ST. CLAIR NEWBERN: Thanks for having me.
JAIME TARDY: So first let’s start off with what is Live Energy and what’s an energy brokerage firm?
SCN: So Live Energy is we’re an energy broker and consultant and what we do is represent commercial industrial buyers in deregulated markets like Texas where there the market has been open for competition. So instead of just having one electric company you can buy from, for example, you have a number of different competitors that have come into the market competing for the business. When that happens, commercial industrial buyers, you know, they have no experience buying a commodity such as electricity or natural gas and so we basically fill that role as unbiased third party consultant to help them make decisions in terms of when they buy it, who they buy from, what type of contracts, that kind of thing.
JT: I mean that’s really different compared to where I am where we don’t have deregulation and we just go with one company and say it’s good. But you can buy energy pretty much from a lot of different places and therefore like the price fluctuates, is that what you mean? So people really need to pay attention?
SCN: Basically, like in Texas, it’s interesting because the electricity prices are tied directly to the price of natural gas. So in order to leverage deregulation to your advantage, the smartest thing you can do is pay attention to where prices are and one of the things that our company does is we have a piece of software that tracks the market in real time so that for example when the price of natural gas drops it’ll send our customers alerts and they can take advantage of buying opportunities. So it’s really different from buying anything else you buy for your business like paper or toner cartridges because the price is very volatile.
Usually it’s a very big portion of their overall costs and so it’s important to either have someone in house that really understands how to do it properly or use a third party such as Live Energy. So we basically jus fill that role. We bring the experience, technology, the platform, process, information to the table so that they can make good decisions even though they’ve never really had any experience managing a commodity.
JT: Yeah, because most of us don’t have experience doing anything having to do with that. How did you guys even get into that?
SCN: Well I was very interested in deregulation. I knew up in the northeast some markets had been deregulated and that it was coming to Texas and I had no experience. I was thinking about starting another company that was going to require us to buy some telemarketing equipment and believe it or not, this was plan B in case that didn’t work. I wanted to have something else that I could market and I thought based on some things that I had read about the markets up in the northeast, that there might be a good opportunity to acquire customers at a fixed fee on behalf of these new retailers that were coming into the Texas market.
So what started as a project to do some telemarketing kind of led into this, you know, the deregulation of energy and then I did a little bit of research and realized that it was costing companies a lot of money to acquire customers and I thought that I could do it at a lower cost per customer. I originally thought that we would focus on residential but it turned out that I realized that where the real opportunity was, was in helping businesses because they had this really high cost that they were going to have to deal with in a new way.
JT: Yeah, they’re spending a lot more money too. So I have a good question though. You weren’t in, you had no background in this whatsoever and you were sort of open and you just saw it as an opportunity. Why was this your plan B? What happened with your plan A?
SCN: Well, it quickly became the plan A. I didn’t know anything about it. I just remember seeing it in the newspapers and starting to do a little bit of research and actually to be honest with you, I considered maybe trying to go work for one of the retailers but having no experience I realized the only way to get in was to just start up a company and so having no experience led me to deciding that you know what I could probably figure out how to do this. It took me about nine months to figure out what was going on and one of the thoughts I had was well if it has taken me this long it’s going to take the average business guy a long time too and they’re probably going to need some help. So I decided that I would just take a crack at working as a consultant.
JT: See, okay, what inside you makes it so that you say, “Well I can’t get a job because I don’t have any experience, why don’t I just start a company?” What made you decide to do that?
SCN: Well, I had actually worked with several other large companies in the past in the IT field working as a consultant helping them staff IT projects. I just knew that working with businesses a lot of times they’re open to having an outside expert come in when there’s any area that they don’t understand such as IT and I saw this as kind of a natural area for someone to come in as an outside expert and help companies with this particular process. I wanted to understand it so I would call up energy companies and ask them about it and it took me awhile to figure it out and so I just figured that hey this is just complicated enough that I think there’s a place for a third party expert to exist and I had nothing to lose.
But I talked to a lot of different retailers and told them that I wanted to help them acquire customers and they were like what are you talking about, we’re going to do that ourselves. By the time the market opened I had gotten one retailer to agree to do business with me and with that one opportunity where I had a retailer that was willing to let me write business with them, that kind of opened the door and then I just started calling companies and offering my services. One thing led to another, I was able to get some deals closed really quickly and realized that I had a good business model.
JT: See, that’s a great story. So what you did is you saw an opportunity and you went ahead and you put that hat on and then you found a customer. That’s huge. I mean that’s I think what everybody should do. So was that sort of how it went? You sort of called, put your sign out for business, started calling some people and just try to get that first account and then go from there? What was your mindset and sort of walk me through those first couple months starting off.
SCN: Well they had a pilot program in 2001 and I was trying to figure out the market as that was going on and then like I said I got one retailer that agreed to sign a contract. Basically, I got them to agree to let me write business with them. So I went home, I didn’t put a sign out from because I was working out of my home. I had about 50 names on a piece of paper. I think about the tenth one was Domino’s Pizza and as I’m calling through I called Domino’s Pizza, their corporate office, and talked to the guy who said, “Oh well I’ve been waiting for someone to call me about electricity in Texas.” I said, “Well that’s me, I’m calling you” and I was able to save them about 20 percent on what they bought for the entire state of Texas and that was my first customer and it was the tenth call.
I immediately shifted gears into figuring out okay what am I going to do with this customer because he’s getting ready to fax me I think like a thousand bills or something ridiculous like that. I just kind of went from there. I ended up signing a handful of other accounts and then stepped back and started building a model that I could use to start recruiting people in helping me go after the opportunity.
JT: So it was just you. What made you decide to just call Domino’s Pizza? I mean did you have cold calling experience before? What made you just go hey I’m going to write these huge businesses and I’m just going to give them a call. I’m somehow going to get through the gatekeeper and get them to take a look at my stuff.
SCN: Yeah, I think that’s definitely one skill that I have. I don’t think I really have any fear when it comes to just calling people up and saying hey. I had already spent like six months having people slam doors in my face so that was nothing at this point to call up customers. I was calling big electric companies and they thought that I was crazy. Who is this guy? Why is he calling me? I guess I had probably enough experience in other sales positions prior to that. I worked in a couple of sales positions in college. I even sold cable door to door.
I’ve done selling in all kinds of strange and interesting industries before that. But it came natural to me. I never thought twice about it. I just thought hey I’m going to get on the phone and start calling them and seeing what happens.
JT: So it sounds like you were sort of use to rejection and failure because you had done it so many times before. I know a lot of entrepreneurs, especially people just starting out, who haven’t been in sales beforehand don’t really get that that it takes a ton of rejection before you actually get a yes. So tell us a little bit more about your cold calling strategies and what you learned becoming a salesman and being really good at sales.
SCN: Rejection and failure that’s, of course, if you’re not getting hung up on and if you’re not having all kinds of terrible calls then you’re not doing it right because it’s pretty much what it requires. Whenever we bring someone in we just tell them look you’re going spend a few weeks on the phone getting hung up on. If you’re not, then you’re not doing enough. I think one of the important things we focus on with Live Energy is making sure that we have a strategy so that when people do get on the phone they know what they’re going to say. They at least have an idea of how that’s going to go and we have a process where we literally have specific messages that are for the first call, second call, third call and we have the metrics in place to figure out what’s working so that we can refine it.
Now when I started out, of course, I was just winging it and having conversations off the cuff not really knowing where things needed to go but over time we developed a pretty methodical way of figuring out okay what are the pains that our customers are feeling, these prospects we’re contacting, what are their pain points? What are the things that we can use on the phone to establish that we understand what they’re dealing with and what is problematic for them in their buying process and use that in the cold calling process so that we can establish some rapport and hopefully get to a point with them where other people are not able to.
JT: Can you tell us a little bit about your process and your steps? I know we don’t want all your big competitors to be listening but what are sort of your process and your steps and how do we evaluate? So if someone was just to be starting their cold calling campaign maybe a little scared about doing it to begin with, what would you give them for advice on step one, step two, step three?
SCN: Well I think the great thing about sales is that there’s so much material out there that people have written. I’ve consumed I think every sales book ever written. I feel like I’ve got them on my shelf and I encourage all my sales people to look at different techniques and strategies that people have provided but the process that we really stick to is trying to identify what is the pain point of the prospects that we’re calling, make sure that they understand that we get it and that what we have to offer is designed to relieve that pain whether it’s them not having the time, the expertise, the experience to deal with an energy contract or in any industry.
You know you got to figure out what is it that’s causing the pain and you’ve got to convince them really quickly that you have something that’s going to relieve it. That’s kind of a fundamental thing that has always stuck with me that people buy because they think you’ve got what’s going to relieve their pain – whatever that particular pain is. So we have a process where we try and identify those things, make notes in our system, respond with appropriate messages so that if someone raises a specific objection about a particular area that we know that they’re wrong. Instead of saying hey you’re wrong we can send them some useful information about that. That’s kind of another strategy that we have. We try and really be an educator.
So instead of being a hardcore sales company we really try and educate our customers. We want them to see us as a trusted resource where they can get good information and things like that and I think that sets us apart so whereas you’ve got a lot of people calling up trying to just sell them on their next contract, hey we can save you some money, we want to be viewed as a resource where they can get good information, where they feel like hey these guys are speaking my language, they understand where my pain is and I think they’ve got the solution that can make my life easier. That’s the kind of connection we want to try and make. Whatever form it comes in whether that’s in a phone conversation or an email or direct mail campaign. That’s really kind of the overarching goals that we have.
JT: That’s what I was going to say. I was going to ask you how do you get these prospects on your side because usually when you’re cold calling people are sort of like hey I don’t want anything, what do you want, that sort of thing. It sounds like you’re just going in as far as the educational piece and sort of going hey if we can help you great, if we can’t here’s some information that you can learn to maybe help yourself. That sounds like a really good way to get the prospects on your side instead of just being like hey buy my stuff please, buy my stuff, you know. That sounds great. It says you also email people. So is that something after you already cold call or do you do any email marketing and stuff like that to get people?
SCN: Yeah we do a little bit of that. We’ve literally done everything. When I first started out I had independent agents that basically I’d bring them in, I’d train them, I’d explain everything that we do and then they would go into the field and they would close their own deals and kind of do the entire process. What’s interesting over the past ten years is how much technology has changed the way that we operate. In the beginning I was only able to go on a handful of meetings a day with various people and today we can operate from our office and do Go To Meetings with anyone anywhere in the country so that’s really changed the way that we do things.
We’ve gotten much better at being focused in terms of everybody using the same exact message, the same exact terminology when they describe our process so that each customer that we sign they understand exactly what we’re going to do. They understand each of the steps that we’re going to take when we’re profiling them, developing a strategy for them, executing on that strategy and when you have more control over that because, for example, we’re doing Go To Meetings through a centralized platform, it allows you to build a book of business where every customer knows what they’re getting, it’s not like it was in the beginning where we had hundreds of customers who all had a different version of what they thought we were going to do.
We’re much more strategic about making sure that everyone understands this is what you’re going to get from us. These five things represent the five steps in order to allow us to get you on the right path in terms of your buying strategy. This is how we’re going to alert you. This is how you’re going to have to respond. That’s really important and it’s like part of the selling process, part of training the customers so that we can actually deliver the value that we say we’re going to. Does that make sense?
JT: Yes, it completely does. It sounds like you’re a lot bigger of a company right now. How many people/employees do you have and how big are you guys?
SCN: We actually have about 10-12 people, I’m trying to think right now. We got about 12 people in-house that come into the office every day and then we got probably another 20 throughout the country – sales people that work in other markets – Texas, Pennsylvania, Illinois.
JT: Oh, so you’re even outside of Texas. I didn’t even realize you’re outside of Texas and all over the U.S. That’s great.
SCN: Yes. So we’re always, it’s interesting because the markets change so like, for example, Pennsylvania will be a market where there’s a lot of activity because they will have regulatory or rate changes that cause that market to have a lot of activity. A lot of people will be switching. So we’ll end up with sales people up in a particular market that pop up and then they’ll end up sticking and working as we work through the country. By design, we want to keep a pretty small footprint in terms of people in-house.
We like the idea of having people that work independently and are able to kind of log into our systems and do what they do without us having to look over their shoulder every day. But we’ve got to have a core team that prices all the deals, produces all the proposals, looks at all the contracts, does all that good stuff and a couple of programmers as well. So that’s how we’re set up.
JT: Nice. So how long have you guys been in business?
SCN: We started in January 2002. Basically that’s when the market opened in Texas. The pilot program started in 2001. That’s when I was really figuring it out and then the market officially opened in January 2002.
JT: Wow so you have been doing this for awhile. You guys know your stuff. It sounds like you have tons of systems in place. You got your team that knows that the heck they’re doing now. I mean you guys are really cranking it out.
SCN: We are. We’ve got it pretty much down to a science at this point and that can make it a little bit boring to be honest with you. Selling the same thing for 10 years straight but that’s the other company we started that you mentioned is what I focused a lot on the last year particularly which is basically an offshoot of all the technology we had to build to create a sales force and manage it for Live Energy. We took that technology and created another company and we’re pretty excited about that.
JT: Yeah, tell me more about that.
SCN: Well when we started, I guess we started with ACT which is a CRM. People are familiar with ACT and Sales Force and Sugar and as technology evolved over ten years, there was always new changes and updates and VOIP telephones and things like that were rolled out and we adopted a lot of different technology and we kept finding that there was new things that we wanted to do or we wanted to use and pretty soon we had a bunch of different pieces of software we were licensing and paying for and none of them worked really well together.
So to make a long story short, over ten years we came up with a lot of ideas and basically decided okay instead of us licensing all this stuff from various providers we’re just going to build our own platform and so we took a lot of open source code and developed a sales and marketing platform that is an integrated CRM, contact management system which is like a website platform, voice over internet protocol which is integrated right into it so we can do things like click to call and then we have all the metrics in place so that you can track a sales force. So we track what our sales people are doing in terms of how many calls they’re making. We automatically record the calls and track literally every interaction that they have with a customer or prospect.
We also have metrics that are displayed within our platform that show us, for example, what our website is doing, Google analytics, pay per click campaigns. Basically everything that you want to see and track as a VP of sales is part of our platform. So instead of us licensing all that from other people, we’ve basically built all the pieces and integrated them into one tool that works very well and you never have to worry about this company saying oh this didn’t work because the other guys, their stuff isn’t working. It’s basically you come to us, it’s all ours and if there is any of it is not working it’s our fault, which is nice.
JT: Good! We like having one phone number to call instead of 17. So it’s funny, so it sounds like you guys sort of scratched your own itch as you were going along but did that cost a lot more? I mean did you always plan on making this sellable in the future or were you just going well we need it the way we want it and that’s why we’re going to do it this way?
SCN: It’s kind of both. We absolutely needed it and we knew we, well I’m 38 as of a couple days ago.
JT: Happy birthday.
SCN: So you know, I figured I’m going to be in business for a long time and as I projected out the licensing costs, I’m like this is going to cost me a fortune. I guess I can either continue to pay this licensing or I can build it myself. I had several friends that owned businesses and they saw what we were doing and they saw different pieces of it and were like hey can you help us integrate phones into our process? Can you help us integrate CRM? So really the reason we decided to market it was because we got good feedback from other people that saw what we were doing and I felt like okay if I’ve got to build it anyway and it only takes me a little bit more money to go out there and market it and see if we can sell it to other people, then that’s a pretty good risk to take.
So we probably put more money into it knowing that we were going to create a commercial version to sell to other people but it was all based on us really, like you said, scratching our own itch. We had specific problems that we wanted to solve and we solved them and then other people did acknowledge that hey that’s good stuff we’d like to have it too. So we decided all right, let’s just come up with a version of it that we can sell to other people. Now I probably never would have even considered doing, if we weren’t able to deliver it via the cloud, so we never sell software that sits on a server in somebody else’s office. It’s always delivered through an internet connection and we never have to deal with any hardware issues.
I mean it’s great and if it doesn’t work we’ve still got a really great platform that’s going to help us succeed in the future in the energy business. So we’ve got very little to lose at this point.
JT: Nice. You said that twice. I love that. When you started your first company you didn’t have much to lose and here you don’t either because you’re using it anyway. So what is your plans and your process going forward on how to market and sell this and get this thing going? I know there’s quite a bit of competition with Sales Force and ACT and that sort of thing too.
SCN: Yeah I think just like with Live Energy one thing that we realized was that it’s really difficult to sell people something they don’t know that they need already. We’ve used Sales Force and Sugar and stuff like that and the things that we did with the platform were things that specifically addressed things we didn’t like about those things, those platforms. Not that they’re bad for everybody but we just, for example, we wanted integration with our phone system that worked in a way that fundamentally didn’t work very well with these other software platforms.
So we’re starting with something that we know is a solution to a problem that we had and so when we go out and talk with people we’ve gotten a lot of good feedback and basically acknowledging that yeah we’ve got the same problem. Everybody hates their CRM. Sales people hate the fact that they’ve got to log all this information and go to five different screens to close out a call. Well that one specific instance, the way that we resolved that is we’ve got a call screen where they can basically knock out a call in two clicks to dial, leave a voicemail, set a follow call, send them an email, write all the notes. They can basically do that with two clicks where, if you take an out of the box CRM, it may take you five or six different pages to do all that we can do in just a couple of clicks.
So I use that as an example. We’ve basically taken a whole bunch of scenarios like that where we didn’t like the way things worked and made it work as efficiently as we can possibly imagine it. So with all that working together we feel like we’ve got something that is very efficient and when a VP of sales sees it that they’ll either get it immediately and go you guys have solved a problem that I got or not. So our goal is really just to get in front of as many people that we know have sat in the same position we were in trying to get a better handle on their sales and marketing process, better handle on the metrics to be able to see what are all these sales people doing? What’s my platform look like? I’m spending money on radio and pay per click and organic, how much am I getting from all these different efforts? How much money am I spending? What’s my return?
Just lots of stuff like that. We know that a VP of sales, when he sees it, he’s going to like what he sees and that’s because we know that that’s what we want to see. I think a lot of software gets developed by programmers who aren’t necessarily the users. They are like conceiving of something to be used by someone else where what we have is stuff that was conceived by me because I had these problems and I’m like I need a programmer to fix this. So that’s where it all came from. It didn’t come from us just imaging hey I bet you this would be cool and people would need this or that. It came from us saying all right we’ve got a problem, we’ve got to figure this out. How can we do this better?
JT: Especially if you find VP of sales that have those same problems it should be an easy sell because you fixed the exact same issues that you guys had too. So it sounds like a perfect or so far as perfect as you can get before you launch. So are you guys planning on launching soon or what’s your strategy with actual launching and getting this out there.
SCN: Well it’s kind of funny because we’ve got about four or five clients we’ve been working with and we planned to launch a couple of months ago but there has been some very interesting new things that we’re integrating into it that literally weren’t available.
JT: Cutting edge.
SCN: It’s crazy. Literally like with the phone integration, there’s literally things that you can do with the phone network now that you couldn’t do two months ago. It changed. In the middle of the project we’re like holy cow we can do this? Well let’s make that part of the platform. So we’ve got four or five clients we have been working with and we’re like we’ve got to quit. If we don’t quit taking projects we’re not going to be able to launch the company.
So we’re trying to just wrap up what we’ve got on our plate right now and we should be ready to roll here in a few weeks. We will actually turn on our website and be open for business. But I guess it’s a good problem because the initial four or five clients we have are, it has given us a good opportunity to really work through all the bugs and figure out what works, what doesn’t work, that kind of thing.
JT: Yeah, nice. As an entrepreneur and as what you’ve done so far, cold calling has always sort of worked for you. Are you planning on doing that same strategy in this too or do you have different online stuff? This sounds like a pretty much online based business. Are you going to change anything up when you start marketing it?
SCN: No, a lot of the tools are aimed at online. I mean everything is, the internet has changed every business and if you’re not thinking about tearing your business down and building it back up from the ground up knowing that the technology that exists today is totally different than what it was just ten years ago, I think you’re kind of crazy. I don’t think we think so much that we’re going to have to do anything very different because we’ve always adapted to things as they’ve evolved and we have a model for sales that works well with energy and I think that it will work well with selling anything.
It’s just a matter of following a process and I think people are successful in different ways. I know that there are guys in the energy world that are more successful online than I am and there’s people that do better with radio than I probably do but we have our own little mix and we’re profitable and we focus on what works and we’re somewhat I’d say conservative. We don’t throw a bunch of money at something and hope that it works and that allows us to not have to have investors with their hooks into us and stuff like that. I think marketing is something you’ve always got to keep working at, try different things, make sure that you’re staying up to speed on what your competitors are doing so that you can try and keep up with them and just continue to have metrics that tell you what’s working and what’s not and that’s what you put your money back into.
JT: Yeah because what I’m hearing from you is you really look at the data and the numbers and if the sales process works, you keep it. You know what I mean? You just keep pulling out things that keep working and keep testing, getting metrics back and doing the same thing over and over again. That sounds like it’s working really really well for you guys and I continue to hope that it works well for your new company. What was the name of your new company by the way?
SCN: Sunzi Cloud.
SCN: As in the Art of War.
JT: So if it’s not live yet when we put this up we’ll have to put like a link to it or something like that so people can definitely check that out too. So can you tell me any resources or any books that you’ve read or anything good that have really helped you on your journey throughout this whole time?
SCN: Let’s see, there’s a lot. The Sunzi Cloud, of course it’s a cloud based platform and the name Sunzi is that’s Sunzoo, the Art of War and, you know, some people say you can’t use that, that’s not good to use in the name of a company but I was sitting around and the Art of War was sitting on my desk and I had the Art of War in a couple of different versions like the Art of War for Marketing but that’s an interesting book. I think it’s interesting. I love to read biographies. I have been reading the Steve Jobs biography. I like to read sales books, Schiffman.
For all entrepreneurs I think one of the best books that you can read is the E-Myth by Michael Gerber. That book really blew my mind probably six or seven years ago. I realized that I was living the e-myth. So if I had one book to recommend it would be Michael Gerber the E-Myth.
JT: And who hasn’t read that book definitely read it but the people that have it sounds like that’s exactly what you’ve done with your company. I mean you’ve done the e-myth to a tee with all the systems and the processes and everything that you’ve got taking place. So great thing that you read that book six or seven years ago instead of later on. But that’s a great recommendation too.
SCN: Absolutely. I know it has worked because people don’t buy from us, they don’t call and say hey can I talk to St. Clair, I need him. They buy from us, they become our customers and remain our customers because of a process, technology, everything that we offer, our brand offers, and they’re not ever buying into anything specific from me, which was the goal. I don’t want anybody to be tied to me because that means I’m tied to the business. I want to be able to step back and work on it not in it.
JT: Perfect. So for the last question that I always ask, what’s one action that listeners can take this week to move them forward towards their goal of a million?
SCN: I’d say and I think this is a good one. Someone told me this and I think it’s really great is that you’re ten times more likely to achieve a goal that you put on paper versus ones that you just let float around in your head. Kind of like you can’t hit a target you can’t see. So, if nothing else, if you haven’t done it, getting all your goals on a piece of paper, review them regularly. I think that’s one of the keys to actually hitting them is when you start to put something on paper and commit to it. Look at it every day and let that be what you focus on, not anything that’s causing a problem or is a road block but where do you want to be? Where do you see yourself? What are those specific goals that you want to achieve in some specific time frame?
JT: That’s great advice too and looking at it every day is huge because some people, even if we do write them down sometimes they’re somewhere in the computer that you can’t find or they’re over here on a piece of paper that you never look at. So that’s huge to actually set up a way to look at them and not pay attention to the stuff that’s crappy in front of you necessarily and really just keep focusing on that goal. That’s great advice. So thank you so much for coming on. Where can we find out more about you online?
SCN: Live Energy is always a place. Then SunziCloud.com and I’m excited about that business because it’s really whereas with Live Energy on the blog I can’t really write about generic business ideas and marketing whatnot because it’s really energy whereas Sunzi Cloud it’s a platform to help run your business and make your business more efficient. So I do plan to write quite a bit and put lots of content on the blog there. So that would be the best place to find out more about us.
JT: Excellent and what I’ll have to do is I’ll have to interview you next year too once you’ve gone through that whole thing and you can give us tons of stories about Sunzi Cloud and everything like that too. So I’ll definitely link up to everything in the show notes for everyone and thank you so much for coming on today, St. Clair.
SCN: All right, thanks for having me.
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