Business
The Danger of Selling into One Vertical
In this episode of Sales Logic, hosts Mark Hunter and his partner delve into the risks associated with selling exclusively within one vertical. They discuss the importance of diversifying relationship...
The Danger of Selling into One Vertical
Business •
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Interactive Transcript
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Respect with integrity, we will get customers who have integrity.
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Integrity is the foundation from which everything is built on.
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You better understand value.
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But at the end of the day, sales is a relationship business.
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It is a people business. It is a emotional business.
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This is sales logic.
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This is sales logic. The show where we dive into the strategy,
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discusses, steps, everything that you need to know to sell effectively in today's marketplace.
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I am hanging out here with my partner Mark Hunter,
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who this man has had a week, but still he is here ready for sales logic.
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Hey, you have two. Hey, the topic, the danger of selling into one vertical.
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This is going to get controversial. I know it's going to get controversial.
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We also got a great lightning round.
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Top 10 ways to retain customers.
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I wonder how that's going to fit into the danger of selling into one vertical.
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So let's jump right into it.
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What's your take on selling into one vertical?
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Because a lot of sales people do.
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I've been in that space before.
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You probably have thoughts, comments.
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It's a really interesting subject.
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There are definitely pros and cons to it.
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Definitely in our industry, being professional speakers.
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That's one of the very first things you learn.
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Go deep into one market and go into the market that you have experienced.
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When I first started, I came out of the banking industry and everybody told me
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just to sell into the banking vertical.
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There's a lot of people in our industry who have done that,
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got sold into one vertical.
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I am not a fan.
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I don't believe in it for a number of reasons that I will share.
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So curious what your opinion is.
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There are some pros and cons.
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I'm going to use spirit systems.
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Manufacturing out of Wichita, Kansas.
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Manufacturing out of the 737 fuselage.
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If you remember that, Boeing had to shut down manufacturing.
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This company had about 88% of their revenue coming from one customer.
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So one vertical, one customer.
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They were basically shut down.
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That's the danger of it.
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However, because what they do is so technical,
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is so capital intensive, they couldn't be into other industries,
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into other space.
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Again, sometimes you're driven there, but here's what I come back to.
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If you are constricted to one vertical,
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and again, a lot of people are,
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you've got to make sure that you understand it from a depth standpoint
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that you really know downstream and upstream.
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Example again, go back to COVID.
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The hospitality industry got ravaged.
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I mean, virtually shut down.
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So if you were just focused in the hospitality industry,
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you were absolutely toast.
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But if you understood how the hospitality system worked
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in all of the downstream and upstream,
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you could find a way to kind of survive.
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Not great, but this comes back to you.
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You've got to have information that goes beyond just your one vertical.
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Yeah, I also think that you need to,
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if you're going to sell into one vertical,
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if you're going to stay in one vertical,
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you better be keenly aware of the threats and be planning for those,
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really be planning for those threats.
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Meaning that if you just sell into the healthcare industry,
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which really seems pretty bullet proof, right?
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But think about the Trump administration being in,
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versus the Biden administration being in,
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the amount of money flowing into the healthcare industry
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from the government versus the private sector,
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very, very different models, very, very different approaches.
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And you have to be keenly aware
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and ahead of those shifts to plan for them accordingly
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into your business.
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And one of the ways you do that is with the number of relationships
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that you have.
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And this is where I think so key.
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We had a great question.
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I'm going to come to it in just a second.
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But I remember 20 years ago,
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I had an opportunity to go to China for about 10 days
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to do a large program.
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And I was excited.
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And I had four customers,
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four clients that were generating.
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I was doing all consulting back then.
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That was generating about 90% of my business.
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And I thought, this is great.
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I'm good.
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I came back.
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I still remember landed in San Francisco.
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And within 24 hours,
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each one of those four were gone.
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Wow.
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What was of things that happened?
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And that was a wake up lesson to me.
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Now, here's why.
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Because I was not developing enough relationships
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throughout the organizations.
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And that absolutely kicked me.
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And it's something I've never fallen victim to again.
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Yeah.
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Big shout out to Natalie here.
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She sent me a really nice referral.
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Made a beautiful connection for me.
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I love that about community.
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And she's talking about the fact that when COVID hit,
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they did a digital transformation pivot from in person
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to immersive experiences.
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When all the in person,
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when all the in person shows stopped.
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Let me talk about the other thing that another thing,
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I think, though, is a risk of selling into one market.
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And then I'll shift to some benefits of it.
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Is that I think you,
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you, you get limited in your knowledge and experience.
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I was on a call yesterday with a potential client.
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And we're talking about the fact that she wanted to know
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how much experience I had in her vertical.
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And I have a lot.
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But I really talked about the fact that I think the value
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I'm bringing is that I've learned a lot from other industries,
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from other verticals that I work with.
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And, um, and, you know,
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I think there's a lot to be learned outside of your industry
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on how to solve your problems, grow your sales and things like that.
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I don't, I think it is limiting to think that the answers
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are always within your industry.
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I totally agree with that because I think I go back to my days
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in corporate America.
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I was so siloed.
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I knew everything about my industry and my competitors,
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my customers and so forth.
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But I couldn't tell you what was happening outside the building.
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I could not tell you at all.
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And as a result, I was missing out on changes in leadership,
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changes in style, changes in things.
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And it is, it's because what happens is,
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you actually become lazy.
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You become lazy.
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John is jumping in here.
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Information and knowledge is king.
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It's absolutely king.
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You got to study and understand multiple verticals
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and how they can succeed in each.
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What it comes down to is,
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it's not so much the vertical.
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It's the application.
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What is the application that you're creating?
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Yeah.
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Bren gave,
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Pops in here with a great,
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a great suggestion.
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You know,
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Bryns got a brand new book out.
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Lynn,
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Bryns, if you put it in the show notes,
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we'll pop it up here.
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And I got to get you on my podcast to talk about it.
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But if you have a vertical expertise,
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consider starting narrow,
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expand later by breaking into parallel industries
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that those clients could introduce you to.
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That, I think that is really key.
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You know,
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I started my career out in economic development.
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And the communities that really did well
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over a long period of time
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had four even economic drivers.
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Communities that were only travel and tourism
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or communities that depended mostly on,
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you know, oil and gas,
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like you just came from Houston,
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I just came from Vegas.
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So those are two examples.
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They really get hurt when the economy shifts.
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or communities that have agriculture,
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they have travel and tourism,
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they have, you know, manufacturing,
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they're a little bit more bullet proof,
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because usually when one goes down,
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another will come up.
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Years ago,
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I worked with a company that I thought it was
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the smartest business model I'd ever seen,
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is that they were in the construction industry
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and the oil and gas industry.
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And when I talked to the CEO about it,
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he said, in the summertime, construction is hot.
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I mean, that is what is growing.
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And then the moment that that industry shuts down
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because it gets cold in the winter,
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I've got oil and gas going when everybody's trying
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to heat their homes and,
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and, you know,
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run their tractors and do those types of things.
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So he was really bracing an understanding
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that his,
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that just being in construction was far too risky.
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See, that's what's so key,
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because it comes back to understanding the application.
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What is the application?
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What is the solution?
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It's not necessarily one vertical.
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It's the allocation and solution.
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Our question this week comes from Jordan and Chicago.
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He says,
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I've had a bad year.
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I sell into manufacturing and I have five major clients.
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I've taken such perfect care of them.
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My competition could not get in.
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But this year,
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I don't know where.
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My largest got new leadership
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and changed vendors without even telling me.
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There is no way I can replace that revenue.
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Any advice?
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Okay, I'm going to be flat out.
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Jordan,
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you're guilty of not having enough relationships.
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Here's the situation.
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I tell this to anybody.
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And it's a lesson that I learned from my experience
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with four clients.
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You've got to have the number of relationships
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that you have in an organization
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has to be in direct correlation to the size
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of the business and the opportunity that you have.
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So, you know,
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you may have a large client
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that is doing 50% of your business.
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So that may dictate that you need 20 relationships.
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I said that right,
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20 relationships,
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or whatever that number is.
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And this is what happens.
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We become so silo.
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Take care of customers that we're not seeing.
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We don't see it.
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Hey,
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Jordan,
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I mean, leadership changed.
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Were you aware of leadership changing?
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Were you aware of things happening?
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This is where you've got to get into.
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Hey,
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Brent put her book in here.
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The link in edge.
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And yes,
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it's out.
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You got to take a look at it.
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I had her on my podcast.
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You got to get your job.
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Yeah, I just,
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I just watched it.
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That's what made me think about it.
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I got to get her on.
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I got to get her on my.
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To talk about this.
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So I think the biggest challenge with our.
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Our question this week is,
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you're not only stuck in one vertical.
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You're stuck with far too many customers.
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I mean far too few customers.
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Yes.
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Like, no,
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years ago,
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I heard a presenter talking about,
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I was at a dental conference with my husband.
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And they were talking about doing at that time.
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This is 15 years ago.
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The power of doing 50 and 60,000 dollar dental cases.
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And he was teaching them how to find those kind of dental cases.
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And, but the thing that he said is he said,
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you do not want your whole market.
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You don't want your whole day filled with these.
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He said number one,
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they're far too,
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they're too complex and too complicated.
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And these patients are paying in the backside.
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You know why?
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Because they're going to pay you 50 or 60,000 dollars.
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He said the other is,
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if you, if one cancels,
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you're completely screwed.
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And so,
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and that's exactly what he said.
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But so he said,
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do your,
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you should be a 70, 30 balance.
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And I always took that into Mark, you know,
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in our industry, people are talking about,
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only speak of this fee, only speak of this fee.
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Well, the thing is,
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if you do that,
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you have far too,
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far too few speaking engagements on your calendar.
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And if one cancels,
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then you're in trouble.
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So diversifying that,
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you put all your eggs into these five customers, Jordan,
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all of it.
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And if one pulled out,
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you're done.
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And right now, you're done.
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So, as you look into 2026,
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no problem,
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you're going to expand that to, you know,
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at least 10, 15,
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if not 20 customers.
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I don't know the time intensiveness of taking care.
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But you need some smaller customers
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that don't demand as much time,
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but also don't put you as much risk.
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You absolutely have to follow that.
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There's so many lessons here that we can learn.
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And it really comes back to,
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what is the application?
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I'm going to use a big picture scenario.
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If you're a defense contractor,
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you sell the governments,
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you sell to department of defense,
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et cetera, et cetera, et cetera.
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But you know what?
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They've got skill sets,
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and they've got applications that apply to other industries.
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So what are they not?
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They have created other avenues,
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other uses of their applications in other industries.
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So, Jordan, this is what you've got to ask yourself.
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You know, you may have five customers.
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Okay, got to ask yourself,
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do I have deep enough relationships
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in each one of those five?
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Two, where do these applications that I provide clients?
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Where else do they provide?
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Because again, go back to that 70-30,
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like what you talked about, Mayor.
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Absolutely spot on.
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Hey, I love Dave Sanderson's question.
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Do you go deep in a niche or spread wide to diversify?
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Here's what he's learned after 38 years in sales.
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Leadership and life, clarity,
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always beats complexity and focus.
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Yes, exactly.
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And you think about that.
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He pulls that from
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Warren Buffett spot on Dave spot on.
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Yeah, I think that, you know, as you look at,
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I think one of the things we've all got to do
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with our calendars and looking at our pipelines,
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is if you lost a deal,
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if one of your existing customers left,
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what does that do to your revenue stream?
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I think the other thing you need to do is really take a deep,
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long look at your vertical.
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Where do you sell into?
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And going back to what Brin said,
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if you're selling deep into one vertical,
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what could be a complimentary vertical?
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That if one of those threats happened,
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you're safe because you've got things happening in this,
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in this other vertical with these other customers.
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I'm getting ready to do a big job in Detroit
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for a bunch of portfolio companies
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that sell in the automotive industry.
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And they're all struggling right now.
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They're all their sales are a bit soft.
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And the reason is, is because they're 100% concentrated
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in the automotive industry.
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And the automotive industry is under,
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it's at risk right now.
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So what we're going to work on is what are the natural ways
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we could expand and maybe sell into some other verticals?
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See, that's absolutely key because you brought up a great question.
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If you have one dominant customer,
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you have to ask yourself,
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how would you replace that business if they left?
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And you know what?
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So many salespeople said,
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oh yeah, I asked myself that question.
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No, you have not developed a plan.
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Because if you have not developed a plan
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as to how you would replace that business,
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then you are totally at risk of losing that business.
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And it comes back to this other piece.
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Not only Jordan, you got five customers,
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good questioning.
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Am I actively developing new relationships
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in each one of those five?
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And two, what am I doing to prospect outside of those five?
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Because chances are there are other clients,
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other opportunities with other companies
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in that vertical that you could be selling to.
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And this comes back to this whole thing.
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We become so fixated on protecting the big account.
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I don't want to be the one in the company that loses the big account.
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I don't want to be the one in the company that loses the big account.
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And you get so, your head gets so buried in the sand
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that you can't see what's happening around you.
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Yeah, love it Natalie, saying here,
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if you work with a big company, connect across the organization
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in their verticals so you are diversified within the customer.
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And it will open doors to other customers too.
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Such a good suggestion, right?
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A lot of these big companies that we work with,
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they've already diversified who they sell to.
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They've got other departments, other divisions
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that do very different things.
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And you want to open that up and you want to get an introduction
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because you're already a proven entity.
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You're already a proven entity in there.
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And you already know that you, you know,
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that the chances that you're going to get an opportunity
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to sell into that.
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The other thing I think too is far too often.
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We focus on the fact that we're an expert in this field
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and maybe it won't translate.
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It does translate.
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You know, if easily, easily and effectively it translates,
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you know, it translates into other industries.
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Leadership is not vertical centric.
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It is not vertically centric.
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Leadership transcends everything.
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And that is so spot on.
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Member a couple years ago, I was working with a private equity firm.
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And they had been really reliant on one vertical.
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They brought in a couple new board members.
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And it pushed them.
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That's why they brought me in.
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And they brought in additional companies.
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And thank goodness they did because ultimately what happened
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was the vertical that they were dancing in.
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Went through some major changes.
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And again, you've got, but it comes back to what's the application?
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What's the, what's the solution that you provide?
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Who else can you help get that?
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And will benefit from that?
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Yeah, I love what Brin is saying here.
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Socially surround all the stakeholders in your clients
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by bringing value on a consistent basis.
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So they fight for you when new leadership wants to make a change.
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So, so, so important.
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I mean, Jordan, I do wonder if there was opportunity here for you
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like to what Brin is saying is that did these people fight for you
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and say, no, no, no, this is the only group that we, you know,
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that will work with.
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I was working with a client a couple of weeks ago.
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And I got the opportunity because the, when the company
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was looking to make a change, they were really married
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to this one individual in the organization.
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And they have let that individual go.
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And they weren't that tied into the company.
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They didn't care about the company that much.
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They really cared about the individual.
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And the company really missed the opportunity and, and the understanding with that.
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You know, even it comes back to kind of almost an apple mentality.
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They create an ecosystem that once you have three or four apple devices,
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you can't get out of their ecosystem.
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Salesforce as a CRM system, same way.
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Again, clearly what's happened, Jordan.
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And this happens to so many people.
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They become vulnerable because really what they've allowed themselves to do is sell a commodity.
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They allow themselves to sell a commodity and they have not distinguished themselves enough
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because again, what you're doing, I hate to say it,
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but you're taking the lazy way.
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You're servicing the customer, you're taking care of the business,
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but you're not really creating opportunities to help them grow.
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And this is the insight that you got to bring.
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If you're not sticky, you will get booted pretty quickly.
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Yeah, I will say if you're going to take the approach of like you're listening to this
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and you're saying that Mark and I just don't get you and you have to sell into one vertical,
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there's some things you need to do.
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Number one, you need to sell your existing customers if you are going to, to lose them.
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Like you really need to make sure they understand every reason they choose you over the competition
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and why they're getting you, you know, why they're, why, what they get when they choose you over the competition.
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Don't assume they know because if somebody shows up with an easier process or a cheaper price,
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you want them to go, no, no, no, I'm not even going to let you through the door.
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I don't want to talk to you.
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You need to, if you have not established some crazy level of expertise.
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If you are not one step ahead of that customer, you better get one step ahead of that customer.
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Because if they don't see that they need you, not the product you sell, they need to know they need you,
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then you've put that relationship at risk.
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And the way I measure that are they talking about you to others.
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Are they talking about you to others?
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Because if they're not talking about you to others, you're not doing such a great job.
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You just have not really mastered it because again, you're not warranted.
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You haven't earned the right for them to talk about you.
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This is so key.
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So again, you can be in one vertical, but you got to have such deep relationships that they cannot let go of you.
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Because what you sell is not a commodity and two, they are actively talking about you to other people.
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And to do that, you've got to have so many relationships.
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So you got to be so in-depth and understanding downstream and upstream.
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We got a great level of conversation going here.
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I got to do a sound check.
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So we better hit the book and that's good.
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Okay. The book today is from Anthony.
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I'm going to pop these comments up here because we've got good comments.
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So if you are, if you're listening to this rather than viewing it, head off to YouTube and catch the comments on here because they're all good.
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All right.
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You got the book Anthony, you know, Reno, eat their lunch, winning customers away from your competition.
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What are your thoughts on it?
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Yeah, it's such a good book.
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I've read it twice.
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And when I was looking for a book to really go with this podcast, I thought I need to pick that book up and read it again.
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It's just, it's so timeless and nothing speaks better to how to retain and hold on to customers.
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And then to think about really diversifying your base better than Anthony's book.
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Yes, because it really tells you how to go down deep into your customer.
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Okay, lightning round.
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Top 10 ways to retain customers. Go.
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Number one, I'm going to take what Natalie put up there and that is actively calling them.
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Mark your calendar to reach out and connect with them, whether you need to make a sales call on them or not.
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To create more relationships in that account.
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Yeah.
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I would say make sure that you are finding ways to at least on a quarterly basis add value.
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I'm going to take that a step further.
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You got to be sharing with them insights regarding their industry.
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What's happening in their industry information that they're not normally seeing.
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You got to be seen as the expert.
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Yeah, if you want to retain customers on board them effectively, like really pay attention to those 30, 60, 90 days.
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And make sure that they have had a better experience right up front.
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Number six, understand their customers.
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Who are they selling to go downstream help them provide solutions for their customers?
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Yeah, number seven personalized the relationship.
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Like really make sure that you intimately know and understand things about them.
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And you make the your communications really personalized to them.
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Don't allow yourself to become cost centric in other words, oh, I'm trying to find ways to lower cost.
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You want to find ways to create benefit.
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It's the benefit of ownership. That's what you're selling.
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Yeah, recognize and reward their loyalty.
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If you want to hold on to them.
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Really, you know, point out and find ways to take care of them.
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I was thinking about a little restaurant that I go to all the time.
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Not only did they make it really easy for me to do business, but they give me a reward every four or five orders I put in there.
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And it makes me want to come back.
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Number 10 introduce them to other people.
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Bring people into their circle to where you create a network.
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Hey, I think I think we get 10, right? Yeah, we get 10.
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If you like what you hear, subscribe, rate and review the show on your favorite podcast app.
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Hey, if something we've said is earned you a single dollar, consider telling a friend about our show.
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Because it's how we grow when we help you grow. I'm Mark Hunter.
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You know, I'm Meredith Elliott Powell.
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Remember when you sell with confidence and integrity.
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All of this uncertainty suddenly becomes your competitive advantage.
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And the sale becomes logical.
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All right, another great show, another great weekend.
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And listen, remember, if you have questions, please send them in.
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I mean, we designed this show for you, our audience.
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And join us right back here next week, 8 a.m. Eastern for another episode of sales logic.
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Now go close a deal. We'll see you next week. Thanks everybody.
Topics Covered
sales integrity
relationship business
selling into one vertical
customer retention strategies
pros and cons of vertical selling
understanding market dynamics
importance of relationships in sales
sales strategy podcast
emotional selling
sales logic
navigating industry shifts
diversifying client base
impact of leadership changes on sales
digital transformation in sales
cross-industry learning