Jeremy Weisz 16:32
So in this situation, Peter, you and Ben initiated the shotgun to the other members who also owned this company.
Peter Palarchio 16:45
That’s right, so, NAV43 again, if we’re going to capital structuring was still incorporated separately. So even though it was part of a bigger agency, the capital structuring had always kept it separate. So that’s what made that.
Jeremy Weisz 17:00
And so NAV43 will pretend for this conversation. Let’s say now 43 really own the shares for you and Ben. So NAV43 kind of separated off once you did that. Shotgun,
Peter Palarchio 17:16
Yeah. And then again. So whatever time frame…
Jeremy Weisz 17:22
So really quickly on that, I’m interested in, so when you did this, do you then offer to buy or sell? Like is your initial communication, like we want to sell or, because they could have turned around either way and said no. So what was your initial conversation, like, of how you wanted, like, we want out, like you can buy us, or did you say we’ll buy you?
Peter Palarchio 17:48
We wanted to buy for sure, but we knew, again, you’re sitting there. This wasn’t because it was the best relationship going on at the time with the other partners. So it was a little stressful, in a sense that you might lose everything you’ve done. And I think in that sense, probably what protected us was the fact that digital agencies require a lot of technical expertise. And if you aren’t the technical person, you’re going to have to find a way to replace those skills quite quickly that, especially the band at that point, had brought to the table. So I think that probably protected us again. You have to figure out a number that you know is fair because you’re writing the check, you have to have the money, have to close on the deal. But if you’re offering a buck, the guy’s probably going to give you, he’s going to match you, you do have to be careful with them.
Jeremy Weisz 18:49
So you said, we want to buy this thing. And they turned around and basically said, no, but we’ll buy you for that price.
Peter Palarchio 18:57
No. So we said we want to buy out your shares. And they said, yes, so we were able to buy ourselves out.
Jeremy Weisz 19:02
Got it? Okay, yeah. So now you kind of are back to NAV43 in its own entity.
Peter Palarchio 19:13
And we were, and that was interesting enough. So that would have been around February 20, 2020, and we just wrote a check to buy ourselves out. And a month later, Covid happens, and half our clients pause. So that was interesting. At the time, though, even when we were doing this transaction, I had kind of talked to Ben that I was experiencing agency burnout, and I think if a lot of people know what that is, it can be exhausting trying to operate the multiple parts of an agency. And I said, I’m stepping back. I want to do some other things. So I did. So I have to give kudos to Ben that those initial days of Covid, I was acting more of an advisor and navigating us through everything and how things might happen.
The upside of that and the timing was we had actually released ourselves from duties from our office, so we actually hadn’t signed a new lease, so we didn’t have the challenges of a lease at the time. We have since gotten office. And then, although half of our clients, let’s say, paused afterwards, the upside of that timing was a lot of people needed an e-commerce and digital lead gen strat, so, but Ben was running shit. I went and started working on a few other things for sure. So I have to give kudos to Ben again, taking it over.
Jeremy Weisz 20:40
So how did you start that conversation? Because it’s a tough conversation. I know in my mind, it seems like a tough conversation to have that like, hey, I need to step away and do something else. Because, again, you’ve gone through a lot over, up to that point at least seven years, or something like that. How did you have that conversation?
Peter Palarchio 21:06
I think in two ways. One, it’s likely not possible if you’re not friends already, and I think that can make challenges to a partnership if you’re already friends, but I think sometimes it gets you through tougher times, because you never actually get too mad at each other anything along those lines, and you kind of still want what’s best for a friend, and they’re telling you that you’re stressed out. So I think that helps that you feel you can communicate quite openly with a guy you’ve known for a while. And then I think Part Two is there’s often differences between shareholders, employees and operators and comp package. So it wasn’t like I said I’m going to take a salary or anything along those lines. It was stepping back to being a shareholding board member, where Ben was acting as CEO.
Jeremy Weisz 21:50
I’m going to go leave, I’m still going to take half the salary from company, and there’s not the same, I guess there wouldn’t be like resentment, because it’s not like you’re taking something out of the company. You’re not doing anything. Because, I mean, technically, probably, if someone’s not on good terms and they own half the company, they could, I guess, argue for that in some fashion. Right?
Peter Palarchio 22:17
Again, going back to shareholder agreements and how you agree on employees and what’s a board decision or reserve shareholder matters very well could be again, I think being friends in that situation probably got us a little bit through and really helped out, for sure. But again, understanding what’s in those shareholder agreements can be really important, because if some person has decision making power on employment, well, that your partner could fire you from the company, and you’re still a shareholder. And at the end of the day, if Ben didn’t like it, we still, I think, have a buy sell. So he still has that opportunity if at any point he didn’t want someone around. And I still say it’s not like I was absent. In a sense, I would still be part of financial discussions, monthly meetings, acting as an advisor, helping where I can, and still referring business.
Jeremy Weisz 23:05
Are you thinking at that point, Peter, I am going to come back at some point?
Peter Palarchio 23:12
No, I was quite content and happy with Ben, running the agency. He was a CEO. He got through the challenges of early 2020. Turned it around. Was profitable and handing out dividend checks. Why would I ever go back at that time? Yeah.
Jeremy Weisz 23:32
So what did you often do?
Peter Palarchio 23:34
Consulting. Went into the consulting world and got more into what was initial passion of mine, which was finance, and started working on a lot of consulting in publicly traded companies and working with them and discovering investor relations and how my skill set of marketing could help publicly traded companies who often lack a lot of internal resources for marketing. How that can work out to get their story out a little bit more.
Jeremy Weisz 24:07
So then what brought you back?
Peter Palarchio 24:09
Consulting. It was lucrative, for sure, but I don’t know how many consultants might be listening to this. People don’t have to listen to you like they don’t have to implement your strategy. And as a consultant, you’re often not compensated for overall implementation. You put together really great decks, really great stories, really great strategies. But there were a couple things that I couldn’t get past. I think with maybe my past entrepreneurial experience was one not being the ultimate decision maker, and becomes a very tough pill to swallow when you’re very much used to things just happening, when you say they happen, and then realizing the importance of potentially, let’s say, even being assigning authority, especially as you’re bringing other people from your network to clients and they do work. Can need to be compensated for work or on time or those things.
It can be very challenging when you realize you’re not the one signing the checks. So consulting was a really interesting time. It’s strange. They’re probably the last person like you’ll never get fired. They love talking to you. They love your ideas. They are interested in your insights and your research and all of these things. But it became rather unfulfilling in a sense that you’re not seeing your ideas come to life, and things aren’t happening as fast as you’re used to as an entrepreneur.
Jeremy Weisz 25:38
Yeah. So there’s a frustration that this great plan is not getting executed on.
Peter Palarchio 25:44
That’s exactly it. And I think it became, yeah, I think a little bit unsatisfying in a sense, because you’re attached to your projects as a consultant, you want to see these go through. You’re getting face time with the executive team. You’re doing all these things, but you don’t necessarily control if you’re their top priority, or how your ideas stack up. So it almost felt like you had to sell through things constantly, just for good work to happen. And it became a little bit tiresome for sure.
Jeremy Weisz 26:16
So what point do you then go back and how does that conversation go?
Peter Palarchio 26:23
I said, Ben, we should go to cottage country this weekend. And we went, and there’s a great place, if anyone’s around Toronto, called Muskoka. We went on our Canada Day weekend, very close to the American listeners Independence Day, three days before. And I just kind of, we were just talking, and I just kind of said, learned a lot and the consulting world, especially on the b2b lead gen side of things, I was working with a lot of b2b companies also, and I felt like, why not apply all these things I’ve learned to our company and use my time to scale a company that I own rather than consulting on these companies. So the agency burnout was gone.
You found, I won’t say consulting ever burned me out. I would say, I don’t know if it frustrated me out the door of that world and then basically said, okay, like I want to come back in a full time capacity, which really would have been the first time that I had, and the first time that I said, hey, since we were in that little side house, we’ll say, hey, let’s put our heads down and let’s do this together and see what we can do, and challenge ourselves to scale up the right way and generate a proper inbound LEAD program and bring in the right clients and processes and everything we think we know how to do to scale up.
Jeremy Weisz 27:45
And what was his reaction?
Peter Palarchio 27:47
Sounds great like, I think he liked it, like the fact that he could have, again, another executive there, day in, day out. I didn’t say I was going to get involved as much with ops or delivery. I said, I want to work on overall corporate strategy and business growth and business Dev and branding and content and some of those things.
Jeremy Weisz 28:15
Talk about, you come on with this from a sales perspective, I know, talk about b2b sales, and some of the lessons and what you’ve learned there.
Peter Palarchio 28:27
Yeah, I thought I was fantastic at b2b sales until I started. I think maybe going through with some of our clients go through on all these great inbound leads we generate. So one of the first things we thought of is, well, we generate inbound leads for our clients all the time. Let’s apply some of that skill set to us. So I would say it started firing quite quickly. And we have, I think, what a lot of b2b clients face a large ticket item and consultative selling. There needs to be some education, and there needs to be some buy in without you’re not buying a product. You’re buying this imaginary service that is really going to help your business. So I think that is very different on an inbound form Phil of someone who may have seen an ad, who may have heard you on a podcast, who may have read an article on your blog because you’re ranking for SEO or local SEO, or whatever, those top of funnel tactics we’re using versus a referral, which is we grew a lot through referrals and agency partnerships.
So agency partnerships, whether it was white labeling or not, that was our big web dev agency with an Enterprise Client saying, These guys are really good at Site migrations. Use them. They’re really good at technical audits. We don’t do that. You need to use them. So that business was coming in, and then someone saying, Pete and Ben are the best at this. Don’t question them. Just go with that. So these people have already moved down the funnel quite a bit, right? Us, not realizing at the time it’s very easy with high insight to say, I was selling bottom funnel leads anyways. So obviously my conversion rate was good because I wasn’t moving down the first couple steps. So my whole life, I thought, oh, maybe I’m a 70% close guy like, I think me and Ben would laugh if we look at our forecast from a couple summers ago, what we thought our conversion rate was going to be.
So we lay down some strategy and go into Q1 and I generate 52 new inbound leads in 90 days, which was great. If you look at the ticket size of an agency, that is a lot of growth that you could have right there. I closed one of them, so that was 1.8% I believe. After those 90 days I said, something’s wrong, and maybe generating inbound leads, thing I’m going to pause on and learn about this wholesales thing. Maybe a lot of entrepreneurs out there in the same challenge, sales is as big of a skill as marketing. It’s as big of a skill as operations, finance, anything you do. And I was completely unaware of this. So I think that was really interesting in a sense of, I need to learn what this process is, and especially on a longer sales cycle. So, a good close for us, I think would be three and a half, four weeks. I have people on my board right now.
They’re eight months, depending on the size of the deal and the approvals required and who the decision maker and when budgets get released. So it’s very important, I think, to understand all of those tactics. And that was the grind, I think I didn’t expect of how much I had to dedicate myself to learn selling inbound leads.
Jeremy Weisz 31:46
So Peter, talk about some of the things you did to course.
Peter Palarchio 31:49
Yeah, right. Okay, let’s go. How do you course correct?
Jeremy Weisz 31:55
One out of 52.
Peter Palarchio 31:57
Yeah. So one acknowledge you have a problem? Yeah, no, I just passed it back to Ben, actually. So this is another thing I don’t want to deal with. Figure this out. No, I took it quite seriously. I think one thing first was acknowledging there was a problem. And I think the first thing I did was, who am I even selling to, who am I selling to? Who’s buying? What are their core desires, all of these things that we know as marketers and really developing my own personas. So we went back and we went back on all the years of history of every client we ever had, and we said, okay, who are our good clients? Right? Who were the ones that stuck around, who were the ones that saw the greatest results? And we learned for our free services and not necessarily being a true full service digital marketing agency, we worked best under digital marketers who needed specialists, who needed expertise.
That’s where we really fit in. So we created a persona kind of around that, and understood, you know, selling to them is completely different than selling to a business owner and how you handle those people. So we created tiers. So our primary tier was selling to digital marketers, or digital savvy marketers, right? That really understood the language we were talking. So there’s less education, but a lot of interest and their core desires were a lot different, but they stuck around with us the longest, and we could execute the best for them. Next obviously, the business owners themselves. You don’t want to always throw away business, so we kind of created some ideas about the type of business owners we want when we’re selling directly to founders, and there’s some qualifications there. And then our third tier, we still like our agency partners, we still will work with you, whether it’s a branding agency that needs SEO or web developers, or even larger digital agencies that need specialization.
So that was kind of first step of establishing that and then building a bit more strategic communication and realizing you sell to all three differently. There’s a different sales process for all three. Now that was the first realization, because now we’re like, well, let’s work hard on the ones we want number one, and position ourselves that way. But that still didn’t help me interact, and I was very fortunate that joined a really great digital entrepreneurship group, and I think it’s called rhodium network. I would you, I don’t know if any of your listeners. Chris Yates, right. Chris Yates,
Jeremy Weisz 34:34
Yeah. I was just emailing with him the other day, yeah.
Peter Palarchio 34:36
I almost want to keep it a secret, he’s created one of the best networks for digital entrepreneurs in the world right now, and it’ll stay that way because of Chris. He interviews everyone, and he’s done some really amazing things with me. Really vets the group, and it’s amazing the group of people he put together. We meet in person twice a year. But then we are also in a Slack group, and then you’re in subgroups within it, and I’m in a b2b group, but there’s content publishers, there’s e commerce people, so all incredibly intelligent people, and large and small people with massive exits, people just crossing a seven figure, mark all of these things, and he can put all these people together, and he has a really unique system of gives and asks. So I was going to my first retreat with them in Costa Rica, and my asks were all about sales, because I knew I had a problem.
So I underwent probably four sessions with some real top agency sales people, and they were able to identify very quickly my mistakes from experience, where they kind of said, hey, these are the things you’re doing wrong. And I will say this, one of the biggest things you’re probably doing wrong is being a know it all in your first call. No one likes that, and you’re such a subject matter expert, I’ve seen this exact e-commerce problem before, right? But it’s very unique to your inbound lead, right? You don’t know them, you cannot jump to solving their problem on the first call. So that was probably one of my bigger problems, that is creating a different sales process, and that first discovery call is just that you are asking questions.
Do not attempt to solve their problem on the first call. So people have really helped me with that qualifying leads for the people that are doing a little bit better is also just as important, knowing who you’re, as I said, all those three tiers of who my customer is, I had to realize who my customer isn’t. And feel free to start qualifying quickly, if you’re generating inbound leads, you have to have some immediate qualifiers because some things just won’t work out. So that was incredibly important, of getting that kind of sales coaching from people who do what I do. And then another thing that I really flagged was all, I was a boardroom guy before. I met people, I’d taken a note to dinner, so I’d done sales process like that, by default post-2020, every sales call has turned virtual.
That is, people are doing inquiries. They’re not coming to meet you. I’m not flying to New York. These are virtual sales calls, and there are some important tactics I think to do when you’re selling virtually as well. It’s a different environment. So I was fortunate enough to have a psychologist in my network who did an evaluation of all the trust factors of my virtual selling and gave me a bunch of great notes on the mistakes I was making and how important those first few minutes are. So that was also really interesting.
Jeremy Weisz 34:42
What were some of the things they said about selling virtually, and then how you can improve those factors.
Peter Palarchio 37:50
So just your overall setup, I think if you can improve your setup with lighting, eye level, all of those things are just those immediate trust factors that people are taking in. Eye contact is an incredibly strange one, because looking at the screen actually isn’t giving your client eye contact. You actually have to look into there to actually give someone eye contact. So that one is something you kind of would have never set up. How important the sensitivity, I mean, this one might be obvious to being on time in a virtual meeting is completely different than if someone rolled into a board room two minutes late, show up five minutes early, right and then truly let the person know you’re listening by asking the right questions and then the importance of your second again, not jumping to conclusion.
Don’t assume you know anything about these people. Their problems are very unique to them, even though you’ve probably faced it 200 times before. So that was, again, was something that was reiterated in this evaluation. And then I would say a book that I read was incredibly important, recommended by someone in my entrepreneurship group, SPIN Selling. I think maybe a lot of people have heard about this one. If you’re doing consultative selling, adopting some SPIN into your process will really help you out. For sure, understanding that these large ticket items take time, so going from discovery to offer presentation to negotiation to nurturing, and then now, especially, doing what we do, all those little bits in between, and really leveraging CRM tactics for nurturing and content education, I think understanding who the decision maker is off the get go, repeating things back to your prospect after your discovery session and immediately will invoke some trust. Right of saying, hey, remember these things we covered? Boom, they knew you were listening.
You’ve repeated these things. These are a lot of things that I think are really important, not we another one, I would say we do not really go too far now, without pitching decision makers or, like, getting some type of content. Interact with them. It is probably a qualifier of ours, because I don’t want to rely on what I’ll call the influencer to the sale to then sell me internally, because I think their studies, they will lose up to 50% of the things they said, and then objection handling and pre-call sales objectives really important. I think it’s like, if you look at sports or anything, the amount you practice right, really gets you good at something. If you’re not practicing before your pitch of what the objections are going to be, which you’ve already know, like, you’ve done this a million times, you can really figure it out and how to handle objections while you’re going in is incredibly important. If you’re not doing that, I think you’re hurting your own rate by 50% because they’re going to love everything you say. They’re going to agree that they need to make this change. Everything you’ve put is great. You have a bunch of great clients. Why wouldn’t they want to trust you? Right?
Well, ask them, if you had a pre call sales objective of saying, I’m closing this deal like we’ve done nurturing, we’ve done everything like what’s happening. My goal is to close that deal, and it didn’t close. You can’t leave without understanding why. You can’t say, oh, well, yeah, that sounds good. We’ll follow up. No, like those follow ups are going to get more spread out. It’s going to take up time. You can ask people, why aren’t you moving forward? And they’re not offended by any means, and they generally tell you, and then be prepared to understand why and how you can truly help them. So that was a very long process, and I hope some of these tips helped. There’s some other things along the way, but that was probably the biggest game changer in maybe my career.
That’s really helped me out quite a bit, because I’m still the same person. I still believe we do really great work. I always have, finding ways to effectively communicate that and close a deal is very important.
Jeremy Weisz 39:33
Peter, that was super valuable. I’m gonna have to re-listen to that. But just a quick sum up, being a know it all on the first call is a mistake, and then you’re really asking questions. Qualify leads. I want to dig a little bit more into that one, because he said, you want to pitch decision makers. So my question on that front, which I’ll get into in a second, is more like without offending the person saying, okay, like I don’t want to talk to you. I want to talk to the higher ups. I’m curious how you navigate that. But three selling virtually you talked about some of the trust factors, objection handling, why aren’t you moving forward, and some of those things people can do.
On the qualifying leads part, how do you navigate that piece to say, hey, like, you’re really not the person I need to be talking to, saying in a nice way and actually having it be effective? Because they may push back. Say, like, listen to CEOs. I’m sure you’ve heard all these objections, right? The CEO is busy. They put me in charge of this. How are you navigating?
Peter Palarchio 43:05
Okay, so first, be confident that you’ve won over this influencer, that they want to work with you, because otherwise, I think that’s important. Once you realize that the influencer is kind of giving you, they’re okay. And this is actually a new stage in my deal board, I actually have influencer buy in, and then decision maker buy in. I’ve added this to that. I’ve migrated to HubSpot. Also can say a lot of good things about them. I think for scale up brands, it’s a very good CRM, and they’re really doing some really great things. So that’s new on my board, is, once you realize you have that influencer buy in, I have a completely honest conversation with them about it, that I tell them exactly that. I’m like, like, do you think it’s best for us moving forward that I’m relying on you to sell my business?
And they look at you, they’re like, no, that sounds terrible. Like, well, why would I want to do that? I don’t want to be your sales guy, and they’ll find a way to make the time, and I have not, if I’ve gotten the influencer buy in since we’ve taken that approach, I’ve not actually had that objection that I can’t get in front of the decision maker, because they believe in you, and they’re like, yeah, you’re right. I don’t want to do your sales pitch. So and then, because otherwise, they just relay the objection. The decision maker relay the objection down to the influencer and oh, it’s not the right time. The influencer at the company isn’t trained in my objection handling. They can’t rhyme off the 10 case studies that I can do or how I can change on the spot.
If it’s a budgetary decision, I have the flexibility on addressing budget. Mr. Decision maker, well, what if we only charge you 50% month one to show you what we can do, or that flexibility to kind of get a deal done. So it just wasn’t worth going forward at that point, it was, you just didn’t hear it. And I think we all maybe know that in terms of procurement, right? Right, and agencies, sometimes it’s all right, I’m the decision maker. I’m going to hand this down to someone lower than me to go find three presentations, and I’m going to shop on price, and that’s not helping me either,
Jeremy Weisz 45:14
Peter, first of all, I have one last question for you. This has been a master class, at least for me and b2b selling so, so I appreciate you sharing this stuff. I’m curious your recommended tech stack. You mentioned HubSpot, so some of your favorites. And I do want to point one thing out, one thing what you said that stuck out, which is, don’t try and solve their problem. There’s one of my favorite videos. I don’t know if you’ve seen it. It’s not about the nail. If you haven’t seen it, I’m gonna put it in the chat here. It’s hilarious, but to me, anyways, so anyone’s listening, just Google. It’s not about the nail. YouTube video and watch it. It’s literally just the funniest thing about not solving someone’s problem. It’s funny.
Peter Palarchio 46:05
You don’t know them. I’m gonna have to add just one more person that really helped me. Sorry, my wife, if she decides to listen to this, I absolutely have to put her in this. My wife has been in sales her whole career, and has completely been sales trained and has helped me with my objection handling and probing and all that great stuff, and someone who I’ve bounced a ton of ideas off at home, being an entrepreneur who thinks you’re automatically good at everything, and not realizing the skill set they had was tough, built to swallow, but my wife was been amazing in her career, and it was a huge help too.
Jeremy Weisz 46:38
Well, Peter, promise me you’ll watch, it’s not about the nail with your wife at the same time. And then let me know what you think. Last question, tech stack, some favorite tech tools.
Peter Palarchio 46:48
So I’ve drank the HubSpot kool aid to the point that we become HubSpot partners. I was incredibly impressed how they’ve evolved, and now they do have, like, some startup packages, and there’s some pain points of, let’s say their pricing model, which they actually just changed, because it can be price prohibitive for startups. I consider it the best scale up CRM there, and this is me having evaluated a lot of them, us doing custom CR integration, CRM integrations for a bunch of clients. So if you’re a scale up, I felt that was the best one. It has probably the best native integrations to your other tech stack, because, let’s say, if you’re like me, and you have to do discovery, and there’s some work up front in that discovery to learn about your client that you have to sign to your team, right? Well, you have a PM tool. In our case, it’s ClickUp.
So we’re using ClickUp as our project management tool that’s client and internal projects. Direct integration with ClickUp, that if I move something on my board, will automatically create a task and assign it to the right person from my HubSpot notes, that’s a great example. Presentations, I think as recent as I think two weeks ago, where an influencer had brought me up to a sale, and I use Canva myself very handy. The moment he saw our title slide, he said, hold on, this looks really good. I’m going to go get my brother, who’s my business partner, just from the title slide. You could see the gear switch. So I think using Canva, uploading your brand in Canva, makes it super-fast to design really great presentations, so I’m using HubSpot once we get a lead, I mean, for generating inbound leads.
If you’re not leveraging content right now, and if you’re not leveraging the ability to create content across multiple platforms or content syndication, you should be leveraging AI in one way or another, I think for your social content strategy. Obviously, don’t advise the SEO and then content syndication through again Canva, the ability to resize things super quickly for your social content strategy and scheduling with later, it’s very easy. There’s a direct integration between later and Canva. So you’re scheduling all your social content, which is really great, and then HubSpot for nurturing, again, super important. I think that you, again, if you’re selling anything complicated that the user isn’t aware of right away, and they can’t make that decision, you have to enable them in some form of nurturing with that content of further, for example, if I’m talking about a technical audit, and there’s a 200 point checklist of point checklist that we do on their technical audit, nothing’s the same.
Have that automation and funnel within HubSpot of maybe that blog you wrote on technical audits, and have that automatically medically go to them, right? That’s a huge thing to do, that nurturing and that continuing education, and that will work, I don’t know how many times better than another follow up email. Educate them, continuing to create those educational processes. And then, yeah, I think when you’re closing the deal, we used to use programs like ignition for signing and servicing and quick QuickBooks integration. HubSpot does that. Now takes our deposits. We use Stripe, all those little admin things have just made my life a lot easier, leveraging that.
Jeremy Weisz 50:05
Peter, thank you, fantastic. Everyone. Check out nav43.com more episodes of the podcast, and thank you. We’ll see everyone next time. Thanks, Peter.
Peter Palarchio 50:17
Thank you so much.
