How’s Your Compensation Plan Holding Up?

[Music] hello everyone welcome to the 21 hats podcast I'm your host Lauren Feldman this week Sean busy Liz picarazzi and William vanderbloom and discuss what it's been like trying to make sense of employee compensation in a time of covid the great resignation inflation and looming recession Sean's business model is evolving and he's trying to adjust his mix of employees to fit the new model with as little disruption as possible Liz is expecting a year of a big growth and is assessing how that will affect her staffing needs especially as she introduces new benefits including Healthcare and William is trying to create a more sustainable compensation structure while also breaking his employees expectation that they will always get a year-end bonus plus a listener asks what tasks are the owners still doing even though they know it's not worthy of their time beside from participating in this podcast of course even in Good Times owning and running a business can be a lonely Pursuit our hope is that these weekly conversations brought to you by our sponsor the great game of business will let owners know they are not alone in facing challenges same thing with our daily newsletter the 21 hats Morning Report which Inc magazine named the best newsletter for business owners and which you can subscribe to for free at 21h hats.com where you can also find transcripts of our podcast episodes and lots of other articles and interviews joining me this week on the podcast our regular Sean busy CEO of Kinesis which is based in Portland Oregon and works with small businesses on marketing culture and strategy Liz picarazzi who is CEO of City bin which is based in Brooklyn New York and makes trash enclosures and package bins and William Vander blumen who is CEO of Vander blumen Search Group a houston-based recruiting firm that works with churches and other faith-based organizations the episode is titled how's your Compensation Plan holding up welcome Sean Liz and Williams it's great to have you here for the first podcast we're recording here in 2023 I hope you're all having a great year so far I wanted to start with a conversation about employee compensation the latest figures show that companies are paying the biggest raises they've paid in decades I gather trying to keep employees I I suspect that those numbers reflect larger businesses by and large but I'm wondering this is affecting you guys as well William this is your field what are you seeing well I can tell you what we're doing at our office and it's based on what we're seeing you know in the pandemic we had to reorg and reshuffle and we for the first time had to do staff Cuts back in March of 2020 and that left us with kind of I mean we lost some really good people it wasn't like we had fluff but the people that stayed with us through that we are very interested in keeping around and retention is such a big deal right now that I authorize a percentage bonus pool and then our managers go and figure out how they want to divvy that out and I authorize the biggest pool percentage wise that the I've ever authorized was that based on your company's financial performance in 2022 or was that based on the goal of retaining employees it was our best year ever by way better than we thought so it was a little easier to take that step but you know cost of living I guess is starting to come down some but we kind of figured just to make people whole we better do eight or n% and then we did a little better than that was it just bonuses or did you offer significant raises as well no that's all all raises bonus is a separate issue I see not everybody got that number I mean we offered that number to our managers and said you might have some that deserve 11 and some only eight or what you figure that out that's fine but but what we're authorizing as a company is a significant pool of money to raise annual salaries which is as you know an evergreen cost but we think that um the inflation issue is real and the people we have with us now are some of the best people we ever had so we're kind of paying it forward in retention and that's based on what we're seeing in other areas the that a lot of people really cut down to the bone during the pandemic the people that are left are really pretty critical to the uh business and painful as it is to raise Evergreen costs we're just going to do it to try and show people we understand that it costs more to live than it used to and we want you around for a long time had you had much turnover uh well we did we did about seven or 8% the year before so the losses we had were not because of Finance we made some pretty significant shifts in the last 12 months and some people didn't feel like that was their best place to flourish and they moved on and and that's fine wish them well I don't think we had any really nasty departures uh it was just chemistry is seasonal right and uh as we move from one posture to another there's some that enjoy it and some that say that's not my deal and we wish them well and move on but I don't think lost people because we were not keeping up with cost of living Sean from what you've told us I I gather last year was not your best year ever tell us how you've been approaching employee compensation yeah um so before the pandemic I went really hard at the idea of compensation and making it better because I started thinking about the thing that employees and owners both dread which are those negotiations and it struck me as very very odd that you would go through all the effort to hire a really great candidate you get on this really the high of oh my gosh this new person they're so good and then right before they join your team histor typically you engage in this like almost adversarial uh issue of figuring out what they get paid and there's so many problems with that idea just I think of from a cultural perspective but also from a equity perspective and creating gender and race wage gaps and so we what we did is we committed to every two years doing a market based survey of what the positions in our company um pay and then we committed to paying 75% of Market um which is you know not the very top but also pretty pretty significant and then on top of that we built a bit of a formula to factor based on experience tenure and the organization what the uh rate of pay would be for an employee so that system was really great you know because we do open book management at the company so there's a real kind of clear understanding of financials and that there isn't this giant bucket of money to raise wages are you transparent about salaries as well Sean we are but in a very specific way meaning that every position that you want to go after will share that range and how that formula works we don't post everybody's compensation on the wall I I think that that's problematic in lots of ways um but if you know somebody says hey I'm a designer and I want to go into the strategy Department what would that look like we'll talk about the compensation range and how that formula works and and then we also post it with every job description which is now required legally in our state anyway so that PR has helped us from a compliance perspective a lot and also I think protects us a lot from a a lawsuit and that kind of issue so I I love I love love love love love it it's been great the problem that I'm finding now is it's time for our annual survey we did the survey and holy cow the wages have gone up so much you know we were like I said pre pandemic we were 75% every position has has gone up by anywhere from 1% on the small side to probably 14% And then my position which is crazy uh so the CEO role has gone up by 20% Which is just astronomical so now I'm looking at that going like I don't need a 20% raise but these other people really do need raises and so it's really creating some challenges to our model just partly because we weren't hurt instantly by the pandemic but we were really hurt from a marketing perspective over the long term of the pandemic and we're just now starting to kind of recover from that but you know everybody who knows marketing knows that the thing you do today will probably have an impact 6 months or 12 months from today so that's our hurdle right now is that our financial situation is kind of like eh okay and you know how do I stick to my commitments in terms of compensation with a much smaller pie than I've historically had so that's my challenge right now have you started having these conversations with employees you know we've had it at a leadership level and you know the these are the hard decisions that is leaders you have to make and I I think William all alluded to this a bit is like there's the added complexity of our business has changed dramatically in the last especially last five years but definitely over the pandemic we've shifted from being you know the shop you go to if you really need branding if you need great brand work we've got lots of design support we can help you in that to a lot more Consulting and a lot more of a like strategic play and so we're misbalanced as an organization we have too many design resources too many people who are in that realm and then not enough who are in the strategy realm interestingly the strategy realm is the place where the greatest compensation changes have happened and the design realm is where it's flattened which is I I've known that trend has been going on for a long time as as design and content creation and lots of those Services have been commoditized so so it's a tough it's a tough situation for a leadership group because we love our team like everybody here is a great employee we don't have any dead weight and yet our ratio of employees is kind of wrong and I would love to grow my way out of that problem and that's what we're trying to do but I I don't know if we can grow fast enough to resolve that that's that's the tension where do you get the data you use when you assess the market salary levels yeah great question um so we partnered with an an agency here in Portland uh there are many of them that have access to pretty significant databases I'm guessing Williams firm has that kind of information most Staffing and recruiting firms have access to that they're an outsourced Human Resources company and so we partnered with them and basically what we did is we crafted job descriptions for every role in the company and then some of those positions weren't easily off the shelf so you might have a job like a strategist which isn't uh you know that's kind of a vague term and so what we had to do is we had to combine off-the-shelf job descriptions like a marketing director and a business consultant and kind of create a hybrid role so that that the analysts who when they're analyzing the market you know could say well if you're 60% marketing director and you're 40% business consultant then you know we're going to take 40% of that wage rate and then 60% of that wage rate and combine them and get to what the Kinesis number is the more specialized the job the more you have to create kind of a bespoke answer um to that question which you know I feel really good about that in that it feels Fair the challenge when you have job titles and roles that are not readily identifiable I've also learned is that makes recruiting hard and William can probably speak to that too um you know because you have these these terms that people aren't searching for so there's a lot of challenges in there I think we've solved it from the compensation perspective but yeah that's kind of a Pandora box as we start to open that up Liz what's going on with you we're still a very small company we're just eight employees and so we have an evolving compensation strategy we kind of adding additional components each year so last year we G we added profit sharing which then will continue into this year and we do have a lot more profit so they're kind of getting a bonus is going to feel like a bigger benefit than it would have been you know in the previous year with salaries we do reviews over the summer and I do remember a couple of raises that I gave that were pegged to kind of the market rate but they were looking at the inflation rate and it seemed that there was an expectation that the raise was going to correspond directly with the inflation rate which of course I couldn't do and I did prepare for that conversation knowing that it could come up it was maybe a Forbes article in your morning report and it was exactly on that do not make raises is directly based on the inflation rate because that's a temporary figure that's always going to change but in terms of like next year not this year we're going to be adding health insurance we don't have that right now and I guess one thing also looking into this year as we grow I am going to be promoting a couple of people that have been with us for a while which then will be managing new people that we're going to hire but I'm also going to be uh hiring some people above my existing employees and I'm a little bit worried about that and that's where the you know looking into the compensation needs to be done really thoroughly because existing employees are going to look very closely at what the new employees are making I know it's a common issue in compensation but it's not one that I've ever had to face before are you transparent about what you pay people or are you just assuming that people will find out what others are making um I it's kind of like I I assume it we're very open but I don't have like a chart or anything on the wall sure I would say it's evolving and um so far so good but you know it's it needs to be formalized if not this year then next year do you basically assume your employees talk about compensation yes I do and the other thing is that a lot of the employees are friends and relatives even so it's just like a natural thing it's they're not like strangers they there's that familiarity and then also the person that does payroll you know she I'm sure that she's discreet but you know she's also going to know that if I hire someone that's paid more than she thinks they should be paid you know that's the sort of scenario I'm a little bit worried about which means I need to look very carefully at what I'm paying people now and make sure before I bring in someone at a higher rate that they're where they need to be Liz how does your profit sharing program work we have it kind of on two thresholds um and I actually don't remember exactly what the percentages were but if you hit one threshold it's a certain percentage of the profit if you have a higher threshold um the bonus is higher based on that you mean if the company hits a threshold or an individual's performance a company companywide this year that we've been doing the profit sharing actually this is the second one I definitely feel like people act more like owners and maybe it's partly a function of it being small and also having employees that been have been with us for a while and really feel probably feel like owners I can see that there's more probably more chasing you know of deals and sales as well as wanting to cost cut you know I don't feel like I have to be so diligent about cost cutting initiatives because I know they're now incented to do that does everybody get the same percentage based on their salary or how does that work it's actually not based on their salary it's based on um what the company profit is so everybody splits everybody gets the same percentage whether they're a high level employee or a lower level employee yes how do you work your bonuses William oh man that's changed over the years it's just changed every year it it feels like we're a little bit different we don't have investors we grow at the speed of cash we don't have debt never have aside from you know every couple years maybe having to do a line of credit when there's a cash crunch just from cash flow so we don't have reservoirs for bonuses unless the company grows right now when we started I I didn't want to take out big loans I didn't want to give away Equity to investors so when I hired people I I basically paid him a really low based salary and said just trust me if we grow I will make it right at the end of the year and depending on how we grew and depending on the performance of people we had bonuses where the bonus was probably 50% of their overall compensation that was kind of back in what I call the duct tape paperclip era for us maybe you never grow out of that but it was kind of the just how are we going to make this work for right now and what I'm trying to work on now is sustainability and so I'd rather get those base salaries up to a really competitive level and what I found over the years was I guess I need to be a better leader but I found that those big bonuses while if you took the base salary from the old days and the bonus added it together is far less than what people are getting in a base salary now but people don't remember that they just remember I got a big check in December and there was I don't know how to prevent really nice people good people but it felt like they were a little entitled and that sounds like I'm slamming my team I'm not it's just human nature yeah so I've been fighting that quite a bit for the last few years to the point of just saying we're going to keep moving forward with making this a place where it's like wow you get to work there you're well taken care of You' got a great workplace you've got great benefits you've got great and adding benefits oh my goodness Liz God bless you as you start that Journey that is yeah amazing how much i' they didn't teach me this in seminary so I've had to learn as I go and you know I'm doing things now that are different I'm trying to be like actually okay True Confessions y'all don't don't forward this to my team from a year ago but I was looking at like how I actually Googled how often do slot machines pay out you there's some math that's been done there that works really well and it's like if you pay every x% of time then people really think they have a chance of winning but they don't mind if they're losing and I like maybe that's how often I ought a bonus so we had like a in 2020 we had a really awful second quarter and our people pulled through it and then July things turned and it got better and just as a thank you I think we sent everybody $1,000 the week before Fourth of July and said go do something fun you know or put it in the bank or whatever you know but this is just kind of Battlefield promotion pay right just a one time thank you and I'm kind of moving toward that like random Wow you went above and beyond the call rather than annual bonus now you ask me in two or three years once I've got the salaries where I think they're really really hard to beat and the benefits are amazing it may be that I go back to what I was doing in duct tape paper clips but for now our focus is sustainability and that means means um going ahead and taking the the very expensive gamble of raising our annual budget every year by getting benefits and base salaries in a better and better spot man my experience so mirrors what you just said there William you know the early days you don't pay people very much if you do well you throw a bunch of money at them at the end of the year and I've learned over time that that idea of an expected annual bonus is terrible for an organization because there are going to be years where you can't make that right that year you can't make it the level of disappointment is just so high and it's it's crazy and and like you said it's like we pay people so much more now in annual salary than we do when we had the like low salary plus a bonus kind of idea and what's interesting about it is I think it's shaped us as a more calm company a lot less drama a lot less turnover a lot more mature employees and I'll take that any day it's just so hard to go from one to the other but you I feel like you have to because otherwise you're just like chaos right 100% agree with you Sean we finished our nine core values cultural values years ago and it was in the middle of this transition right and I had all nine ready and we were headed head of the office we we long process involved the whole team and everything and we were s sitting there in our youngest who was probably two or three uh at the time and she's not a morning person and she's the baby of the seven kids and she's sitting there eating her cereal and she just looks up from her cereal and she says today I will not drama wow and I thought oh man I need to let's make it 10 values that can be the 10th value we will not drama and and and I wish I had but we didn't and I even thought well like 10 10 commandments not nine like I was doing all these things in my head and but getting the drama out is so helpful and and I'll tell you as an owner we had that year where we couldn't pay the bonuses we grew but we also added staff and just for a lot of reasons we couldn't do and it affected me like just very selfishly it made me grumpy it led to bad decisions on my part it led to me taking on all this uh sense of resp responsibility for people that I shouldn't have and I I I was not in a healthy spot that year so I 100% agree with you it's hard to get there but we're making the shift little by little and your you know your slot machine insight's really good because humans as social media has taught us really respond to asymmetric reward so meaning like oh somebody liked my post oh nobody liked my post nobody liked my post somebody liked my post that is just addictive behavior and so the problem with the annual bonus is it's the opposite of asymmetric reward it's expected right so then you get this thing called hedonic adaptation which is where people expect to be treated in a certain way and that's the enemy of an entrepreneur is is expectations and entitlements so the the slot machine idea which is like hey we did really great you guys pushed through something really hard here's a little bit of upside from that you know and and then time goes by they don't see anything don't see anything then like out of the blue there's something different I think that's a way more powerful way to engage I think it it it moves away from the expectation of always getting something Liz William referred to the challenges of uh getting up to speed in terms of introducing uh new benefits like healthcare as you referred to you have any questions about that yeah I mean I would love for there be some sort of a service or platform that's like One-Stop shop where I can you know get the health insurance life insurance anything with 401k like all handled together so I don't need to have different providers for all of that because as you guys know from me talking on here I hate red tape I can't stand administrative work so the idea of having like four or five new providers to the business that need to be managed and looking at the pricing every year as we do with you know other types of insurances it'd be great to have the One-Stop shop so Liz I I can share I went through the same heartache belly AE headache the whole thing and you got eight eight employees and it was probably when we had three or four the reason I got to that heartache was we had three or four and we were doing a policy through just the guy that handles our insurance personally and and Adrian had an allergic reaction to something that we were at a Halloween party for kids Adrian's your wife and co-founder yeah yeah yeah yeah sorry sorry so I mean she was fine it was no real Health scare but man it was she blew up like a balloon she looked like a a character in a Dick Tracy cartoon it was awful and she it was terrible she she's like do I look bad and I'm like those jeans do not make you look fat really I promise yes you know it was awful and and so the net net was there was no cause for it she spent two nights in the hospital getting it calmed down she was fine never in danger but the next year our health insurance rates went up 67% they maxed out oh my God and because we only had you know it's all gambling yeah we only had four people so you have one big claim so I'm like ah so we went to um you probably know this list but we went to a peo so like Insperity is like the biggest one and it started as administ staff ironically uh it was Adrian's across the street neighbor in Houston who started administaff and and the peo basically charges you a little more than you would get charged and Lauren maybe you or Sean can explain it better but you essentially lease your employees to Insperity and now they're part of a two or three million person uh employee force that negotiates with the insurance Cary don't have those Max loads happen and then they offer I mean we we had life insurance we had pet insurance we had and everything there's a little bit of a a tacked on fee it is more expensive but if you're if the headache is the driver for you you might consider a peo yeah I you're thinking so right Liz and my same experience here William except that I've held on probably too long to like the oh here's my 401k provider and here's my insurance provider and here's my payroll and benefits person and and like throughout the pandemic a lot of those vendors have become really lame and the administrative burden I have right now is out of control and I'm looking really hard at like how do I consolidate in peo a potential option there's another one that's relatively new called have you William have you heard of it it's called an ASO oh sure we did that was our next step was to go from ASO administrative Services organization I just found out about this the other day yeah you're not leasing your employees so like when I was with Insperity technically Insperity was employing all my people they sent the W2s it was their employees and they had three million employees spread across a bajillion companies the ASO it's like no they're my employees but the ASO does negotiation and it worked for us when we were a little bit bigger our third step and where we've been for quite a while is to just go with an insurance provider that focuses on family-owned small businesses and we've been very pleased and it its benefits Concepts I think is what it's called it's based here in Houston and it's one of the best ones in the world yeah so we've we've evolved as we've gotten bigger but back when we were where you were Liz we we went with Insperity it cost us a little bit more money but the headaches were gone and the concern about huge spikes and rate increases went away too Liz there is a an HR software platform called Rippling I don't know if Sean or has any experience with them but I know Sarah uses them and loves them and I've heard a lot of other owners say yeah I left I left out of step we tried zenitz for a while which was one of the first of these online Atri platforms and it was a total nightmare um so if you're going to go that route just yeah it was awful like you can Google them it was bad it was just a typical um what I would call a typical Bay Area startup thing and they had a fun culture and it was growing real fast but they had no infrastructure and it was so fun that you know people were having parties instead of dealing with my benefits and you know cart before the horse kind of thing and and I'm sure it's gotten better now I'm sure the one Lauren mentioned is the next iteration of that and then in a better spot but we were early adopters and and shouldn't have been quite so early well I think there's a new risk now so that space is becoming really crowded and there's a sh uh trying not to I'm trying a lot of a lot of thank you an S ton uh there's an S ton of money or there was an S ton of money coming into there a lot of money coming into there and I think the new risk is that capital is fleeing Tech right now and they're saying you've got to be profitable and so the problem William described was the early stage problem immature companies run by by Manchild and now the problem is because money is not free anymore these organizations are being told you to be profitable and so what they're doing is they're like hacking and slashing and I'm not I'm curious if they will uh suffer from a from a quality and service perspective and so that's the thing to watch for with all those online tech funded uh organizations but yeah some some of them have been good for some of our clients yeah I would just buy or beware on like all this stuff and yeah I'm I'm interested in that firm you're using William what's there are they privately held are they a public company privately held but but one of the largest in the world okay they think like small business now our open enrollments in the summer because during Co there was a grace period so it moved from end of year to Summer and he's told us to expect a six to 7% increase but he shops around and is very competitive and uh has has made this iteration of our benefits a lot easier I do think Liz you're just in for increased overhead every single year once you do it and for us we have a lot of people that used to work in churches and then come to work for us and they've never worked in a small business or they work for a giant oil company and then come work for us and the benefits that are offered in you know those kind of like I can't compete with that I just can't you know yeah it sounds like you have some interesting organizational issues you're thinking through there yeah so um you know I have the goal to to double Revenue again this year again being the key word there yes yes last year I didn't do much planning around um growth as we grew so I want to be more diligent about it this year and I also it gives me a chance to look at all of the existing roles and see you know does it make sense the distribution you know where do where the next roles need to be you know so I am using this as a chance that maybe once every two or three years I really look at the organization and see what needs to move what needs to be added what needs to be removed so I'm I'm not being very concrete about it now but that's because I just started the exercise last week um and I actually had a couple of my team members uh present an org chart to us a couple days ago on if we doubled the where would the new roles be and what would they be so we were off in Japan in December and I had to give them some sort of kind of big thinking activity so that was it and they had some really good ideas there were a couple of surprising kind of shifts where you know I'm not handson I'm not in the business I'm not dealing with the warehouse or you know with the tariffs or any of these things so seeing what is the nitty-gritty of what various people are doing and how some things don't make sense the way they're done and I'm seeing this as an opportunity to make things roles a lot more clear as well as to create kind of a growth path for employees to be promoted into you know other roles are you clear in your mind what the most important pieces you need to add are if you're going to double Revenue this year yeah so um it's mainly to add uh sales and marketing in the municipal area so for cities sanitation departments business Improvement districts as well as higher ed um you know we are just using our existing team to get all those sales and you know they're they're growing it's it's been a very um kind of rapid growth but I see that if we bring someone in that already has a good Rolodex or good experience in those areas that that's going to help us grow a lot so that would be an important part and then I do see in terms of like Opera ations with the warehouse and with supply chain and with shipping um right now there's a kind of a mismatch of people doing it including Frank my husband who spends almost every Sunday at the warehouse counting boxes that should not happen we laugh about it he does have this sort of it's a it's a routine now he goes there on Sundays and it really is just like as an owner the feeling of having your product in your around you that sort of ownership over what you've created I think for both Frank and myself that's a that's like a great feeling having come from like corporate backgrounds so where there's not much tangible value that you can see and touch so you know he's kind of explained it that way but what exactly is he counting Liz is he making sure you have the boxes ready to go out the door in the coming week or it's a combination of things so because we're doing so much with the city and it's so high profile we do have a lot of inventory going out to those and we just want to make sure everything is right and then the other thing is like we have three containers that just came in yesterday and so we need to make sure that we have room in our warehouse for it and that does you know because we haven't kind of operationalized the calculation yet of the warehouse space it's been sort of manual so I should probably ask him to kind of let's make this this more clear um so we automatically know how many containers will fit into this warehouse for example like right now that's kind of vague but he he enjoys it um he worked in supply chain stuff in his previous career so you know a lot of the stuff with you know dealing with customs and with shippers and he he likes that stuff I'm kind of curious to step step back just a minute about your hires in the coming year you said sales and marketing I hear lot of people shove those two words together do you see that as one role two roles separate roles what are you going to hire first tell us a little bit more about the strategy there junior senior yeah spell it out for us because this is I would say one of the top five struggles for business owners especially in that you know kind of one to5 million range even up to 10 million well so um the sales is in this area of government and education and we don't have expertise other than doing it for the last couple of years in that area and we just know there are people that sell to institutions and they know how to do it they have you know deep connections existing connections so the idea is to bring in someone that can really set up that whole kind of sales network maybe it will be Regional maybe who knows maybe it would be virtual but can really set up a diligent sales process MH with higher ed and with and with cities quick question about that so this is another pain point do you hire the person who manages the other people or do you hire the person who's like in the trenches selling and closing deals I would hire the person who is managing the people and like setting up the whole strategy okay so that's an expensive hire that's like a six figure hire pretty easily is is my sort of Market assess would you agree with that I would yes uhhuh and then you got to hire the people to do the work so really you're talking a sales investment of probably 160 to $250,000 yeah yeah it would be years ago 10 years ago golly yeah maybe even a little longer I was at this same juncture and um I love selling things I mean from being a newspaper boy which doesn't exist anymore like I was the salesperson when we started and it was just me and the dog and Adrien and uh I was looking for that next salesperson and I remember going to dreamforce which is the Salesforce big conference out in San Francisco and going to inbound which is the hub spot and we're customers of both and just by dumb luck ended up having conversations with the hers of their sales departments and both of them told me the same thing and separate uh Arenas they said our clients probably the number one mistake of Founders who like selling is they wait too long to hire the EVP of sales the person that I hear you saying Liz you want to go after Smart Ones will do it soon so I think you're really on to something going that direction first yeah no I I definitely see that and if you know it is 1602 200 I think that it would easily pay for itself yeah I mean these are big ticket sales right long Sal cycle high dollar they are you know they're they're institutional um my only concern is just that as it is with any new employee is you know are they going to be worth it um I have had some failures in hiring people so bringing someone on on a maybe a project or Consulting basis to see how they think and what they can do um I would do before going out there and and hiring someone like that because you know I just have experienced that sometimes they say they have the connections and they understand the way that they're going to do it and then they they they're a bad writer like so for me as a writer I find that so offensive that it makes me question like does this person know what they're doing like this is really important do I need to write the sales copy yes I'm controlling but most of the time when I write the sales copy it's good it's not often when I have someone else do it and that's such an important communication so their ability to communicate is really important I tend to find that somebody who's good at the Strategic level of selling should be good at communications but then often when you get down into the like the real hunting and trying to get the deals those folks struggle because they're always in such a hurry William I'm curious you in the beginning you told us that you're coming off your best year ever I'm just wondering did you fig figure out something about sales in the past year that led to that oh Lauren every great success we've had is just right place right time it's not me figuring it out the pandemic ended up being I mean there's so much bad I don't want to minimize the horrible situation people went through but I frankly in as early as late 17 um I just gotten kind of complacent you know uh sustainability low growth and I I just kind of was riding our normal growth and uh then when we had to redo everything in 2020 it's almost like we went back into startup mode and which was really healthy for me I I didn't like it you know there's a lot of things healthy for me I don't like but coming out of that one of the things we realized is as Lauren knows we're we're content-based marketing nearly all of our leads are inbound we into any outbound calling and some of that most of that is because we were doing a new thing for churches when we started and churches and new ideas are not best friends so you can't just cold call people with a new idea for a CH it won't work you you get the door slammed in your face and kill your brand so we spent years providing content that would draw people to us and then they would finally write to us when they get the bottom of our frontal and say okay I'm ready can somebody call me and and it was great it was awesome it was I remember the first salesperson I hired it's like you don't go out and hunt and kill and drag it back in a cave you wake up in the morning you open the door and there's a severely wounded animal on your doorstep and you just have to drag them across it was nice but but after the pandemic we realized um the pandemic accelerated so many Trends right and one of the trends that accelerated was that the idea of search among the faith-based communities we serve has now become normal it's not a new idea anymore it's probably a new idea for pockets of the church and places that are uh later adopters it is no when you're no longer on a sales call selling the idea of using a search firm it's now why are we better than any other option that's out there which made us say okay for 2022 the big goal is we're shifting our posture from reactive to proactive in other words we we're reactively waiting on leads to come in reactively waiting on candidates reactively waitting we're going to move everything to very proactive compassionate aggression if you will like really get after it by doing what well making proactive sales calls like literally if we had a lead in Atlanta we hired a sales guy we sent him to Atlanta he went to see that lead and he went to four other churches that he figured out needed pastures and he knocked on their door and me like old school sales which never would have worked before ever and it it feels I could be wrong give me another year or two to to back this up it feels like the pandemic accelerated us toward a Tipping Point where we're now a proven concept as an industry now I I kind of wonder if the biggest lid to our growth for this year is just not having enough salese you know I know businesses would kill to have an automated content-based here come leads down the funnel we don't have to do anything and we're going to keep doing that but on top of that we're going to become much more proactive and aggressive and I won't bore you with all the geeky details but the data is showing us you can see if you look at our dashboards like oh wow it's it it could be Harvest Time and uh it means that it's a whole new kind of person that's doing the selling and that it goes back to some of the turnover that Lauren had asked about earlier it's not good good guys or bad guys it's just people that I mean Hunters that are truly proactive salese are different than sort of the nurturers or Farmers to use the other kind of salesperson um so it's it's a fun time we we'll see where it leads but uh it's it's a fun time do you have enough time past yet William to where you can like do just a financial analysis and say you know over the course of 24 months we spend $280,000 on content creation and marketing yeah yeah yeah and over 24 months of hiring salespeople we spent this much and then under each of those models we get this this many inquiries and this much converted Revenue which is really the most important number that's so good I just wrote all of that down we're figuring it out as we go and the whole cost to acquire the customer and the lifetime value of the customer are two equations that we don't have forensically figured out I think the reality is Sean the proactive go get them leads wouldn't even be possible had we not poured the money into the content based MH yeah you know that's why the you guys were rightfully laughing at the books behind me when we had the video on earlier the only reason we wrote those books is so people would say well they are trusted advisers they know what they're doing and we offer a resource to the church at a very low cost and then when they need something they remember us and come back and I I don't know that our outbound sales team could do anything had we not done this first step that's a great point and then the thing that'll happen is you'll get the salese in that new environment will be like I'm killing it I'm so good and it's like well yeah and years so like right we're almost out of time William I'm sure we'll come back to this throughout the year but I got a listener question I want a real quick answer from each of you starting with you William what are you still doing that you kind of know in your heart you shouldn't still be doing right now um besides podcasts no no no no dealing with any part of the business that has to do with sales or operations and you are still involved yeah uh but we have a massive research project that is turning into a book that will come out likely the end of October and uh I need to focus every ounce of energy on getting that completed and getting the launch done right because I think it I think it could be I mean I don't want to overstate but I think it could be a game changer for us Sean what are you still doing that you shouldn't be doing it like just so much it we didn't need to even think about it for a while because we had such a good partner and then they really fell apart because I'm the most kind of technically Savvy person on the team I'm having to kind of vet new vendors and evaluate what's going on and figure out what to do and and just you know kind of being involved in that still is um it's a terrible use of my time but I don't really have a good choice that's a danger of having a little knowledge yeah I know how about you Liz I've talked a little bit about how our trash enclosures and our parcel bin you know have different rates of sales and so our parcel bin has never done nearly as well as the trash enclosure and so I've been whittling down the time I spend on it um but I'm really committing this year to spend less and less time on it unless I can hire someone to come in and work on it because I just I'm needed on everything with Municipal and cities are not buying package lockers at least not yet got it all all right my thanks to Sean busy Liz picarazzi and William Vander Bloon and especially to our new sponsor the great game of business you can learn more at Great game.com about what they do have a great week everybody wait wait don't leave yet if you have a question or a comment that you'd like the 21 hats owners to address send it to me by replying to your Morning Report or by email at Lauren 21h hats.com that's l o r n at21 hats.com do it now before you forget and don't be afraid to tell Jay what you really think you can take it and if you got something out of this conversation help us reach more business owners tell a friend subscribe and review us wherever you get your podcasts follow us on Twitter subscribe to the morning report at 21h hats.com this episode was produced by Jess dubron founder of blank word Productions okay now you can leave thanks for listening everyone hey [Music]