$100M Leads Audiobook Part 9 – Employees and Agencies Ep 594



In the podcast, Alex Hormozi discusses strategies for business growth through effective employment and agency use. Hormozi emphasizes the importance of hiring employees to manage the workload and scale operations, detailing a process for training new hires to become efficient lead generators. He reflects on past mistakes and shares insights on how businesses can utilize agencies for skill acquisition rather than long-term dependency. Hormozi provides a candid look into his own experiences, advocating for an approach where agencies are leveraged to teach internal teams, with a clear timeline and goal for independence. He also outlines criteria for selecting the right agency and encourages negotiation to align with business learning objectives. The discussion encapsulates Hormozi's belief in empowering employees and strategically engaging with agencies to build a self-sustaining enterprise that grows without constant owner involvement.

Summary Notes

Introduction to Special Edition Episode

  • The episode is a special edition titled "100 million dollar leads," a collaboration with "the game" podcast.
  • The host self-references with a self-congratulatory tone, indicating a solo effort.
  • Two main topics will be covered: employees and agencies, with a focus on how they can contribute to business growth.

Today I've got a special edition 100 million dollar leads episode, collaboration with the podcast the game. Myself and myself. A self high five, if you will.

The quote introduces the episode's theme and sets the tone for a self-reliant approach to the podcast.

Importance of Employees and Agencies

  • Employees are presented as an internal resource to help execute the "core four" business functions.
  • Agencies are external entities that can also execute these functions.
  • The host hints at a unique approach to utilizing agencies that will be shared later in the episode.

We're going to be going over employees and agencies employees so that they can help you do the core four for you, except on payroll.

This quote highlights the central role of employees in the business operations and introduces the concept of the "core four" tasks they help with.

The Core Four Concept

  • The "core four" is a term used to describe four essential business functions, which are not explicitly defined in the transcript.
  • Employees are seen as a means to execute these functions internally, while agencies can handle them externally.

Help you do the core four for you, except on payroll. And agencies are outside entities that do them for you as well.

The quote suggests that both employees and agencies are crucial for performing the "core four" functions, though it does not specify what these functions are.

Employee Recruitment and Retention Challenges

  • A new sales director does not see the need for changes despite failing to meet outreach goals for two consecutive quarters.
  • The silence in the meeting room indicates a lack of accountability and challenge to the status quo.
  • The discussion reveals a high turnover rate for sales representatives and inefficiencies in the hiring process.

No wonder we missed our cold outreach goal for the second quarter in a row, nobody challenged the failure.

The quote captures the lack of initiative to address the problem of not meeting sales goals.

Identifying and Addressing Hiring Bottlenecks

  • The hiring process is identified as a bottleneck due to a low hiring rate and high churn.
  • The HR director's agreement suggests recognition of the issue.
  • A solution is proposed to change the interview process to group interviews and prioritize candidates with good work ethic and basic social skills.

So it takes 40 interviews to get a single low skilled frontline worker? I guess so. Bingo.

This quote reveals the inefficiency of the hiring process, prompting the need for a new strategy.

Successful Implementation of New Hiring Strategy

  • The new group interview process successfully increases hiring rates and reduces turnover.
  • As a result, cold outreach sales double and make up a significant portion of total sales.
  • The core issue was not the method, skills, or offer, but rather the lack of personnel to perform cold outreach.

Within six weeks, hiring outpaced turned our cold outreach sales increased in lockstep.

The quote demonstrates the positive outcome of the new hiring approach on sales performance.

The Role of Employees in Business Growth

  • Employees trained to get leads can perform the same advertising tasks as the business owner.
  • Having more employees leads to more leads and less work for the owner.
  • Employees can transform a business into a self-functioning enterprise that grows independently.

How employees work lead getting employees are people who work in your business that you train to get you leads.

This quote explains the function of employees in generating leads for business growth.

Wealth Creation through Employees

  • Scenario one depicts a business heavily reliant on the owner's constant work, likening it to a high-paying job.
  • Scenario two presents a business that operates and generates profit independently of the owner, making it a valuable asset.
  • The transition from an owner-dependent business to an autonomous asset can significantly increase the owner's net worth.

For your business to run without you, other people need to run it.

The quote emphasizes the necessity of having others operate the business for it to become a valuable asset.

Misconceptions about Employees

  • The host reflects on past beliefs that no one could perform tasks as well as they could, leading to a counterproductive work culture.
  • Recognizing that everyone is replaceable, including oneself, is key to business growth.
  • Changing beliefs about talent and trusting employees can lead to more valuable use of the owner's time and attention.

If you want it done right, get someone to spend all their time doing it.

This quote represents a shift in mindset from doing everything oneself to delegating and trusting employees.

Acquiring Employee Leads

  • The "internal core four" is a concept applied to recruiting employees, similar to acquiring customers.
  • The episode suggests that potential employees can be reached through the same core strategies used for customers.

How to get employee leads. The internal core four.

The quote introduces the idea of applying core business strategies internally for employee recruitment.

Aligning Employee and Customer Acquisition Strategies

  • Equating strategies for acquiring employees to those for acquiring customers.
  • Warm outreach for employees is like asking your network for customer leads.
  • Cold outreach is akin to recruiting or seeking new customers.
  • Posting job openings is similar to posting content for customers.
  • Paid ads for job postings can be paralleled with promoted content for customer acquisition.
  • Employee referrals mirror customer referrals.
  • Affiliates are likened to associations, guilds, and listservs.
  • Agencies are compared to staffing firms in the context of lead generation.
  • The goal is to create reliable processes for both acquiring customers and employees to scale a business.

Warm outreach equals. Ask your network cold outreach equals recruiting. Posting content equals posting job openings paid ads equals promoted job postings customer referrals equals employee referrals affiliates equal associations guilds, listservs, et cetera. Agencies equals staffing firms employees equals employees because those are the same thing.

This quote outlines the parallels between methods of acquiring employees and customers, emphasizing that the underlying strategies are fundamentally the same.

Training Employees to Generate Leads

  • Hiring cost-effective employees who can generate leads is crucial.
  • Training employees is the next best option if hiring experienced lead generators is not affordable.
  • The three-step training model: Document, Demonstrate, Duplicate.
  • Creating a checklist of steps and refining it through observation and practice.
  • Ensuring clarity in instructions so that even a stranger could replicate the results based on the checklist.
  • Simplifying steps and avoiding confusion in training.
  • Distinguishing between competence and performance.
  • Focusing on following directions rather than immediate results.
  • Providing positive reinforcement and avoiding punishment during training.
  • Retraining employees when there's a dip in performance.

I think about and actually approach training with this three DS mental model document demonstrate duplicate here's how it works. Step one document. [...] Step three, duplicate.

This quote explains the three-step training model used to ensure employees can effectively generate leads by documenting the process, demonstrating it, and then having the employee duplicate it.

Calculating Returns from Lead-Generating Employees

  • Calculating the cost of lead generation by employees involves dividing total payroll by the number of leads.
  • Assessing the cost per lead and comparing it to the customer acquisition cost (CAC) and long-term profit (LTGP).
  • Example calculations demonstrate the profitability of lead generation without paid ads.
  • Applying the same mathematical approach to any advertising method.

Get total payroll divided by total engaged leads equals cost per lead. [...] We make much more than $3.33 per lead, so we're profitable.

This quote details the formula for calculating the cost-effectiveness of employee-generated leads and provides an example to illustrate profitability.

Maximizing Returns by Focusing on the Right Employees

  • Comparing CAC to industry average to determine if it's reasonable.
  • Diagnosing sales vs. advertising problems by assessing if engaged leads are qualified and have the funds.
  • Not misattributing problems between sales and advertising departments.
  • The importance of understanding all costs associated with customer acquisition.
  • Ensuring costs are at most one-third of the profit over the customer's lifetime.

If your CAC is more than three x industry average. Then you have a sales problem or an advertising problem.

This quote emphasizes the need to diagnose the root cause of high customer acquisition costs and the importance of distinguishing between sales and advertising issues.

Conclusion: Training Over Talent

  • The chapter aims to shift perspective on the importance of advertising and selling the company vision.
  • Highlighting the importance of training employees effectively over choosing inherently talented individuals.
  • Stating that anyone can be taught entry-level jobs, and the focus should be on training.
  • Emphasizing that determination ("guts") is more critical than intelligence for advertising roles.

It's your job to advertise and sell the vision of your company. [...] So who you pick is not as important as how you train the ones you do.

This quote concludes the discussion by reinforcing the idea that effectively training employees is more crucial than their initial skill level or talent in the context of advertising and lead generation.

Entrepreneurial Mindset and Employee Training

  • Entrepreneurs often have an "iron will" derived from life experiences.
  • These experiences can be shared as lessons to help others succeed.
  • Training and giving individuals a chance to succeed is essential for knowledge acquisition.
  • There is a surplus of labor for entry-level positions.

"So if you have an iron will, and as an entrepreneur, you probably do, it won't take long for you to figure out that you got it from your life experiences."

This quote emphasizes the connection between an entrepreneur's determination and their life experiences, suggesting that these experiences are valuable teaching tools for others.

Hiring and Investing in Employees

  • Be selective when hiring for high-investment roles like C-suite positions.
  • Initially, it's more efficient to hire and train anyone willing to learn.
  • Identifying and rewarding high-performing employees is crucial.
  • Employees are powerful allies in generating wealth and leads.
  • Building a system to maintain and increase lead generation is vital.

"Massive investments in hyper specific multiple six figure C suite employees, et cetera, aka fancy employees."

The speaker is advising to be discerning when hiring for expensive, specialized roles, indicating these positions require significant investment and should be filled with care.

Utilizing Agencies for Business Growth

  • Agencies can be a shortcut to business success if used correctly.
  • The speaker has spent substantial funds on agencies and has learned how to create a mutually beneficial relationship.
  • Agencies have contributed to the speaker's business breakthroughs.
  • The speaker is offering additional training on the topic through their platform.

"Yes, you can pay people to shortcut your path."

This quote acknowledges that hiring agencies can accelerate business growth, suggesting that agencies can provide expertise that entrepreneurs may lack.

Personal Experience with Agencies

  • The speaker shares a personal story of needing to upgrade marketing skills.
  • Initially hesitant due to high costs and horror stories, the speaker found a workable solution.
  • The speaker learned to run Facebook ads proficiently through one-on-one coaching with an agency professional.
  • The experience demonstrated a more effective way to engage with agencies.

"I asked the second agency owner for what I really wanted. Can you just show me in a few hours how you'd run my ads on my account?"

The speaker sought a hands-on learning experience rather than a full-service solution, highlighting a proactive approach to mastering a new skill.

Agency Engagement Strategy

  • Agencies are service businesses that specialize in lead generation.
  • The speaker had a successful first experience but faced challenges with subsequent agencies.
  • A pattern of diminishing service and results was identified with other agencies.
  • The speaker eventually learned how to use agencies effectively by changing the approach.

"Step one, they got me excited about all the new leads they would bring."

This quote introduces the typical process of engaging with an agency, starting with the promise of new leads, which sets the stage for the speaker's later experiences and insights.

How to Use Agencies Effectively

  • Agencies should be used for learning new methods and platforms.
  • Hiring an agency can be a strategic investment in acquiring skills and avoiding common mistakes.
  • The goal is to quickly move to the profitable part of the business.
  • The chapter aims to teach the reader how to hire and use agencies correctly.

"Hiring an agency is all about investing in important skills you can't really learn anywhere else."

The speaker views hiring an agency as a strategic investment in learning, rather than just outsourcing tasks, indicating a focus on long-term skill development.

Utilizing Agencies for Business Scaling

  • Agencies can be leveraged to scale a business effectively.
  • The appropriate time to start looking for an agency is once there is sufficient funding.
  • Establishing a relationship with an agency should involve a clear purpose and a set deadline.
  • The speaker advocates for a learning-oriented approach when working with agencies.
  • It is recommended to transition from a full-service agency to a consulting arrangement once internal teams are trained.

"As soon as you have enough money for a good agency, start poking around."

This quote emphasizes the strategic timing for seeking an agency's services, which is when the business has adequate financial resources.

"I start every agency relationship with a purpose and a deadline to fulfill it."

This quote highlights the speaker's methodical approach to working with agencies, focusing on goal orientation and time-bound objectives.

"I'll start training my team on it, and once they can do it well enough, I'd like to change to a lower cost consulting arrangement."

This quote outlines the process of internal team development and the eventual shift to a cost-effective consulting relationship with the agency.

Agency Selection Criteria

  • The speaker shares criteria for choosing the right agency.
  • Good agencies are identified by their reputation, client results, and operational processes.
  • A checklist is provided to evaluate agencies, including factors like waiting lists, sales processes, and transparency.
  • The importance of being an informed customer is stressed, suggesting to talk to multiple agencies before making a decision.
  • Positive agency referrals are considered valuable.

"Here's what I look for. One, somebody I know got good results working with them."

This quote lists the first criterion in the speaker's checklist for selecting a good agency, emphasizing the importance of proven results.

"They are expensive. All good agencies are expensive, but not all expensive agencies are good."

This quote conveys the idea that while quality agencies tend to charge more, high costs alone do not guarantee quality service.

Agency Engagement Strategy

  • The speaker shares a strategic approach to engaging with agencies and internal team development.
  • The method involves hiring agencies with a clear agreement framework and learning from their expertise.
  • There is an emphasis on setting clear deadlines and using both agency and internal teams simultaneously.
  • The goal is to surpass the agency's results with an in-house team and then reduce the agency's role to consulting.

"Use the agreement framework I outlined."

This quote refers to the speaker's recommended structure for establishing terms with an agency.

"I can get my team as good or better than an agency in six months or less."

This quote reflects the speaker's confidence in training their team to match or exceed the performance of an agency within a relatively short timeframe.

Agency's Role in Learning and Profit

  • The speaker acknowledges the value of agencies in acquiring new skills and contributing to profitability.
  • The process of learning from agencies is seen as an investment that yields long-term financial benefits.
  • The speaker shares their personal success in reducing the time needed to train their team to outperform agencies.

"It cost me 8 hours and $6,000 to learn a skill that's made me millions."

This quote illustrates the return on investment from spending time and money to learn from agencies.

"The better you get, the cheaper it becomes and the more money you make."

This quote encapsulates the concept of improving efficiency and profitability through experience and skill acquisition.

Next Steps and Future Topics

  • The speaker outlines actionable steps for businesses considering using agencies.
  • A checklist is provided to guide businesses through the process of agency evaluation and engagement.
  • The speaker hints at the next topic of discussion, which will focus on affiliates and partnerships as a strategy for business promotion.

"Decide if using an agency makes sense for you right now."

This quote prompts businesses to carefully consider their current situation before deciding to work with an agency.

"Next episode we have coming up is going to be affiliates and partners."

This quote introduces the upcoming podcast episode's theme, indicating a shift in focus to another aspect of business growth strategies.

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