Ed Wenzel,
RedEye, Inc.
Fired By My Mother-In-Law…
I never went to college because I was more interested in goofing off and going to concerts. That is, until I met Tara. Within three months, we were engaged and I realized I had to do something to make money. Since I liked computers, I landed my first tech job a mere two months prior to our wedding.
Fast-forward a few years. I had two baby boys, a stay-at-home wife and a mortgage. I had visions of opening my own IT services business, but I was too scared. Instead, I went to work for my in-laws’ construction business. There were big dreams behind this move, but I found out quickly those dreams were in fact nightmares!
As many family businesses go, there was dysfunction. Money was severely mismanaged from the start. Tara was pregnant with our third child, and I got laid off for the first time ever…by my mother-in-law! Yes, it made for some rather awkward family functions. But in retrospect, it was probably the best outcome because it gave me the push I needed to chase my dream.
In 2005, I finally did what I should have all along. I opened RedEye with my business partner, Andrea. We figured we would simply place an ad in a local paper and get phone call after phone call of fresh, new business.
Waiting, Waiting, Waiting For That Phone To Ring
I can remember sitting by the phone, waiting for it to ring. Not joking. Of course, without marketing, it never rang. I also distinctly recall prepping myself to call a warm lead that a friend gave me. It took all day for me to muster the courage to make that single call Then I gave up when they didn’t call back. That’s right, I gave up after ONE phone call!
For over 18 months, I didn’t take a paycheck. Tara and I lived off of our savings for that time period. I just managed to tell myself to “quit tomorrow” every day. Tomorrow never came.
Like most of Robin’s clients, we grew by waiting for referrals. This model allowed us to grow for the first eight or nine years. We got to the $1.5M mark in 2013. The next year, 2014, was a pivotal year with annual revenue eclipsing $1.9M.
Still, we had ZERO recurring revenue. We were doing ZERO marketing and had ZERO sales pipeline. This made me a bit nervous, but through it all, we still thought we were doing AWESOME!
Our Nightmare Year Was A Blessing In Disguise
But 2014 was a tough year. Not one week after my mother suddenly passed, I got the news that our largest client, responsible for $365,000 of our annual revenue, was not renewing their contract. You know that nagging feeling we had about not doing any marketing. Yeah, THIS was the result.
I remembered an IT consultant’s description of “this redhead who only does marketing for IT guys like us. But I don’t use her stuff because I think it’s a bit goofy.” Interesting. So I reached out to Robin (the redhead) and bought the Toolkit. Then I proceeded to cherry-pick and send out a single postcard campaign to prospects. ONLY ONCE. Obviously, I got no results from that campaign, and I shoved the Toolkit under my couch.
When it rains… Shortly after purchasing Robin’s Toolkit, another one of our largest clients, a law firm worth $295,500 in annual revenue, suddenly FIRED US! We had never been fired before. It was devastating!
3 Hard Lessons That Cost Us 30% Of Our Revenue
Inside just a few weeks, 30% of our revenue had VANISHED! The cash-flow crunch didn’t hit until 2015, and then another large client went bankrupt. Goodbye to another $150K a year!
As devastating as it was to lose these clients and their substantial revenue, I knew if we didn’t change, the tidal wave of losses would grow even bigger. Here are the three lessons I learned after losing these clients:
Hard Lesson #1: Growing By Referrals Alone Catches Up With You. Owning and running a tech company while remaining a tech in the business is SUICIDE. Relying on referrals alone is dangerous because it leads to a feeling of complacency. Selling to a cold lead that’s NOT a referral punches you in the face HARD.
Hard Lesson #2: Stop Wearing So Many Hats. I knew I was giving myself too many responsibilities and was spread too thin. In the case of the law firm that fired us, I was acting as business owner, lead tech, project manager, vendor manager, account manager and system architect. Because I wore so many hats, I dropped a couple of balls. Big ones. They fired us and they should have. It was my fault and it made me sick.
Hard Lesson #3: Never Abdicate The Sales Role. While I was great at tech, I knew I STUNK at sales. So, in 2014, I tried abdicating the sales role. I thought I was being smart by hiring an outside salesperson to do everything. I was so wrong! In six months, we got just ONE meeting! I had to work on myself to become a salesperson.
A Fire Lit Under My Butt!
In November of 2015, I attended Robin’s Roadshow event in Newark, NJ. With a fire lit under my butt, I signed up for Producers Club! Now I HAD to be on Accountability Group calls, and I did NOT want to be that guy who shows up each week with an excuse as to why I did NOTHING.
We committed to a marketing budget of $100K, and I got to work! First, we edited and printed our Producers Club book. Then we set up our Online Shock-And-Awe presentation to deliver an amazing first impression before each sales meeting. Next, we marketed a referral contest campaign to our clients, started building our house list and “Robinized” our website to make it clear who we are and who we can help. We signed up for Robin’s Done-For-You Printed Newsletter, which we sent out to clients and new leads. We even created a marketing and sales process flowchart that continues to evolve to this day.
Marketing Works! $680K In NEW Revenue!
Our #1 goal was to replace the clients and revenue we had lost. One of our employees referred a failing IT business in Manhattan. Their clients had to go somewhere, so why not us? Through this opportunity, we replaced approximately $580K a year in lost revenue. Then, through LinkedIn prospecting, we landed a new client at $100K a year! That’s $680K in annual revenue, and we were just getting started!
We added value to our offerings by upselling most of our clients to higher-priced flat-fee contracts. This “low-hanging fruit” opportunity increased our monthly recurring revenue (MRR) from under $50K a month to $125K every month!
After attending Robin’s Rapid Implementation Workshop, we got very busy implementing tons of strategies and tactics. The results: we finally built a REAL pipeline just shy of $500K. Plus, we had gained confidence in everything we were doing!
Overshot Our Revenue Goal By 30% And Our Profits Up 50%!
Fortunately, RedEye and I achieved several important goals in 2018. First, I continue to work only four days a week, which leaves me considerable time to volunteer and be with family. Second, we continue to run the business with little or no debt. Third, we expanded our main office space by 100% in anticipation of growth.
Finally, and most important, our numbers exceeded our expectations. Our revenue goal for 2018 was $2.5M. We ended up at $2.826M, which is a 30% increase over our goal. Plus, our profitability was up over 50%!
Marketing And Life Lessons That Breed Growth
Since joining Robin and Technology Marketing Toolkit, I’ve learned multiple lessons that impact both my professional and personal life:
Lesson #1: Evolve And Grow. Complacency is dangerous and will bite you. You must always be in a growth mindset.
Lesson #2: Don’t Have A “Plan B.” Commit to your business and make small, incremental progress every single day. It adds up.
Lesson #3: Closing REAL Sales Takes Work. Closing deals through an actual sales cycle is MUCH HARDER than landing easy referrals. It takes practice, patience and acceptance of rejection. I had to accept this to enjoy the chase.
Lesson #4: Embrace Change. High-five fear. I had to fully step away from tech (something I was competent at) to work on sales (something I was awful at).
Lesson #5: Repetition Is Important. Just because you’ve heard it before doesn’t mean it stuck.
Lesson #6: Stay Humble And Never Stop Learning. Education is essential. The moment you think you’ve got it all figured out is the moment you fall.
Thank you, Robin, Rich, Jeff, Debi, Alison and the rest of the team! We are excited about the future of RedEye. We are now confident that we can add new business and not be held captive by fear of losing a client or two.
We finally feel a sense of freedom. I continue to work just four days a week and vacations are no problem since we have a great team who knows how to run the ship smoothly when I’m away. Our revenue goal for 2019 is a mind-blowing $5M! It’s going to be fun to see just how close we get!
