The Profitability-Driven Approach to Massive Sales Team Growth with Jessica Marx

Are you scaling your business the right way? Many entrepreneurs focus on top-line revenue but neglect profitability.

In this episode, Jessica Marx, founder of Tailored Premier and host of Millions Were Made podcast, shares how to scale your business effectively while keeping profits high and building a motivated sales team. Jessica has led sales teams of over 500 individuals with a $150 million budget and brings a wealth of knowledge on scaling businesses profitably. She shares how businesses can shift from chasing revenue to building a strong foundation for sustainable, profitable growth.

If you’re looking to build a sales team that drives real revenue while keeping operations lean, this is the episode for you!

00:00 - The Power of a Profitable Business Model

05:12 - The Biggest Mistake Companies Make When Scaling

09:40 - Building a Scalable & Profitable Sales Team

15:42 - The Role of Sales Culture in Driving Growth

17:53 - Profit vs. Revenue: The Key to Scaling Sustainably

19:05 - How to Identify & Maximize Profitable Clients

24:35 - Selecting the Right Clients for Long-Term Growth

32:07 - Where to Connect with Jessica Marx

Instagram: https://www.instagram.com/thejessicamarx/?hl=en
Website:  https://tailoredpremier.com/

LinkedIn: https://www.linkedin.com/in/jessicamarxbizcoach/

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Transcript

00:00
The reason that that builds a really strong culture is that when we win, you win. I often find that business owners and sometimes when they bring in investors or when they start to grow is that they haven't set themselves up in a way or price themselves in a position where they're highly profitable, that they have the opportunity to compensate those that are bringing the actual weeds and closing them into the company.

00:28
Welcome to The Takeover with Tim and Cindy, where we show you how to dominate every area of life and business. Let's get winning. If you're an entrepreneur and you want to know how to scale your business to the next level while keeping profitability in mind, you're going to want to lock in on this episode. Today, we are joined by Jessica Marks, who is the founder of Tailored Premier and the host of Millions Were Made podcast.

00:55
Jessica has a background in history of leading a sales team of over 500 individuals and over $150 million in budget. In today's episode, she's sharing a proven numbers-driven approach to scaling business profitably. If your goal is to one day exit your business, or you want to know how to scale your sales team and keep them motivated to boost your sales, this is the episode for you. Welcome to the Takeover Jessica Marks.

01:24
Thank you for having me, Cindy. I'm excited to be here. So excited about this conversation. I really want, I mean, you have so much expertise, but I really wanted to focus this conversation around profitability, scaling, what is it like to run such a large sales team? I know that you have all the background at the experience. Let's kind of take it to the beginning. What made you transition? What was the motivation behind transitioning from corporate leadership into running your own business? And.

01:54
What do you love most about what you do right now? Yes, so I have a little bit of an interesting background in that 2008 I was doing commercial real estate. Obviously we went through the economic crisis here in America when it came to real estate. And at the time I took a huge opportunity and went to a startup out of San Diego which is a big biotech community, but this was actually on the healthcare pharmacogenetic side, so more of DNA testing.

02:20
And long story short, started with them at their infancy. And in 2015, it was acquired for over 8 billion. I stayed on for an additional two years as an executive. And I had a really intricate role within the company that's not typical at a company of that size in that because I was with them from the beginning stages, my title oversaw

02:47
all of the commercial operations at our corporate headquarters, which had a few thousand staff members and our national sales team with over 500 sales reps. And I reported directly to our CEO and board of directors in a fast growing company like that, that's able to grow to that size in such a short period of time. You can imagine I was working 100 hour work weeks, if not more, and I didn't have kids at the time.

03:16
So I was able to do that. And after I stayed on for my additional two years, we went through multiple leadership changes as far as CEOs and chairman of the board. I really wanted to take a step back and I had learned so much and developed such a strong skillset. A lot of it I just had strategically, it's just how I think. But through all the highs and lows, I had become a mom to newborn twins.

03:45
at the end of my two-year deal. And so I decided, you know what? I'm gonna pull back. I can always go get another job at any corporation, as a senior executive of sales or a CSO. But right now I wanna reset and figure out what's next for me because I had felt like I had built this dream of somebody else's and it was a lot of hard work. And I just knew that I could do this for myself. So why am I gonna go work for somebody else if I have...

04:15
the skill set to really be able to build this. And so I had started my private advisory firm and my first clients were the former COO and president of the company, helping them with their new venture. And it really started to snowball and build momentum from there in that my clients always came via referral and I was very steadfast from the beginning that we were going to remain a boutique advisory firm, very high touch with clients.

04:42
and that we were going to be referral only and that we are able to work with really top-tier clients that are mission driven and purpose driven, that are growing their companies and scaling beyond seven figures. Phenomenal. I love that transition. It's like your expertise that you created and gone at over so many years was perfectly positioned to advise the companies that you do now. On that topic of advising, what would you say is the biggest mistake?

05:12
companies make, right, as you're advising your clients with regards to scaling. Yes, so it depends what sector that we're working with, right, so obviously newer entrepreneurs are really in that figuring it out stage. But one of the most critical mistakes that we see companies make is they stay in that transition period where they never quite fully understand what the business is capable of.

05:39
and they don't fully understand how to leverage the data, how to look at the analytics, the metrics, and build that story that's going to allow them to scale efficiently, profitably, into new markets where some of the dead weight, how can they eliminate roles or expand on roles? One of our main drivers to clients is at some point, the reset has to happen, right? There has to be a pause, even in fast growth, to be able to say, okay,

06:09
what's breaking, what's not working well, how can we do this differently? And then instead of slowly chugging along to that next milestone, the trajectory can happen much quicker. So just to give some context to your listeners, we audit roughly about three to four companies per month. We do full due diligence as if I was going to buy the company with my own money. And what we're looking at is everything from the very beginning. So what did the offer or the product look like?

06:36
And then we're diving into the marketing, we're diving into the sales strategy, the team, the infrastructure, the legal, the IP, all of the things, the financials, to really say, okay, here's where some risk lies, but here's where the opportunity really is. And oftentimes, it is very small shifts or tweaks that need to be made in order to increase profitability or productivity within an organization to not hit that.

07:05
that glass ceiling or become stagnant in their growth. We just find not enough business owners, find the time or take the time and get the resources to be able to look at the company in a different way. That's so true. I think it's the difference between being in the business, right, and you're working in it versus working on the business. And sometimes just taking that step back to assess, to reflect, really does help you not only analyze the areas of the business that need adjustments,

07:33
but you then create and build momentum as a result. At Pima, we're doing this monthly and quarterly. How often are you recommending your clients do that? I think doing a large scale audit should be done at least when you're between one to 5 million. And then again, as you approach 10 million, right? Because the advice and the growth factors are going to be much different.

07:57
And so what kind of, I know everybody's familiar with the same, what got you here, won't get you there. I mean, it is true, right? Things should start breaking or repositioning should be happening, team growth. And so at a larger scale, I would say once between one to 5 million, and then again, as you start to approach 10 million annually and quarterly, there should be internal milestones, checkpoints, audits that are done.

08:23
within every single department and then with all of the analytics as a whole to see where are we missing some opportunity here and oftentimes it's because you're not looking at the right data or the right metrics or you're assuming that the numbers you have are accurate when oftentimes we come in and we're sifting through 70 pages of

08:48
due diligence and numbers and data and metrics. And sometimes we look at the spreadsheets that they send over the reports and I can instantly tell something's off. It's not right. This data cannot be accurate based off of another data point. And because nobody's looked at the entire puzzle all at once, they don't realize that certain pieces are missing or certain pieces belong on another puzzle.

09:11
And so we really try to drive that in on annually. Someone has to be sitting down and reviewing the company, just like if you had investors or you had a board, you would be having these quarterly board meetings where they're wanting all of this information and it has to be accurate. You live and die by that information and business owners need to treat their small businesses the same way. Essentially, you don't know what you don't know, right? And sometimes having that external perspective, a second pair of eyes on your business can unlock some of those areas that

09:40
You may not even be mindful of, I love that. Let's talk about sales team. So you've led over 500 people on a sales team, right? 150 million dollars in budget. I mean, you have so much experience in that area. I often get asked the question around as lead generation partners for a lot of businesses, we get asked, should we be hiring a BDR, like a business development rep, a sales development rep, a closer, when kind of scaling or building out our sales team.

10:09
How are you thinking about the different components of a sales team in that scalability and in growth? Yes, so in a small business, I really truly believe everybody is the sales team, right? And so no matter if you have five employees, you have 20 employees or you have 50 employees in a small business, when you're at that stage, everybody needs to understand how to sell the product or service.

10:34
And I think that there should be an incentive comp plan for everybody to bring in new business and lead generation. Now, as you continue to grow and you're able to make these larger investments, sales is changing, right? So when I first started, and I know you and I had this conversation the other day, when I first started in commercial real estate, I was using a white pages, okay? We now have so many resources at our fingertips. We have so many ways that we can leverage

11:04
marketing without adding additional headcount that can ultimately generate sales. We have social platforms. We have AI. I mean, there's so much coming to the markets right now that the door to door sales we are going to see continue to dissipate. And it makes sense, right? That's a lot of time. That's a lot of knocks to get probably really low conversions when there's other ways to get business quicker at a lower acquisition. But when you're starting to add

11:33
anybody within a sales or business development role, you want to look at the incentive comp plan. We often find that either they're using something very generic or they're using something capped. We were one of the first sales organization in medical that did not have any cap to commissions earned. I had sales reps making over a million a year. The reason that that builds a really strong

12:03
When we win, you win. Yes. And I often find that business owners, and sometimes when they bring in investors, or when they start to grow, is that they haven't set themselves up in a way or price themselves in a position where they're highly profitable, that they have the opportunity to compensate those that are bringing the actual leads and closing them into the company. The way we set it up.

12:29
and we actually roll out Incentive Comp into almost every single role within the companies that we work for is that it's already factored in. And then the goals that we're giving them is above and beyond the baseline required in order for the company to operate. So we've already factored in their salary, that's covered. When they go out and close new business, let's just say they close.

12:57
200,000 in business a year. It's a lower sales role. We may give them for the first 100,000, a 7% commission. But then we know that there's a lot of data and a lot of psychology around going after that next carrot, going after that next tier, creating competition within an org chart. If you're hiring somebody that has a sales personality, that's love sales, that's been into sales, they...

13:25
look at those next levels. They look at those next tiers as huge wins. And oftentimes we find that people reverse the order in which compensation should be structured, or they cap it to where, of course, by the 14th of every month, if they've hit goal and there's nowhere else for them to go, they're just going to smooth sale into the next month or focus on March sales instead of February sales. And so there's a lot of different ways that you can structure it to where...

13:54
That role alone creates such high profit margins for the business, but it really is a custom approach based off of what you're selling, the price point, type of rep, the type of role, and then what does that generate for the business? And then what is the lifetime value of a customer for you? There were so many keys that you shared. Two, I want to highlight. One is making it an incentive for everybody in the organization, right? If somebody's bringing in

14:21
new leads and new business, they should for sure be comped. I love that commission structure across the board because it incentivizes everybody on the team to be advocates for and evangelists for the company. The second part of that, we do a lot of conversations around sales teams. What does it look like to build one out? And it's so important to know in order to hire top tier salespeople.

14:47
you need to have a solid incentive structure in place, right? One, like Jessica is speaking about that is mapped out one way you have the immediate goal and the stretch goal. One way you are thinking about if that person is capping right mid of the month, how can they actually do more to earn more? And I think the top 1% of sales talent are looking for organizations that have this kind of structure in place. So.

15:12
That is really something I wanted to highlight because that's a really good point. Yes. And if you're starting a sales organization or you have one within your company, culture and comp are tied for first place in the most important aspects. Because if you think about it, sales oftentimes can feel really defeating. And so if you as a leader or whoever's leading your sales department can't keep the motivation, can't keep the drive, can't keep the excitement, that's going to impact revenue significantly.

15:42
You also have had experiences where if I went to a Honda dealership and I met with a salesman at a Honda dealership, my experience, my interaction is going to be very different than if I went to a Rolls Royce dealership, right? Because Rolls Royce is hiring top sales professionals. They understand their clientele. They have to be highly educated. They have to have years worth of experience

16:11
where maybe at Honda, we're willing to give people a try because this is a good starting point for them. And so you have to understand your product and service so well. So for example, with us in healthcare, we're selling to physicians, right? These are people that have gone to school for 12, some of them 15 years, have multiple degrees, they're running practices, they're highly educated. And so for us, we found that customer service was a huge...

16:40
huge selling point. It didn't matter if you had 12 years worth of sales experience, but it was really low ticket experience working at Verizon. I found sometimes hiring a waiter from Ruth's Chris that's been a waiter there for four years that has exceptional customer service and isn't intimidated and understands how to talk to the customer was a much better hire, even though he had no...

17:05
sales, technically sales experience, he sells at night when he has these conversations around three $400 dinner bills. And so I think it's really important to understand too, what's right for your company, but what's really right for the person that we're selling to. I love that you mentioned culture. It's something we talk about a lot on the show.

17:24
team culture, organizational culture. And I love that you're mentioning the culture of your sales team. I think it's one of the departments that needs the most motivation, right? It has the most highs and lows and the way that you treat your sales team, sales culture is critical to the success and failure of your sales team. You briefly touched Jessica on lifetime value, and I love that conversation. It's so important, but I want to kind of move into a little bit profit versus revenue.

17:53
as entrepreneurs, when we're thinking about top line revenue, we want to grow and grow and grow and grow. But when we're not thinking about profitability and we're not keeping that in mind, it's as if we're, you know, the analogy of a bucket, right? We're filling the top of the bucket and there's holes in the bucket and things are leaking out. A lot of that can be attributed to customer retention. So you have great customers coming in the top, but you're kind of losing them on the bottom.

18:18
What are some things that you think about in regards to kind of customer acquisition, customer retention and lifetime value overall? Hey there, make sure that you are staying on top of your game by following the show. Hit that subscribe button for the Takeover with Tim and Cindy, wherever you are listening. Let's get winning together.

18:42
Yes. Well, so just to give you an idea in corporate, because some entrepreneurs have zero corporate experience or they don't, they've never been privy to these conversations that happen around the boardroom. But we had thousands upon thousands and thousands of accounts, right? Practical medical offices. Every time a sales rep signed up a new account, it wasn't like, okay, great. We got a new account.

19:05
like, let's put a check mark on the list. It was then extracting a lot of data over the initial 90 days and six months. Was it a false start? Did they sign up and then not send anything to the lab? Or do they take really bad insurance mix? And so they're not profitable. So even though they're driving revenue, they're not profitable and they're not really a great account for the business. And so we're looking at what is the consistency? Like what are our top accounts? What are the accounts that we should probably just get rid of? It's costing us more money to send them product than what we're getting back.

19:35
These are all the things that we're looking at. And companies I find don't look at this enough is their project profitability or account profitability. And so what they'll do and what happens is they'll have this legacy client that's paying a monthly retainer of 3,000 a month, but their current market rates are 8,000 a month. So their team is doing the same amount of work. The account managers are working the same accounts, doing the same thing, but you've got one that's maybe running a...

20:02
39% margin, and you have another one that's at a 7% margin. So when we go in and audit a company, I'm ranking all of these accounts top to bottom. And if you typically get rid of the lowest five accounts and you replace them with new accounts, the margins increase substantially. So to answer your question too about retention, where we find a huge gap is internal sales and internal marketing.

20:29
people think that I market to a new lead, I close the new lead, they're a customer and we're done. That's absolutely not the case. So then what happens is you have too high of attrition or you have an initial sale and then there's no ascension plan after that. And so you're leaving a lot of opportunity and a lot of profit because you've already paid the acquisition costs on that client from the start. And so we oftentimes we're building out these ascension models for clients and we're saying,

20:58
I actually presented one this morning where they were leaving typically around 12 to $14,000 annually per client on the table because of where the client was dropping off and that they didn't have this alumni program to be able to sell them into or next phase or they were putting so much education and information in the initial phase that if they would have just broken that out into two separate programs.

21:26
It completely changed the dynamic and they would have to lessen the amount of new leads by about 27% annually. And so I really challenge clients is, don't just focus on that initial sale, focus on the entire journey from when they first hear about your company to what is the journey we can take them on and give them a really great experience so they're bound to stay on for maybe years.

21:53
sometimes in some situations or repeat buyers where they keep coming back and buying the same product because the result and the experience is so great and they're being marketed to and reminded to continuously buy that product. What are some simple tips or ideas around internal marketing? Because I think it's something that doesn't get spoken about enough. Yes, I think that you have to look at the result that somebody gets from your product or service initially. And then is there another?

22:22
industry that we can market that to. But more importantly, is there a way that we can add on another product or service that doesn't require a bunch of additional headcount or doesn't require a huge investment that just makes sense? So for example, we work with a product-based business that does mineral drink. And we saw that

22:44
adrenal and cortisol and all of these other products were being talked about in the markets. Like there was being talked about on TikTok, things are going viral, people are paying attention to their cortisol levels. And so it made sense that we brought on this other product that complements the minerals because we don't want the clients going and buying it from somewhere else when we could layer in that product and instantly market to the thousands of customers that we

23:14
without having to go get new customers. It's as simple as sending email broadcasts out. It's a very little spend, right? Some other examples of that would be, we have people that do marketing strategy, and then people are like, well, I don't really have anybody on my team that can execute this. Well, let's get a marketing generalist or a marketing specialist that we can bring on at a very fixed salary, and we can do billable rates to the clients so our strategy's not going to waste.

23:43
There's so many ways that you can do that. And then win back campaigns are one of our favorites. We work with a lot of functional doctors, health wellness, naturopathic doctors, weight loss clinics. We know that people oftentimes fall back off the wagon. So they're really invested in their health. They invested in these functional doctors or functional wellness. And then a year goes by, they either gain back the weight or they stop taking the supplements.

24:10
And so reminding them, we have this opportunity where we welcome back our alumni patients, or we invite you to join this 90 day reset program. We're not forward facing marketing. There's no cost to this other than sending out email campaigns to patients or clients that have already purchased and know, like, and trust the programs. One of the things that we did this last year is identifying which were our top.

24:35
favorite clients to work with on so many levels, right? Just great to work with. Ones that were the most profitable, ones that scaled the most, that had the kind of natural ascension path. And I think there's something to be said about bringing the right type of clients on. Ones that you also know are going to stay with you in the long run. Ones that you know are going to be that win-win. Of course, not every client is going to be that client, but the more intentional people can be upfront with bringing in the right clients.

25:03
What you actually say no to is just as important as what you say yes to. That also helps in that top line revenue and profitability and the lifetime value of some of the clients that you bring on as well. It's so important. And we oftentimes when we're looking, I mean, we say no more than we say yes.

25:20
Because there's a lot of we're not just looking at revenue. There's a lot of different factors that we're looking at to determine whether or not someone would make a good client to have their company audited or to work with us in a private advisory. And we see it with clients too, where when we look at their client rosters, it's very difficult because everyone's on a different plan and they're and we'll hear the business owner say.

25:42
Well, I was trying to accommodate their needs. So then I created this one-off program and then this client I knew wasn't really gonna be a good fit, but then I took them on and now we're at negative 7% profit, but you know, we're not profit on this client. And so we sometimes have to have the really difficult conversation with our clients of like.

26:00
you don't understand who's right for the business and who isn't. And it's because you're not looking at the data. If you removed emotions and you said, I'm okay with turning away a client, even if it feels bad, it's gonna feel better than six months from now, realizing that client is costing me $10,000 to sustain because I'm having to pay staff that we're not getting the margins on. And I think that, you know, as you grow and evolve, and I'm sure you've really seen this with Pima,

26:30
is that your client, your customer should also be evolving with you. And it's okay to then increase the standards or increase the threshold and what it takes to work with your firm, your agency, your company, whatever that may look like. As a leader scaling a company, there are endless demands on your time, Jessica. And I know I was watching your socials and we've had conversations around how you've removed yourself from the business and you have operators in place, right? You get to decide.

26:59
what you do in your several businesses. For those that are thinking about, okay, how do I best prioritize? How do I put somebody in a seat? Like, how do you manage it all? As a leader, just doing all of these things, what are some of the tips that you have around prioritizing as you are scaling a business? Yes. So one of the things that we heavily focus on is reducing owner dependency, because I'm never going to buy a company where I have to buy the owner. And it goes for everybody listening to this. I know you think you're the most valuable person in your

27:28
but you are the least valuable to anybody that's going to come and purchase your business. So if you can't successfully work your way out of your role and either name a new CEO or name somebody that operates the company, you're actually going to trade at a much lower value and you're also, it's really not the point of owning a business, right? Like we get into entrepreneurship because we're really passionate, but we also don't want to be a 40 to 60 hour a week employee.

27:58
business owners who are coming to us are working 40 to 50 hours a week because there is no margin for them to hire these people to come in and operate the company for them. So step one is always going to be really getting your business into that peak performance state so that you have the margins to hire the right team because it's important that that number two is highly qualified.

28:26
because you'll never get out of it if they don't know what they're doing. Right. And so we see even if it's on a fractional level, that's a great way to start a lot of our clients. We start with bringing in a fractional COO, maybe 15, 20 hours a week. It's very cost effective compared to bringing on a full time. And then as they slowly transition out, they're eventually able to bring in somebody full time. Really understanding where you're the highest asset to the company.

28:49
and where you're not and where you don't need to be involved. And I outsource just as much of my business as I do my personal life because I'm really clear at where I get the highest returns. And I have very strong boundaries. I always create my personal schedule before I open up my business schedule because it's important for me to do drop-offs and pickups. I have young children and have that time and make sure that I am able to give each company that I own.

29:17
the necessary amount of time, even if it's a half hour a week, that it needs in order for decisions to keep moving forward. But I really think getting okay with releasing control and not everything's going to get done, maybe exactly how I would do it. But that's also incredible because then there's been opportunities that have happened because of the way that they're doing things. It can be a very difficult thing as a business owner to let go. I think some of the things and the tips that you shared.

29:46
will allow us to kind of think differently. And I 100% agree. I think the reason that you are in business is to create the kind of lifestyle that you want and the ability to remove yourself and for the business to not be reliant on you automatically boosts that valuation, right? And also what your team is able to accomplish whether you are in there or not. That is also an amazing goal to kind of work towards as you're thinking about the scalability of your company.

30:14
This was such an amazing conversation, Jessica. We love to ask our guests on the show. What does winning mean to you? Winning to me is when I have harmony in my life, when I feel like none of the balls are being dropped, like I'm able to give everybody the attention when I feel calm and it's interesting because seven years ago, I wouldn't have said that winning was like.

30:41
hitting the next thing and go, go, go, and launching this and launching that and having all these awards and sales achievements. And it's interesting because as a business owner, I've learned that when there's calm and there's peace and I have my phones not ringing, that's the good sign. That is when things are going really well and to lean in and enjoy that. And I also think that

31:09
impact that we're making, the amount of lives that our firm has been able to change, seeing our clients be able to make phenomenal investments by their dream homes or take their families on these vacations and spend more time. That impact, I know ripples not just to their families, it ripples down to their teams, their clients, their customers. And so just reminding our teams every day as well, like the impact is so wide that we're having.

31:37
it would be hard for us to ever even grasp everybody that is impacted by it. Oh good. It's that ripple effect. I love it. Jessica, where can people get in touch with you? Yes. So I have a podcast called millions were made where I drop an episode every Wednesday. I interview incredible business owners like Cindy. And then I also share a lot of tangible business advice that you can apply to your seven and eight figure company. And you can find me on Instagram at the Jessica Marks or tailored premier.com is the firm.

32:07
Amazing. Thank you so much for jumping in, Jessica. It was an amazing conversation. I know that our listeners got so much value and we'll talk soon. Again, this is the Takeover Podcast. And remember, domination is not a destination. It's a way of life. Stay winning.