How to Decide What to Pay a Closer

0:00questions about their success rate. >> Yeah. >> Tabernacle, >> [clears throat] >> um need your insight on I feel like our CAC is directly connected to our LTV because we pay commissions. And I want to see how I can I feel like the higher our LTV goes, the higher the >> [music] >> CAC will be because we pay commissions. How do I escape that? >> You can control you can control for the other part. So, everything else is associated with generating the lead outside of closing it.

0:26Um so, that that's only true if you have a percentage-based commission on a sale. Like if you have flat commissions or scaled commissions or you just don't sell via sales team. Like all other businesses like that, the cost is going to be the team plus media spend and software divided by number of customers, right? And so, if you look at that equation, are you uh are you like a self-gen company? So, do you do like solar or something like that?

0:51>> Home services, roofing, yeah. >> Yeah. So, with self-gen, um it's interesting cuz it's I mean, there's basically zero risk. Like they're either not a customer or they're a customer. So, you don't really like front anything. Um but the guy like a a buddy of mine just sold his company for 50 million who's who's in solar. And for most of these home services or like real estate like most companies extend LTV by simply vertically integrating.

1:22And then the front-end salesperson doesn't necessarily get a taste of all the additional pieces of the value ladder. And that's that's kind of how they they scale it up. And even if they do, you can still scale down commissions based on So, I'll I'll tell you guys a a quick thing on how I think about commissions. So, I think about commissions based on the skill of the person required to do the job. >> [snorts] >> And so, a big function of that is what level of training already exists within the business and how much of a process is there. And so, on one extreme, you have something where someone has to come in with a ton of skills, a ton of experience, and there's almost no structure.

1:58Well, that person I've got to pay a lot of money to do the sale. Now, if someone comes into an absolute machine, I can take someone off the street and in, you know, 30 hours, I can get them closing at within 20% of the top guys, then I don't need to pay that person very much at all because what skill is required to bring someone off the street? Not a lot. And so, it's really thinking about it from a marketplace perspective of skill versus compensation to attract the talent. And so, I back into how skilled of a person do I need, which is why I'm so big on sales process because it improves my margins if I can make the process so easy anyone can do it, which means that I can pay anyone to do it, but then I get really good people on a really good process, and then just murders.

2:39Does that make sense? >> Absolutely. >> If you like this video and you're business owner who wants to break through your current revenue ceiling, I distilled every lesson from scaling 10 businesses past 10 million and three businesses past 100 million into a completely free scaling roadmap that I've used to go from zero to one, zero to 10, and zero to 100 plus. And so, you can click here and you can check it out. Again, absolutely free. And since you're business owner, I appreciate you and enjoy.