pitch” has a bad connotation. What I’m proposing, simply put, is, rather than go in with your sales pitch, offer something of value before asking something from the other person. Interesting idea, huh? Just a slight reorientation of your intention can shifts the dynamic a little bit, hopefully a lot. We hear sales pitches everywhere we go, and we get immune to them. We cringe at the sound of anything resembling a “pitch.”

Don’t get me wrong, the entrepreneurs out here in Silicon Valley are selling the vision for their companies to the VC’s on Sandhill Road every day and raising millions of dollars in the process. Are they doing it with a sales pitch? Maybe. But I’ve seen that the ones that are getting money are the ones that are educating and solving problems, not selling.

The Takeaway: Don’t pitch your company/product/idea; rather educate your prospect. Discover their pain point and tell them how your company/product/idea can help.

It can be so demoralizing when you gear up for a big pitch and don’t get the business. Any tips on how to handle this and keep knocking on the doors?

Doors will get slammed in your face. I know, I literally had my nose pressed to thousands of them when I went door-to-door over a series of summers while building my first business. You need to develop a thick skin. Those entrepreneurs that develop that skin and keep going are the ones that have built really successful businesses. If you can walk around and get used to doors being slammed in your face, congratulations, you’re an entrepreneur!

In more practical terms, if you spend one-half hour with a customer and don’t close the sale, ask yourself:

• Have you educated someone about your industry or product?
• Have you helped them in some way?
• Have you left an impression?
• Have you built trust and respect?
• Have you made a connection that could potentially call you in six months, should their circumstances change?

The takeaway: If you can walk away from a meeting believing that you’ve accomplished at least one of these points, it wasn’t an unsuccessful sales meeting. Develop thick skin.

I find it hard to work on pitching my business or raising funds when I’m still ironing out our product and dealing with the day-to-day issues that come up. Can I delegate this to someone else?

It depends on what stage your company is in. For early stage companies, you as the founder absolutely should be involved in the marketing and sales of your company. You need to hear firsthand the feedback that’s coming in on what you’re putting out there so you can work to make improvements.

There are other things that you can find others to do, like operational tasks. Find someone you trust to handle opps and focus your energy on how to get customers.

The takeaway: No matter how great your product or idea is, you won’t go anywhere with it if you don’t get yourself some customers.

In your Bootstrapping Guide, you talk about continually following up with prospects with calls and gifts every week. How adamant are you about these “stalker” tactics?

Pretty adamant. That’s because I’ve seen the payoff. There’s a fine line between being persistent and being an asshole that no one wants to talk to. Obviously, I’m recommending the former. By repeatedly sending key prospects something funny or clever, eventually they realize you’re serious. So even though nothing might typically happen the first few times, it’s that one golden moment when the CEO of a prospect company calls and says, “Okay, you’ve got my attention, what can you do to help me? — that makes it all worth it.

The takeaway: Calling and pestering doesn’t accomplish anything. But if you really think about how to stand out when you’re making those calls, then you’ll get noticed.

Okay, so if I’m going to be a stalker, do you recommend a specific time of day or week or days to reach a contact by phone, email, social media?

Companies have to discover this for themselves, but what’s key here is that most entrepreneurs don’t take the time to try different tactics and track what’s working. An early stage company, in particular, should be reaching out to prospects at different times of the day, and different days of the week, and measuring the success rates of each tactic. The results might be one thing for a healthcare company versus a SAS company or a BtoC company, so try different things and see what works the best.

A later-stage company should have a more sophisticated CRM tool in place that records the highest response rates for email, phone calls, etc.

The takeaway: Take a step back, look at your results, see which 20% is working best (see more about this in my post on the 80/20 rule), and then refine your strategy.

Can you share some examples of offers that have worked for you in the past?

Again, what worked for me may not be exactly what works for you. But I’ll tell you what we did for my marketing consulting company that brought in new business.

We sent prospects:

• A $2 bill

With the tag line: This $2 bill is magical; it multiplies when you spend it on generating more traffic to your website.

And the solution: Let us prove it to you.

• A sticky hand

With the tag line:  Are you concerned that your marketing programs aren’t sticky enough?

And the solution: Call us we’ve got some great glue!

• A flying pig figurine

With the tag line: The only time your conversion rate will increase is when pigs fly.

And the solution: Unless you call us!

• A pen with a flashlight –

With the tag line: Do you feel in the dark about how your marketing results are going?

And the solution: Give us a call; we’ll help shine a light.

There were a lot more but you get the idea. We sent one of these little gifts in succession every week; some funny, some compelling, but always with a message that showed we were serious.

The takeaway: In all of these cases, the key was to think about the pain point they have and how our service addressed it, but in a fun and clever way. (Okay, maybe cheesy in some cases you might think, but it worked.) Think about what will work for your business.

So, why are you giving away all of your trade secrets?

I’ve done this already; I’ve built my businesses and I wish that someone had given me this kind of advice when I was coming up. I’m not saying my process is the be all and end all; just that it worked for me. There are lots of ideas out there but what makes the best ones rise to the top is testing and execution. I like to drill it all down into a step-by-step process, learn what works and what doesn’t, and try to adopt the things that work. A lot of this basic information was missing when I was started out; I sincerely want to help others avoid the same mistakes I made.

It’s important that new ideas get out there. That’s what my current company, Upshift Partners, is all about. We at Upshift want to see companies succeed; we want to see entrepreneurship thrive. Our core mission is to help increase the success rate of startups. And to do this, we are continually learning, uncovering new concepts and ideas that help the companies we incubate. We’re out there trying to improve our program and learn from the companies we work with so we can help them and others succeed. So I guess that’s why I’m really doing this.

What else would you like to know about the sales pitch or any other part of the startup process? Leave a comment below and I’ll either get back to you here, or address it in an upcoming post.

Back in April, I posted here about my experiences hustling, eh building, my online directory software company from $2,000 to $2,000,000 in sales in just four months. I knew it would be a challenge—distilling all of my hard-earned wisdom into just a few hundred (okay, thousand!) words—not building the company—although that was a challenge too, but of an entirely different sort. So I broke down my process into easily digestible steps that anyone can follow when it comes to selling just about anything. And you responded. So I thought it would be helpful to hone in on some of the steps I covered in my last post, based on your questions, comments, and just stalking me in the street to find out more. This post will cover the 80/20 rule; my next post will cover sales pitches (and why you should never do them). To summarize:

1. Selling is bad. Educating is good.
2. Figure out who your best customers are and then find more of them.
3. Be prepared to do a lot of research, or hire someone to do it for you.
4. Be persistent, not just in your vision but in your tactics. There’s a difference.
5. Knock on doors—literally and figuratively—to make the sale.
6. Get used to doors being slammed in your face—congratulations, now you’re an entrepreneur!

So to dig a little deeper into your questions and concerns, I’ve selected some representative comments here. It helps a lot if you read my first post, but I’ll try not to make too many references that seem out of left field. Oh go ahead, read my first post. I’ll wait…

 1.   I like your breakdown of the 80/20 rule, but it seems my 20 in each category is a tough nut to crack. Is it really that important to identify the 20% of your business that’s working? Is it really that scientific? Yes, it’s scientific. Yes, it’s important. But it doesn’t necessarily have to be an 80/20 ratio. In every company that I’ve run or worked with, there’s always been a minority percentage that accounts for biggest impact on revenue and I believe the 80/20 rule applies across all types of companies, generally speaking. It could be 90/10, it could be 70/30 but the idea is essentially the same. In a sales organization, for example, it’s likely that 20% of the team produces 80% of the sales. The same holds true for marketing, where 20% of your marketing brings in 80% of your new customers. The learning here is: don’t always focus on everything, but on the most important things. It may not be 80/20 every time, but the practice of going through and evaluating what you’re doing can help you to realize where you should be spending your energy. Find that 20% that’s working.

2. Okay, once you identify your 20%, how can you replicate them? It all comes down to attributes. Taking a broad view, if 20 % of your sales target is performing the best, there is likely a group of characteristics—like how old they are, where they’re from, what school they went to—all this can prove predictive of the next group with these attributes being successful. It works the same for customers. Find the percentage, whether it’s 10, 20 or 30, that account for your lion’s share of revenue, then look at the attributes of those people. It may sound simple, but many businesses typically don’t do it. I’ll say it again: find the ones that account for the most revenue; then figure out the attributes they have in common.

3. What if you’re just starting out and you don’t have enough for a representative sample of 20% success? Take your best guess. Ask yourself

• Who are the people most likely to need my product?
• What is the biggest problem they have?
• Where are they spending the most money to fill a need?

Try testing different things to find out what or who are your best performers. For example, if you sell HR software, ask yourself what companies have the biggest problems that your software addresses? Who are the companies with the highest turnover or who are hiring the most people?  Then ask yourself, how old are these companies? It may be that the more up and coming businesses need what you offer. Take your best guess and try to narrow your focus. You may start out going after everyone, but eventually you’ll need to look at your numbers to make concrete decisions as to what’s working the best.

4. No, I mean we’re really starting out. We’d be happy to have 20 customers, let alone the figure out who the best 20 are. If you are hell bent on an idea for a company, then you have something you feel people want.  And you must have some idea of who it’s for; you had to cover that in your business plan. My advice to you is, be careful as you expand. Taking on everyone who says “yes” to your product might not be the smartest strategy in the long term. After the seed phase, you need to go back and refocus before putting any more money into growing your company. You may have signed up only15 customers but if 10 of them aren’t good leads, you’re better off finding more of the 5 who are. Identify what makes the 5 good, and set out to find more of them. Even if it means you have to fire a customer. This is especially true for early stage companies, when you are moving really quickly. If a customer just turns out to be a big drain and isn’t giving you good feedback, move on. Just like in life relationships!

5. Do you have to have your 80/20 strategy in place along with production and operations from the outset? In the beginning, of course, you have to build the product you think people want but you also have to find the people who want it, who are willing to give you their money and who you’d like to keep as customers. These are the two components I see a lot of new entrepreneurs not putting enough focus on and it could be the deciding factor of what could makes or breaks your company. I hope this answers your questions about the 80/20 rule discussed in my last post, but if you still have anything that’s eating at you, leave a comment below. And please, shoot me some ideas for what else you’d like to see me address in coming posts, I’m here for you!

Call me a streamlining savant or a financial alchemist, but when it comes down to it, let’s get real: I’m a hustler. Plain and simple.

I started my most recent company six years ago with four yellow notepads and four pens. We didn’t have a Rolodex of business contacts. Heck, we didn’t even have a computer. But it didn’t matter – what we lacked in experience and money we more than made up for in cojones. Our dream was to start a marketplace that would connect homeowners with contractors who would compete for work. But we weren’t even sure there was a market for it. So we started knocking on doors.

That isn’t a metaphor. We literally knocked on hundreds of doors in Marin County asking people if they needed work done to their houses, and if so, how much they would pay. On our first day we got 10 leads, and the second day 10 more. We looked in the Yellow Pages and shopped around those leads with contractors. Three contractors bought the same leads on the spot for $80 apiece — and there was our seed funding. We were off to the races with no website or even a name for the company. Today, Home Improvement Leads is on track to top $25 million in sales without ever having taken a cent of outside investment.

Scaling a sales-driven business isn’t easy, and — here’s the kicker — it doesn’t come naturally to a lot of company founders. But I learned the ropes, and over time I’ve developed the strategies, processes and tactics that are key to accelerated sales growth hacking techniques. I’ve also found through the experience of consulting with other start-ups that this can be replicated with a wide variety of business models.

In the most general sense, the most effective way to grow our company is to focus on things that produce the most substantial results for the least cost. It’s a tactic that we used to land some Fortune 500 clients when we were an an anonymous start-up without PR power, incubator funding, or bigwig connections.

Here’s how you can do the same for your business.

Step 1: Profiling

You likely already know about the 80/20 model as it applies to business. But as a refresher:
● 80% of your profits come from 20% of your customers
● 80% of your complaints come from 20% of your customers
● 80% of your profits come from 20% of your time spent
● 80% of your sales come from 20% of your products
● 80% of your sales are made by 20% of your sales staff

It’s pretty easy to deduce that your energies should be focused on catering to your most receptive target (read: the active 20%). This is where a founders energy is best spent. Lower performing customers, products or staff should be addressed cautiously.

For example: We had over 30 categories that we sold into. Awesome. But was it really worth it to be selling to a mom and pop business in rural Iowa? We took a hard look at what was really happening with our categories, territories, products, audience and team, and what we found dramatically improved profitability and cut out hundreds of wasted hours.

Here’s how we approached the project:

1. We took a sample of our top 100 clients and looked at:

● Years the company’s been in business
● Total revenue
● Location (ideally narrowed down to metropolitan location or even neighborhood)
● Industry

Then, we broke it all down into a spreadsheet. Even if Excel terrifies you, some simple tracking can help visually spotlight patterns you’d never thought of in the past.

2. We identified prime targets:
Drink caffeine (and potentially some beers) and spend the time to really dig into this next bit.

It’s OK, I’ll wait.

We found that an an abnormally large amount of revenue was coming from customers who were in one of the 25 largest metropolitan statistical areas (also known as MSA), and a very small amount of revenue was coming in from those that weren’t. I know this may sound obvious to many of you, but after years of heads-down hustling it’s easy to get caught up and not take time to really dig into these things. This means that, strategically speaking, we should have been targeting cities with high population density and close economic ties – places like Washington D.C. rather than Washington, Kansas (no offense, Kansas).

Note that the biggest MSAs were our best targets — but they might not be your best targets. It depends on your business. Regardless, if you’re curious to know the top MSAs in the U.S., this list is here. There are no real surprises (oh, hi, New York, L.A., Denver, Miami…), but it’s something to keep in the back of your head when reviewing your spreadsheets.

3. We extracted the secret sauce:
You’ve identified the 20% of customers that are accounting for the bulk of your revenue for a reason. That reason is to take a look at what they all have in common and determine the predictive factors of what makes a customer likely to spend more than others – the secret sauce.

In our case, those customers were window replacement contractors who covered at least ten counties, who had revenues of over $500 million, and who had been in business for over five years. Pretty darn specific. But essentially these were our marquee accounts. Some were even Fortune 250 companies. Once we unlocked the formula we just had to figure out a way to attack more customers with the same profile.

Note: if you’re targeting consumers, this model still applies. Just swap in factors like age, homeownership status, gender, race, or income instead of industry.

Take Away:
• Most people grasp the idea of the 80/20 rule but don’t actually profile the 20% of their customers that spend 80% of revenue. Consequently, they don’t have a structured way to prioritize getting more of those customers while de-prioritizing the ones that really don’t make much difference. The trick is finding these higher value customers and developing a strategy to replicate them.
• Then, you need to take time to really understand what makes them outliers by profiling them and also understanding who makes the decision.

Step 2: Find more of these customers!

We were focused on B2B sales, but the same tactics be adapted if your customers are consumers. Learning how to discover more of your ideal customers is an important step, but don’t get too hung up if you can’t find everything you want to know. You might start to see some trends even in very simple sets of information.

Here’s how we approached this from a B2B angle:

1. We built the list with borderline stalkerish tactics
First, we signed up for a free 30-day trial from Hoovers to access business records. We’d search for the names of the companies we wanted to work with, find the NAICS code (a coding system the government uses to classify businesses) they were listed under, then refine by company size and location (or any other criteria we found were predictive of their ability to be a large spender with us). That’s how we found similar companies with the same NAICS code.

Here are the steps we went through
A. 1. Got a 30 day Hoovers Trial
B. 2. Entered 5-10 names of companies that we identified as “dream customers” to see how they were categorized
C. 3. Found their NAICS codes so that we could expand our list
D. 4. Refined list by revenue size of the company
E. 5. Refined list by geography

2. We stalked.

Use elance.com and post a project like this

Now, remember how I said “borderline stalkerish”? I meant “full-on stalkerish.” Your Elance researcher is going to find all the decision makers from your target companies, their personal email addresses, business addresses, LinkedIn addresses, Facebook profiles with their personal email addresses and business addresses. Basically, everything short of where their parents and siblings live (unless they, too, are influencers, or they live with the decision maker, in which case get those contacts, too.)

True, Elance isn’t free. But it’s worth the (small) investment. I was willing to pay a premium of about $1.50 per name for such a small list where the customers were very valuable to us. If you’re doing a much larger and more generic list-building project you should expect to spend 5 to 10 cents per record.

3. We cross-checked.
We went on LinkedIn.com and ran a search for the peoples’ names to confirm that they were indeed the right people to talk to, cross-checking company names and titles. There’s no use in sending a thoughtfully personalized message (and its three follow-ups) to the wrong “David King.”

Take aways:
• There’s no need to try and build a “dream customer” contact list on your own with so many amazing outsourcing tools available. Elance is cheap.
• You’re going to want to find out as much information about your future points of contact at these “dream customers” as possible. Social media profiles are great for this (thanks, Internet!)
• Look for the people at the top of the organization if you’re in B2B.

Step 3: Design your dream customers an offer they can’t refuse

In order to create the perfect pitch to land the business we wanted, we spent a lot of time putting ourselves in our clients’ shoes. That meant sitting down and getting to know the challenges and opportunities they were facing. If the company was public, we read their annual investor reports, taking particular note of their discussions of strategies and major initiatives for the year. For non-public companies, we read industry trade publications to understand what they were going through.

Knowing their pain points and opportunity areas helped us shape our pitch and position our company as the one to work with. Why? Because we could educate them. Here’s what we did to land our dream clients, and how you can do it too:

1. We found out what keeps them up at night.
What are the major pain points that your potential customer has? What costs them significant time, money, or brand value? What trends and technologies might they be having trouble keeping up with? Do they lack visibility online? Are they being out-priced or outpaced by overseas companies? Has PETA made them a villain and they’re suffering from social media PR backlash?

In our case, we found our clients were classic brick-and-mortar businesses that didn’t have much experience online, and as a result they were struggling with the changes in marketing and advertising. So, to get their business, we offered them a simple training called “The top five ways to leverage new online methods to generate customers.” The bottom line: Figure out the target customer’s need, then figure out how you can be part of the solution.

2. We became experts.
You are going to need to describe, define and name the problem or challenge that your prospective customer faces — and you’re also going to have to be able to explain why your company’s product or service is the only viable solution. You can’t BS this. Start collecting data on the trends, technologies and issues that are key to understanding your prospective customers in a program like www.evernote.com. You can outsource this research on www.elance.com as well.

3. We designed a simple education program that we could provide them that addressed their pain
Companies respond well to education that will genuinely help them solve those pain points that you identified. If you are doing this online, I’ve found that this structure seemed to work the best for webinars.

Here are the basics for building the right kind of education narrative:

A. Open with a great promise. Think about a title or intro that’ll catch the CEO’s ear.
B. Outline areas covered. Address every step of your method. You’re pre-selling the education here. This is the tease phase that’ll get his/her attention.
C. Start with a little shock. Use some statistics that will catch people’s attention. Lists and charts work well.
D. Train on the trends, technologies or issues they face. This not only gives them confidence that you’re an expert in their industry, but shows that you know exactly what they’re talking about when you say you know how to fix their problem.
E. Show the company how you can turn issues into opportunities. Explain a few ways that they can take advantage of current trends, capitalize on these opportunities, and limit risk.
F. Go over the five things to look for. If they are looking for solutions to help them, this is where you can position your company. (“Your brick-and-mortar sales are being cannibalized by your online sales? Our team can help with that…”)
G. Hook them. At the end of the program, give them a simple offer to engage with your company. Resist going into pitch-mode; instead, go over the specific benefits you can offer them. Remember, this is about a reciprocal relationship, and right now you’re courting them. So it’s all. About. Them.

Take away:
• Focus on their needs and pains, not your sales pitch!
• Don’t pitch your business. This is an education designed to position you as an expert in the field.
• This is not a sales pitch. (Have I mentioned this yet?)

Step 4: Build a better mousetrap

Considering that the average email user receives 147 messages a day and deletes almost half of them, it was highly likely that if we simply started bombarding our prospective customers with emails, we’d be quickly shuttled into spam folders, co-mingling with offers of fake Rolexes and babe cams. Knowing this, we figured out a better way to get the decision-makers’ attention.

1. We wrote clever notes that were relevant to our educational offer.
An example: “Are you concerned that your online marketing efforts aren’t sticky enough? Call us and we will show you 5 ways that you can improve performance and lower costs.”

2. We found eye-catching small gifts that also tied into the education.
With the previous example, we included rubber sticky hands with our intro. Check out Oriental Trading Company for ideas (but maybe skip by the Hawaiian leis and novelty sunglasses).

3. We wrote a clever phone script for follow-up phone calls.
This script ties into your offer of education and the pain they might be feeling.

Tailor this script to your situation, but here’s the basic formula:
“Are you worried that online marketing efforts aren’t attracting the right customers? Call us today and we will give you a free education to show you five ways to make your marketing more sticky.”

4. We got it in the mail. Yes, the snail mail.
Assemble and package the first 10 letters with gifts, and get ready so that you can send out one per week over the course of 10 weeks. The reason to send them out once per week is that it will take time and multiple “touches” to get their attention. Make sure to send via priority mail (which has a better delivery and open rate).

Take away:
• Keep things simple and make sure that they aren’t just random crap. They have to be fun, useful and tie into your educational offer. Making the notes and gifts tie into the potential pain that the customer is facing (and into the educational offer you provide) is key.

• Be strategic with your time. Don’t call a dream customer three times in one day. Instead, use some calendaring skills and plan to make each prospective customer receive a phone call and a gift in the mail each week.

Step 5: Let the stalking begin

I knew from our early days of starting HomeImprovementleads.com that persistence pays off, so we created a plan to call these executives once a week, every single week until we signed them up… or pigs flew, whichever came first.

It takes an average of seven times for someone to hear about something before they take action (no, seriously – see the rule of 7), yet the average sales person gives up after 1.7-2.1 call attempts…
I figured that we needed to at least call them seven times, if not more… My own plight wasn’t always spectacularly easy, either (proof that being the Most Charming Person on EarthTM doesn’t always work with answering machines). It actually took me five weeks to get a call back.

We called and sent little gifts every week for a month without even talking to one contact. No one called us back or responded to our gifts, and my team was beginning to get a bit nervous. I kept reminding everyone of the Rule of 7 and that we had all committed to giving it our best, but as we continued to get no bites even I began to get a little anxious. That is, until the fifth week, when the CEO of a $3 billion company called me on my cell phone and said, “I’ve been getting your gifts in the mail and you’ve got my attention. How can you help me?” I practically jumped out of my shoes.

Things progressed with that client and we ended up working together. The next week I got another call. Two weeks later I got two more callbacks and two emails to set up meetings.

Our results at the end of 4 months:
30% of our total list of one hundred were contacted.
We had meetings with fifteen of the one hundred on the original list
We closed 2 major deals that equated to over $2,000,000 in revenue
We spent roughly $2,000 on gifts, postage and elance services.

Now, let’s talk contingency plans. Not everyone (dare I say few?) will answer your calls at first. You’ll have to navigate your way past barriers like receptionists, assistants, switchboard operators, answering machines – a barrage of bureaucracy that can kill your sale before it even happens. That is, unless you’re prepared. This is not a sprint…it’s a marathon. So be prepared accordingly.

Takeaways:
• Try not to be discouraged. This will take time, but you will get their attention if you keep at it. Promise.
• I’ve said this before, but seriously, this is for your own good: the goal of this is not to sell them, but rather to get their attention and position yourself as an expert. Then you offer to help them.

Now you have gold in your hands: a step-by-step account of how to take your business to the next level. But it’s worth nothing if you don’t act on it.
● Believe in your customers: the data will show you who to target.
● Believe in your product: your offer of education must be sold from the soul.
● Believe in yourself… so get started already!

Questions? Comments? Write them below!