Many think that CRMs are the real deal when it comes to managing relations with potential customers, but this is not all true. In today’s episode, Mitch Russo and Adam Honig, the CEO of Spiro.ai, talk about how Adam’s software is thriving in the industry and putting CRM in the back room. He walks us through what it does, how it functions, and their revenue generation activities. Describing their incredible tech, he also shows us how a great sales process is done alongside cold calling. If you want you and your team to grow at what you do every day, be sure to tune in to this episode.
Spiro: Breaking Free From CRM With Adam Honig
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Now, onto my guest and his incredible story. He graduated with a degree in philosophy and took his first job at a consulting company. Except, he sucked at the consulting but discovered he was great at connecting and communicating with others. This led him to sales just as it did for me early in my career. The pain of the sales process drew him away from selling and instead helping others make their sales teams more effective. Using what he knew about the process, he started a company. It was later acquired by Accenture after becoming the seventh-largest Salesforce consulting partner worldwide.
Life was about to change in a very strange way and it came from watching a movie. That movie was called Her. It was all about the future of AI where a computerized bot helps the protagonist navigate the world with help and advice. That was the moment when he realized that this would be what his new company would do. After trying aimlessly, he could not sell a single corporate license. He started again from scratch to build what has now become their core mission, killing CRM.
Welcome, Adam Honig to the show.
Thanks, Mitch. It’s great to be here.
My pleasure. Killing CRM, I sure love hearing that. I hated CRM even though I ran a CRM company early on in my career.
CRM has been around since the ‘90s and it’s not loved at all by sales people. As a matter of fact, I was speaking with a sales leader and he told me that his CRM was having a part-time job for everybody. It was just extra work. Another guy I spoke to told me that his CRM made him feel like he was in a bad relationship. All it did was take and it didn’t give anything back.When it comes to cold calling, the more salespeople do it, the more they do it! Click To Tweet
That’s a good example. I hadn’t heard it put that way before, but you’re right. Before we get into CRM and how much we collectively hate it, let’s get into you and your background. I described a small picture of what you went through, but I’d love to hear from you. How did all this start for you?
You had mentioned my last company, which I had built to be one of the largest SalesForce.com consulting partners. I started that company around 2004. It was a long journey and along the way, we had worked with great clients like MetLife, Charles Schwab and Bo’s. It was big companies, small companies and all kinds of different companies. We were there to help them get SalesForce.com up and running and working for their organization.
The way that that would typically go is that the leadership would want to know what the sales team is doing, so they’d put Salesforce in to get that visibility. The sales team themselves would be pretty unhappy about it. We’d have to work super hard to try to get them to use it even a little bit. As a matter of fact, we had one large medical equipment company who after spending $3 million in consulting alone to put Salesforce in, only 18% of people logging into using it. The answer for these guys was to spend even more money on consulting to drive the adoption up, which we eventually did.
It gave me this weird feeling. Companies are spending all of this money, I’m doing well for it and people are hating it. What kind of life is that? It was good in the sense that we built a successful company, but it was hard in the sense that we were pushing something that was not well received. Often, I draw a chart that on the X-axis is how much money people are spending and on the Y-axis is how much people are hating it. CRM was in the top right quadrant. It made me feel like I was pushing something wrong.
I wound up selling the company, which was great. I’ve always been a big movie fan and I went to go see the movie, Her. This movie changed my life. Here’s what happened, in case the reader hasn’t seen it. Joaquin Phoenix downloads a new version of his phone software, played by the voice of Scarlett Johansson. She does not appear in the movie, only her voice, but even that is enough to make Joaquin Phoenix fall in love with her. He falls in love with her because she learns everything about him by being his phone. She’s seeing everything that he’s seeing, listening to all of his conversations, and knowing what’s going on. She gives him advice like she tells him what to get his mom for her birthday. It’s a wonderful story. It gets a little bit weird.
I’m watching this movie and thinking to myself, “This is what sales people need. They don’t need Salesforce. They need Scarlett Johansson telling them what to do all day.” I called up Andy, who’s my long-time business partner and Chief Technology Officer here at Spiro. I said, “Andy, we’re going to build Scarlett Johansson for Salesforce.” He was totally confused. He was like, “I do not know what you’re talking about.” Andy’s such a great guy. I’ve worked with him since the ‘90s. He’s from Venezuela, originally. He didn’t understand what I was saying, but we got together.
The original concept for Spiro was to build a bot that sat on top of SalesForce.com and sucked all the data out of Salesforce. That’s a technical term. It would use the data to make recommendations about what sales people should do. We launched it for free and within a year, we had 15,000 free users on the platform. If anybody reading was an early Spiro user, I want to thank you. We trained all of the AI on everybody’s data with their permission and it helped make the product work well.
As you mentioned, we went from a free product. Now that we’ve got 15,000 people using it, we’re going to start charging for it. We were not able to make that happen. I think that there are a couple of lessons to be learned from that. People don’t expect to be paying out of pocket for corporate tools. In my view, I’m totally wrong. One of the things about being an entrepreneur is if you’re not wrong a lot of the time, you’re not doing it right.
One of the things that were wrong was that we thought people would just expense it. That business model did not work at all for us. We had this great recommendation engine that would learn from data and advise sales people on what to do. What the four of us decided to do instead was that we were going to attack the single most successful software company in the history of the planet, Salesforce. We were going to build our own sales platform and go after them. That’s what we wound up doing.
We built our own sales platform. We decided it couldn’t be CRM because everybody hates it. We needed to be more than CRM. We built in all of these other things with it that automatically analyze phone calls for people, transcribe them, take the ideas out of them and summarize them in notes. We built it so that it could read emails and give people feedback on what they should do next and all these other stuff that would never be part of a traditional CRM platform. We relaunched the product around 2017. Fast forward, we’ve got about 45 employees and 200 customers here at Spiro. We’ve raised $9 million in financing to date and successfully pivoted the companies into a completely new space with the mission to kill CRM.
Because this is a new concept, I’m going to ask a little bit about execution. First of all, I have never seen the product so there are parts of it that I want to get clarified. What you’re doing then is like a CRM system. You are managing the flow of leads for live sales people, for people who are on the phones. In that process, you’re collecting data based on activities that they need to perform or the next steps for different clients. The software is constantly logging what’s happening. Is it doing any form of audio translation? Does it create some form of logs based on the audio itself or does it require prompts from the user?
No. Let me answer your question this way. What Spiro is doing is natively integrated with everybody’s email, so it gathers all of that information. It reads the email and uses something called natural language processing to understand the content of the email. It also comes with a built-in phone system. It can enable you to make calls right through Spiro on a mobile phone, desktop or connect to your existing phone system. It listens to those phone calls and transcribes it. I call you in Spiro. It listens to the phone call and it puts the transcription into the timeline of our interaction history.
That’s not all. Because this is a sales platform, it’s looking for the things that you’ve promised customers or prospects that you’re going to do. It looks for all of those next steps, highlights them and reminds you to do those things. It also allows you to tag certain keywords in it so that you can be notified if something is going on in a conversation that you’d like to learn more about. That’s a little bit more detailed than what you asked but I think it sets the stage well.
That’s good because I wasn’t sure until you explained it. That makes a lot of sense. It is in fact, AI. It’s creating an environment where it learns as it goes along what it is that you need and how to respond.Artificial intelligence requires a lot of data to work properly. Click To Tweet
That’s absolutely true. It learns a company’s sales cycle. It will say, “You forgot to call John,” because it knows that you need to touch a prospect every 3 or 4 days in your business, and you haven’t done that.
What it comes down to is helping sales people get on the phone, make more calls, have the right information necessary for every call that they’re making and respond by creating or setting up the next step in the sales cycle for the sales person themselves.
It helps people be more productive because it self-organizes. When I was in sales, I would come to the office early every day and make a list of every person I needed to call and everything I wanted to achieve that day. I was disciplined and was able to succeed in part because of that structure that I put in place. Part of the idea behind the software was how to get the software to do that for you so you don’t have to spend your time thinking about that. You can spend your time reaching out to prospects and customers and have those meaningful conversations.
If somebody reading this right now says, “I’d sure love to have that in my company,” what does it cost? Give me an idea of what the pricing looks like.
We charge on a per user basis. A subscription for one sales person is around $1,000 a year. We do have a minimum number of people from a company that we need to have on the platform to make sure that the AI works properly. It’s a purchase of anywhere typically from $10,000 to $50,000 for a company.
I’m going to make a bold assumption here and say that most of my readers are not going to be able to afford your software. I don’t think they have a large enough company to support that type of expense. Although maybe if they had your software, they would be able to. Are there plans to go forward with a more consumer or small business-oriented version?
Not at this time. I’ll tell you why. The thing about artificial intelligence is that it requires a lot of data to work properly. If you have a sales team of ten people, there’s enough data in that for the product to learn reasonably quick. If you only have 1 or 2 sales people, I’m not sure it’s going to work as well. It’s important for us to deliver a high-quality product.
Let’s take a step back here. Adam, you have a lot of experience in selling, sales teams and training sales people. What would you say is the greatest challenge a sales person has, particularly if they’re in an environment where there’s a lot of pressure and they have to close deals?
Every environment now is that way. Who’s working at a company where they don’t need to close deals? Whether it’s the owner-founder or a sales team that’s doing it, for me, the biggest challenge is often to get people to make more calls. It’s so easy to send an email or do something else besides picking up the phone and making a call. If you make more calls, it doesn’t necessarily mean you’re going to make more sales, but I guarantee that if you make fewer calls, you’ll make fewer sales. Our big focus and a lot of the work that we do is how to overcome that issue.
What do we do? This is your time to help us understand how to improve our revenue generation capabilities. How do we do that?
There are a number of techniques that people can adopt on their own or with the help of software like Spiro that might help give them a step up in that. One of the things that I definitely recommend is getting super organized. Sales people or people who work in sales need to have a mindset that they need to be prepared to make phone calls right away when the day starts, whether it’s 8:00 or 8:30 AM, whatever time it is for your business. That means putting in the time either the night or the morning before and getting ready to hit the phone. Who am I calling? What am I going to say to them? What’s the specific outcome that I’m trying to achieve by doing this? You don’t have to be wasting time by getting organized during prime time to catch people. You need to do that ahead of time. That’s the first thing
The second thing is that I like to block my calendar for prospecting. The best time to reach people statistically is between 8:00 and 10:00 in the morning and between 4:00 and 6:00 in the evening. If you’ve got meetings or other things that people need to do, schedule them at different times of the day so you’re not focused on those hours. The third thing that I would do might sound a little funny. The best way to make more calls is to make more calls. A lot of studies have looked at call resistance, which is the fear of picking up the phone and doing it. They show that the more that people do it, the more comfortable they get and push through with it. A lot of us are perfectionists and we like to succeed. You have to realize that going into the first couple of days of making phone calls might not go so great. That’s okay because you need to get used to it and get a rhythm. If you’re not doing it regularly, you’re never going to get into that rhythm.
One thing you said was to get organized. In my experience, the way I get organized is by using a software. I don’t ever try to do it without software. There are so many great systems out there that are very low cost. For individuals who are trying to close deals, you could use Zoho, Nimble, and all these different great products that have the ability to queue up your next person to schedule follow-up calls and help you organize your day as you get into the office. Maybe it would reduce the amount of time you spent the night before. Have you used those products or are those the ones you’re talking about that everyone hates?
I don’t want to call out anybody in particular whose products are terrible and old fashioned, except for Salesforce. We have a lot of customers that used Google Sheets earlier in their customer journey. Monday.com is another popular platform that’s super easy to use. The problem with CRM is that it’s complicated, especially for smaller businesses. I had lunch with a gentleman who started up a company and had four employees. I had to tell him Spiro wasn’t right for him. He’s using HubSpot CRM. He’s like, “I need to load all this data, set up companies and create a sales process.” I’m like, “You put it all into a sheet and make phone calls. Don’t worry about all that stuff.” Whatever you use that you’re comfortable with is great but don’t overcomplicate it.Salespeople are just not that great at complicated things. Click To Tweet
HubSpot, for example, is a fairly integrated platform. They have a free version. People could get started with it, but it gets expensive quickly. That’s the only downside of HubSpot. That was my experience anyway.
It gets expensive quickly and it’s complicated. I’m a sales person at heart. Sales people are not that great at complicated things sometimes. We’re good at talking to people.
I totally agree. That’s why we’re all looking for that edge. I realize that Spiro is not going to be a fit for most of my readers who are under ten people. The thing is that these habits become essential to growing a company. It’s picking up the phone, calling every day and mastering the mindset required to push through the disappointment of hearing no. That’s the fundamental skill that most sales people need.
What I’ve learned in my career in sales is that there’s one thing that definitely helps with that, and that’s humor. We’ve spent a lot of time laughing it up in Spiro. Each week, all the sales teams come together in a meeting. We bring our worst sales call that we can all listen to and we laugh about it because it’s the only thing you can do. If you were hitting 2/50 as a sales person in your win rate, you’d be in the hall of fame because the overall win rate’s way lower than that.
We used to do the same thing. Every week, we would pick the worst call and we would play it for the sales team. They were always funny and they’re usually from the newer people. After we would laugh, what we would then do is turn that into an incredible training opportunity. We used to call them tune-ups. The person that we tuned-up invariably increased revenue by 30% the following week just by getting the tune-up. It became a contest of who can get a tune-up this week because everybody wanted to increase their sales. What we tried to explain is that what we’re tuning this one individual up on is the same thing you’d get tuned-up on as well if that was your call we were playing. You’re right, humor is great. Tell me about the funniest call that you can remember.
The funniest call I ever did was a straight-up mistake. I was going through my list, calling people, and got John on the phone. I was excited because he was a hard guy to get ahold of. I’m talking with him and halfway through the conversation, I realized that I had the wrong John Murphy. I live in Boston and I know sixteen John Murphy’s. We’re working this one deal with John Murphy and I called this other John Murphy. Everything was great. We had the rapport and he was feeling good about everything we were doing. I don’t want to say the word that I said to myself, but it wasn’t a good one. I was embarrassed with myself. The worst part is that I’m on the phone with this guy and I can’t just be like, “Sorry, I meant the call the other guy.” I was stuck. For me, that was pretty funny and embarrassing at the same time.
It’s a great story nonetheless. At least you got a good story out of it, right?
Let’s talk about sales management. We have a team of 3 or 4 people. Now, the team’s a year old. We’ve had a turnover. We put together some great training material that’s on video and in our training learning management system. We’re still not reaching the level of sales that we’re interested in reaching. What would you talk about in terms of helping the team grow their revenue or make more money simply by improving what they do every day?
In this scenario, I would be looking to break down the sales process and determine the hitches. Think about a lead that comes in as an early-stage prospect, to giving a proposal, to closing a certain percentage of them. If you think about that as a series of steps, you’re going to expect a small percentage to go forward from each step. Where is the problem? Is it that you’re not closing enough of your deals? Is it that you’re not giving them enough value in the sales process to make them want the proposal? Are the leads bad that they’re coming in and they’re just not qualifying at all? If you look at that model and you map it across your 3 or 4 sales people, you’ll see some interesting patterns. Some of the sales team are better at closing and some are better at qualifying people. If you can learn from that kind of analysis, you might pick up some tips that can help across the sales team.
The other thing that you might learn is that you need more of a segmented sales team. This is becoming much more popular. Instead of expecting one person to do everything right from lead to close, can you have specialists who are good at qualifying, getting people excited and hand them off to the closer? Do you need to bring a more technical person if you’ve got a technical product? Breaking it down and looking at those metrics will give you the first step to figuring it out.
What we went through early in the 1980s, we experimented with breaking up the sales process into two pieces. We had appointment makers and closers. Initially, it worked great. What started to happen was that the appointments setters were setting appointments, but the closers were disappointed if they didn’t close the sale, blaming the appointment setters. We had fingers going in both directions. They said, “If you don’t like the appointments, go generate your own.” That broke the whole model. Sometimes you’ve got to take a deeper dive into the process and find these things like you described.
One of the problems that we’ve always had, and I’ve had in every company that I’ve ever been to, is how to generate high-quality leads. Maybe Spiro can help sort that out down the line when you get to 10, 12 or more people. For a small company, you are doing anything to generate leads. How do you make sure they’re high-quality leads? Do you use any form of screening person or system to determine that in advance?
I’ve worked at three companies that had one employee, me, and started from scratch. The challenge is when you’re small, you need business. You’re going to look to do business in any way with whoever you can find and so on. Paradoxically, what you need to do is get much more focused. A friend of mine, whose name is Christopher Lochhead, wrote a book called Niche Down. It’s all about getting micro-targeted on that first set of customers that you’re going after. For example, we’re not for everybody so try to get focused on the people that you’re a good fit for.Give enough value in the sales process so that your leads will want your proposal. Click To Tweet
The first thing you need to do to qualify well is to know exactly what those criteria are. I’m looking for retail stores that have this kind of footprint that are in this location. Those are the guys I’m going to go after and you can tailor your pitch to exactly those people. If it’s small stores and Walmart is calling you up, you might get excited about it, but it could take you a year to deal with them and go nowhere. For me, qualification is about knowing what you want first and then being able to map how to I get that.
Readers, we are talking to Adam Honig. He is the CEO of Spiro AI and has been describing the incredible technology that his company has developed. He’s giving us an incredible overview of how a great sales process should be run. Adam, we have reached a point in our interview where we stop and talk about you. We’ve talked about Spiro, your process and your journey to get here. Sometimes readers like to know what you think about. One of the ways that we like to draw that out is with a question. Here’s the question. Who in all of space and time would you like to have one hour to enjoy a walk in the park, a quick lunch or an intense conversation with? Even the future, and I’ll even say any dimension you choose.
There are so many different people, historical, personal, everything, whatever it says. Mitch, I lost my parents young. Not to make this too personal, but that would be where I would go if I had a choice.
I can understand that for several reasons. One would be because you miss them. Another would be to say, “Mom and Dad, look at the great job you did in raising me. Look where we are today.” I love that suggestion. If you don’t mind me asking, how old were you when you lost your parents?
I was in my early thirties. That might be older to some people, but I didn’t start my life until later because I was so focused on business. I have two kids and my parents have never met them or my wife. It would be so great to share that with them. Raising kids is such a complicated thing. I know you know, from your daughter and everything. I want to say to my parents, “What about this? What was I like when I was a kid?” I have no idea.
It’s something that you miss out on when you lose your parents early like that. I was lucky. My dad passed before I turned 65. My mom is still alive and doing great. I get to ask her those questions. Most of the time, she’s asking me how to turn her cell phone on and things like that. I was thinking to myself, “What is it going to be when I’m that age that I won’t understand? Will I be calling my daughter and saying, ‘What is this thing? How do you turn this thing on?’” I don’t think I could help you with your request, but it’s a beautiful gesture. Thank you for sharing it.
You got it.
What we get to now is the grand finale, the change the world question. Adam, are you ready?
What is it that you are doing or would like to do that truly has the potential to literally change the world?
It’s very much on my mind, everything we’ve been talking about, having a sales background and knowing the importance of sales. Your readers are in and running small businesses. Nothing happens without sales. If we can liberate sales people from the chains of CRM that they are bonded to and break them free, that I think would change the world. I think it would make the economy better. It would make a whole six million people in the United States happier. A lot more would get sold so that would make even a multiple of that happier.
It’s a great mission to be on and I know you’re on it full-time. It reminds me a little bit of that first breakthrough revolutionary Apple computer commercial, the one that was selling against IBM.
The 1984 Orwellian.
That’s the way you described your mission. It reminded me of that commercial. If you’ve never seen it, just google Apple versus IBM commercial. You’ll love it. Adam, it’s such a pleasure getting to know you better, learning more about Spiro and getting your wisdom to share with my readers. Thank you so much for spending time with me. I can’t wait until we get a chance to talk again soon.
Right on, Mitch. I’ve enjoyed it as well.
Resources Mentioned in This Episode:
- Virtual Entrepreneurs Association
- The Virtual Entrepreneur
- Adam Honig
- Niche Down
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