Act And Think Like A CEO With Orrin Klopper [Episode 131]
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What defines the CEO mindset?
While everyone may have a different answer, there are qualities that remain consistent. In this week’s episode, Doug C. Brown speaks with returning guest Orrin Klopper, CEO of Netsurit. Doug and Orrin do a deep dive into the CEO mindset, why learning how to think like a CEO is essential when selling to them, how to build synergy with your life and your business, and much more.
In this episode you will learn:
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Episode’s guest – Orrin Klopper
Orrin Klopper is the CEO of Netsurit, which he co-founded 24 years ago during the lead-up to Y2K. Orrin and his partners saw an opportunity to provide managed outsourced services for companies and differentiate themselves by being honest, ethical and fair. Orrin is a passionate Microsoft Partner and committed to serving both employees and clients by nurturing and realizing their dreams. In addition to his role leading Netsurit, He is active in the Young Presidents’ Association (YPO) and the Entrepreneurs Organization. Orrin holds a master’s degree in Entrepreneurship from the M.I.T. Sloan School of Management.
Visit his website: www.netsurit.com
Act And Think Like A CEO With Orrin Klopper
I have Mr. Orrin Klopper, the CEO of Netsurit. We’re going to talk about a lot of different things, certainly how you use the Blue Ocean Strategy for growth in your sales business as a CEO. We’re going to talk about how a CEO thinks and acts and how they’re expecting somebody who’s selling to them to act. We’re going to talk about how a CEO runs the company and how we should be running our sales businesses or our sales practice as well as talk about mergers and acquisitions and things that they’re doing within the IT space.
You can imagine the IT space is a very crowded Red Ocean. How do you find Blue Ocean strategies within that? How do you think that way to help CEOs like Orrin get to the next level? How can you position yourself better to have relationships with CEOs of major companies like Netsurit? Without further ado, let’s go speak to Mr. Orrin Klopper.
Orrin, welcome back to the show. I’m so grateful you’re here again.
Thanks so much, Doug.
I was telling my production crew about how much I enjoy talking with you because every time I talk with you it’s like this masterclass, and not only about brilliance in business. I walk away feeling refreshed in life in general. I appreciate your spirit. Thanks for being on here again. Most of you know I don’t invite too many people back the second time. This is a very special episode, so please pay attention. Take your pen out. You’re going to get a lot of notes out of this one. To set the frame, can you tell everybody what you guys do, please, and what you do?
We’re a technology services company. Either we are the IT department or we augment the IT department of companies that have between 25 to 1,000 user environments. When I say we’re their IT department, we look after the day-to-day of their technology. Can a user send an email? Have they got internet connectivity? Are they secure from a virus through to potential cyber-attacks?
We go through a process to understand their business and align the technology recommendations we make so that we can make a real difference. Our purpose is to support the dreams of the doers. From a customer perspective, that’s about leveraging our knowledge of technology and the partnership we have with our customers to make an impact on their business.
It’s interesting what IT to me is. It’s like IT human resources. It’s like operations. People don’t think of IT as this sexy part of a company. They think of it as a functional part of the company. Having a technology background myself, it’s one of the foundational pillars of a company that a lot of people don’t give enough attention to when they’re looking at it. That’s unless their data goes down or unless something happens with their network. It is then like, “All hands on deck. The IT department, we got to talk to them.”
These people down in the cell or whatever doing whatever magic potion they do keep the company running. To me, sales, marketing, and IT are the driving factors in a company. Without IT, it’s done. It’s like having no air in the tires trying to pedal the bike down the road. What I love about your company is not only are you international and multinational, but you guys do things so differently than other companies I’ve talked to, especially in the IT space. We were talking about something that you’re doing that makes you different in the industry. Could you explain to people what’s going on?
When we went into the end of 2019 going into 2020, not only was the reality of our organic growth in a bit of a hole, and that’s me being diplomatic, but it was in a bad place. We also saw this pandemic starting to rear its head. We thought to ourselves, “We have one of the biggest challenges coming we’ve ever faced.”
The one thing that has embedded our ability to pivot and rethink our differentiation is we have quite an involved strategic planning process that we’ve probably been running for several years. What it does is it makes us take a look at the hard to face the tough reality. When we went into 2020, we aggressively cut costs. We put 50% back into profits and cashflow because we didn’t know how bad things were going to get. We took another 50% and kept that aside to think about growth and innovation.
One of the things that came out of that, and it’s going to sound simple but it was a two-year exercise, is we came up with what we believe is a Blue Ocean service in our space, which we called Innovate. To give you a little bit more detail on our space, we look at technology environments between 25 to 1,000 user environments. It’s predominantly companies that use Microsoft technology.
There are two technology stacks here. One is Office 365, which is your mail, and the Office Suite, Microsoft Teams, and those tools in and around there. Another piece a little bit further up that stack is called the Microsoft Power Platform. We saw this and thought, “There’s an opportunity here. A lot of organizations are paying for the full Office 365 as it is, but they’re not using it in the way that it can have a real impact on their business.”
In our Innovate service, we offer, using an example of a number, which is $5,000 a month, we will find $60,000 worth of ROI in a 12-month period or we carry on working until we do. We haven’t seen many other MSPs offering the service in this way. MSP is an industry term for a company that does what we do. It’s a Managed Service Provider. That’s the one part of what we discussed earlier. It’s 1 of our top 5 strategies.
A second part of our strategy is organic growth, which any business has to be thinking about putting energy into and leveraging to be able to grow. We are in a Red Ocean. It’s the reddest of the reddest ocean. There are 20,000 to 30,000 MSPs in the US alone. Whenever you’re competing for a new customer, there are at least 4 to 5 other MSPs that are in there, undercutting prices and trying to do whatever they can to win that customer.
The third lever that was part of what we discussed earlier is we’ve leaned into acquisitive growth. As a CEO, and I think about sales and growth in general, we’ve arrived at this place where we’ve invested in a differentiated service, which I feel is a little bit of a Blue Ocean. Nothing’s ever a true Blue Ocean. There’s always someone around the corner, someone I haven’t met who’s doing the same thing. Now it feels like a Blue Ocean. We’ve got an organic growth engine that is very expensive. We’re spending a fortune to get leads if I compare it to what we did in the past. We’ve got this acquisitive growth engine. The acquisitive growth engine is bringing on customers with those companies that we acquire.
Ah, I see you have an employee walking into your office.
It’s my daughter.
We’re keeping that in the show. Every time I talk to you, there’s this new thing that comes out that we can teach people. The show is about how to teach people how to think and act like a 1% earner so they can be a 1% earner. That’s what it comes down to. You’re the CEO of a company thinking like a CEO of a company. You’re thinking, “How am I going to grow this company? How am I going to differentiate or be different?” You come up with what I would call a risk reversal idea, which is, “It is $5,000 a month, but we’ll get you back $60,000 in a year. It’s zero out-of-pocket cost to give this a try for a year. We guarantee it.”
Here are a couple of questions. I know we hadn’t originally talked about this, but your daughter coming in sparked this whole revolutionary change test model. This is awesome. When you are being pitched as a CEO of a company, the salesperson or salespeople, let’s say, how important is it for them to be able to think like a CEO?
If you look into most successful salespeople, they are very good at putting themselves in the seat of the person they’re putting this value proposition forward to. With that, typically, if it’s an industry, they understand the challenges the industry is facing at a base level. From the discussions they’ve probably had, they’ve gone deeper into that particular company. To answer you, it’s unbelievably important that if a salesperson were selling to a CEO, to try and put themselves in that CEO’s shoes is going to make them successful. I believe that.
I agree. I teach this. I teach that you’ve got to know your client’s business as good or better than they do in order to think like they need to think. You’re making decisions from a different perspective. If we’re selling to a mid-level manager, let’s say, who’s responsible for maybe a P&L in their department or something, it’s a similar but very different thought than the CEO of the company is going to think.
You brought something up which was amazing. It is you take 50% and then 50%. You’re throwing 50% toward growth initiatives and setting a budget for growth initiatives. What I see most salespeople who are not in the top 1% and those who are in the top 1% are doing exactly what you said. They’re taking a position and saying, “If I make $1.3 million this year in commissions, I’m going to take $300,000 of that. I’m going to peel it off and I’m going to use this for my business as a CEO would use it for their business. I’m going to focus on organic strategy.”
I have the darnest time getting through to salespeople sometimes. It’s like, “You can’t keep all the money if you want to get to the top 1%. If you look at a CEO like Mr. Orrin Klopper running his company, all the money coming in is not going to Orrin. I guarantee it. We’d like it to, but it’s not all personally going to him. It’s being dispersed out through the company. That is so he can run the company and be the CEO of the company. His job is to make sure that the company is very healthy and growing.”
I don’t know if this is a fair question, but what would you say to people who are trying to sell and they’re going, “I got to keep all the money myself,” or, “I’m making $500,000 a year selling and that’s all mine. I shouldn’t reinvest it in there for growth.” Do you think that’s a smart strategy or do you think they should be reinvesting back into their own growth, not only their own growth in leads but in their own growth in their own person?
Reinvesting for growth is critically important. You can maybe have a few seasons where you’re harvesting based on seeds that were planted in seasons before, but it will catch up with you. There’s no question that it will catch up with you. 100% keep on investing. The one thing in a business is how the business is differentiated. How is the product differentiated? For a sales leader or a salesperson, how are you differentiating what you do and how you do it? How are you investing in that?
I’ll give you a simple example. During the pandemic, suddenly, we were doing sales meetings with people in every state. They were not expecting us to sit in front of them. We suddenly realized, “This screen here is real estate. How can I differentiate communicating with you?” We ended up engaging with this unbelievable sales organization. They taught us how to use Prezi. I can tell you the wow factor.
I’m not saying that closed the deals, but it’s a simple example. Someone probably went and got trained in Prezi, which is a presentation technology. Go spend some money on how to do it. If they were in a sales team of ten people and they took the company collateral and put it in that, I guarantee you they would outperform the risk.
I haven’t used it a single time where someone didn’t, either during the presentation or at the end, say, “Please tell me how you did that. That blew me away.” I’ve seen exactly what you’re talking about is used. One of our top sales guys has taken it to the next level. He’s got the camera. He’s got a stream deck. He’s got all sorts of things. At the drop of a hat, he can leverage that space in such an effective way.
That’s so important because we have salespeople and then we have entertainers. Salespeople are information people when it comes down to it. We’re talking about information exchange. No one wants to be bored to death and have routine facts and figures coming at them. You got the entertainer side. The entertainer is that person that everybody goes, “The life of a party type of person.”
Who I found makes the most money is when you combine both of them. Your top sales guy is giving the information, but he’s also entertaining a bit with all of the bells and whistles through Prezi and the things that they’re using. That is so different because it’s so creative. You’re in a Red Ocean in the space.
We’re in the managed services space.
To those of you who are reading, this is Orrin Klopper. His company is called Netsurit. You should be studying this stuff as I did. When we hear something, we get a couple of ideas and we should go back and study it. I got a really great business plan model from our last conversation, Orrin, so I thank you.
How do we stand out in a Red Ocean? I remember being at the beach when I was a young guy. There are tens of thousands of people walking at the beach. All of a sudden, this one figure comes by in a bikini, and time stops. My eyes went right over. That’s what we want to be. If we’re going up against multiple competitors, we want to be that person that they remember on the beach, so to speak. In a Blue Ocean Strategy, which I know you’re a big proponent of, I learned a lot from our last episode on Blue Oceans. I pulled it apart and studied it. I came up with some Blue Ocean strategies for myself and my business from our episode.
On the Blue Ocean side, when we’re looking at a Blue Ocean component, it doesn’t stay Blue Ocean for that long after it’s discovered. That’s a myth that people believe. It’s like, “I’m the only one here in the jungle. Look at all these new flowers. I’ll harvest them. No one else will come into the jungle ever.” They start thinking like that. How critically bad is that thought process when you enter a Blue Ocean Strategy?
It’s fair to assume that competitors will adapt and pivot to compete head-on with what you perceive to be a Blue Ocean space or a Blue Ocean offering. Different industries, products, and services have different lives of competitive advantage. It’s a case of having a strong process to be able to re-look and rethink it.
Paranoia has a negative connotation, but there’s something healthy about it. Even salespeople or sales leaders constantly watch what the competition is doing. Borrow brilliance where you see it as long as you’re not breaking any laws. We can always learn. We can learn from other industries. We can learn from competitors in our own industries.
It’s safe to assume what can look like a Blue Ocean will become more competitive over time. There are some organizations that have managed to protect their Blue Ocean. Take for instance Google and the search engine space. ChatGPT is sending a shiver up the spine of the executives at Google. I’m not saying Google’s not going to make it through, but they were almost bulletproof and you’ve got this AI engine that can do stuff that Google couldn’t even fathom doing. You never know what’s around the corner.
AI was the Blue Ocean originally. Look at all the competitors that are jumping into this Blue Ocean. Even Microsoft released something where they’re connecting up with some pretty high-profile people to develop something called PI, like Personal Intelligence. I remember when I was in the telecommunications business, we had what they called an Integrated T1. We used to have a data circuit, a local circuit, and a long-distance circuit. That’s how we used to do our telecommunications, for those of you who aren’t old enough way back when.
We came along with a technology that integrated all three services into one T1. That’s 3 digital circuits down to 1 digital circuit. There were huge cost savings. For about the 1st year and a half, we had as Blue Ocean as could possibly be, but within about 1 year of that year and a half, there were 5 competitors in my town. I like what you said about borrowing brilliance because that’s a great strategy that so many people don’t employ. They go, “If I didn’t think it, I shouldn’t use it.” You didn’t think up the automobile, but you drive it every day mostly. Hopefully, that dispels that myth. You said something about a healthy paranoia. That’s constantly keeping you looking on the horizon for new Blue Oceans. Did I get that correct?
For sure. Take for instance the idea of a loss review in a sale or a win review. Both of them, if you bring a healthy dose of paranoia into it, can keep you aware of what is happening in their competitive landscape and ecosystem around you to say, “Why did we win? Can you tell me more about the proposal or company that came second? Was there anything that blew you away outside of our proposal?”
I’ve found some of those win reviews to be powerful, and then in the same breath loss reviews, where I always feel that there’s a relationship established in a sales process. If the person you dealt with is not even letting you do a loss review, then there’s something that’s felt long before you lost the actual deal. Those are great ways to see what’s happening. I’m not saying to be unethical and force them to give you the actual proposals. What can they share with you that’s going to help you to learn and grow or to know what about your proposal stood out for them?
That is brilliant. Here’s the thing. I can tell you from the sales channel, from most sides, well over 90% of people never ask why they lost. From a CEO’s mind, you’re going, “We need to know this information because we want to get better at this capacity of closing deals.” From an average salesperson, and I’m not saying the one percenters but I’m saying the top producers, they’re not asking. I’ve asked this question over and over. It blows my mind why they don’t because A) There’s such high intelligence that comes out of that.
I had a buddy, Dave. He couldn’t get a date. He was walking up to these gals and saying something. They weren’t throwing drinks in his face, but they got up and turned away. It was that type of thing. Dave’s a very nice-looking guy, so I knew it wasn’t that. One day, I asked him, “What are you saying?” and he told me. I said, “Did you ever ask a woman how she felt about that line?” He goes, “No.” I said, “Please do.” He got shot down the next few times. He asked, came back, and said, “I get what you were trying to teach me. I need to adjust what I’m saying.” That is a small analogy to what you’re saying in a bigger play.
A CEO like yourself, if somebody had this high rapport with you and they asked you, you would share what you could with them so that they can get better. You said something also that was important, which is if that CEO or that buyer’s not sharing with you, you probably did something to piss them off or break rapport. That’s as important to know as the business reason why the thing might have been lost.
I feel very strongly that if you’re getting a high no ratio for a request or a loss review, there is something wrong with the sales process or the person’s approach. At the end of the day, you can’t guarantee winning. Hopefully, you’ve built a relationship with that person to at least want to grant you 30 minutes to answer some questions and give you a little bit of feedback.
Let’s say we do that ten times a half a year. We lose ten deals. It’s not unusual. 8 of the 10 are saying the same thing over and over again. This is where you blew it out of the water. All we have to do is remove that boat from the channel.
That’s it. Imagine your close ratio is 3 out of 10 for deals that you’re working on. You, through those loss reviews, can move that to 5 out of 10. The return, the ROI, across the business is huge. I always think it’s a great opportunity.
From a CEO’s perspective running a major company, you have a salesperson that is constantly exceeding your expectations of quota where they look at it and go, “Quota? That’s nothing. If I hit that, I’m failing.” They constantly exceed quota. From a CEO’s perspective, when you look at that person, if they came to you and said, “I need more opportunity in the company. I need some special considerations,” would you give credence to that versus if somebody was underperforming, let’s say?
When you say special consideration, are you asking for a possible promotion to a sales leader, or additional bonus program, or potential share options?
All of the above, but the latter two mostly.
When you find a top-performing salesperson, it’s gold. It’s absolute gold, especially if they fit the culture and they’re not assholes. Sometimes, you have high-performing salespeople that are assholes and they’re toxic in the culture. Our approach there is they have to go because it causes way too much damage. Especially if they’re having fun, they fit the culture, and they’re constantly overperforming, we have a very progressive view of looking after them. Once you get over the target, those percentages of commissions go up.
That is such a breath of fresh air from a sales perspective because I cannot tell you how many companies comp plans I’ve looked at and they cap these people. I’m like, “You know what’s going to happen. They’re doing quite well here.” I say, “Your competitor’s going to come along and they’re going to offer them a better deal. It’s going to be so sweet because they figured out that they don’t have to cap them. They’re going to move.”
I remember when I was a top rep in that telecommunications company I mentioned, I would be recruited by other companies. They would be like, “I’ll give you a 50% raise in your base. We’ll give you an extra 10% on commission.” It was really tempting at that point to go. Thank you for answering that because it’s so important for CEOs to hear this as well as top salespeople.
1% earners and top salespeople, don’t abuse this. Don’t be going into Orrin’s office every week and demanding something because then you turn into what he said he would remove you from the company for. Don’t become such a maverick, obtrusive jerk in the company. You’ll have to go. That’s always been my philosophy when I go into companies. I look at them. If we have 2 people who are disrupting the other 30 people on the team or whatever, we either have to put them on their own island or they have to go. Every time we separate them from the herd, the 28 always grow. It has never ceased to happen. It’s an excellent point. How do people know more about you, your company, and things like that?
You can go to our website, Netsurit.com, and find out more about the business and see if it’s potentially either a place you want to work or maybe we are the right technology partner for you. If you want to get in touch with me, I’m very responsive on LinkedIn. Gladly reach out to me on LinkedIn. If you want to connect, that’s a great way to reach out to me. I’m responsive to it.
I really appreciate you being here. I have one other question which is completely off the cuff because I didn’t expect your daughter to come through. It was so wonderful to have her come through. I’ve always had my kids close to me. If I’m working, even if I was in the middle of an important meeting and they needed me where they would text me or whatever, I’d excuse myself from the meeting and be like, “I’ll be back in two minutes.”
I’ve never asked this question either. I know the answer to this question, but I’ve never asked it. How supportive is it when it comes to your success as a CEO having a cool, stable family life, the love and support of your daughter, and things like that? If you had to rate it on a scale of 0 to 10, 10 being the ultimate, where would it go?
10. From my personal perspective, it will probably be a longer discussion, but my family comes first. My immediate family is first. There’s no question about it. We have a saying in Netsurit that family is first always, no matter what. If you’ve got a family issue or your family needs you, that must come first. We used to be this massive in-office culture, and then the pandemic broke. We have offices in all our locations, but it’s a different approach. We don’t force anybody to go into the office consistently. There might be events or some meetings they might come in for. I look at some of these people and they have two hours a day more with their families because of that. What a gift.
The pandemic was a very tough and traumatic time in so many ways that I don’t ever want to ignore, but some of our people now have two hours a day more with their families, which is the greatest gift. All these companies say, “Come back to the office. You’re not going to be productive.” I’m like, “You find a way to make it work.” For me personally, it’s a 10, and then in our culture, it’s a 10.
I am so grateful you said that. I’m sure I’m going to get a lot of hate mail out of this one. I don’t think Elon Musk is right in his approach with remote work.
One of the things for all our readers here, I look at centenarians. If you’ve never done this, go look at them. They’re always online on YouTube or whatever. It’s the people who live over 100 years old. They ask them, “What are the major things that if you look back on your life you would either do differently or you would do the same?”
Almost 100% of them say, “I wish I had spent more time with family and friends. I wish I hadn’t worked so much at the office. I wish I had taken more time for myself,” which is more of family and friends when it comes down to it because we got to be our own friend as far as I look at it. I appreciate you saying that. I know it’s an unfair question. We never talked about the question, but I appreciate you answering it.
It’s an absolute pleasure. The nuance in Elon Musk’s business is he has got a manufacturing facility. There is a different dynamic there. In an information technology business and a lot of marketing-type businesses, the ability to work from anywhere is an absolute gift.
With that technology, you can do that with the click of a mouse. I appreciate you being here. I appreciate you as a person and as a dad. Thanks so much. Do you have any last parting words before we say thanks so much?
Thanks for the opportunity. Thanks for listening. You have a way of listening that energizes me. I had a lot of fun. Thank you.
You’re welcome. Thanks again for being on the show.
Wasn’t that awesome when his daughter came in? I love that. A lot of people would cut that out of a show. I’m not going to do that at all. Here’s the reason why. Life. You have to have a life first. It is life first then business. They can be synonymous. They can be 50/50. If you have the ability to spend time with your loved ones that you have, do it because as you get older and they get older, they move on to their own lives, especially if they’re your own children. That’s what they’re supposed to do. Orrin’s a testament to how to be a great CEO. He’s also a testament to how to be a great father and a great family man as well.
There are a few things that came out of this that I really want you to think about. How do you use risk reversal in your sales process? A risk reversal, as they were doing it, was, “It is $5,000. Pay every month, but we’ll guarantee you $60,000 in return.” That’s a zero net cost at the end of year one. It’s a great acquisition strategy to acquire a client.
You have risk reversal in some ways. You don’t have to go so far that you hurt yourself with that. Be careful with your risk reversal. It’s not like, “Out $5,000 in a month and we’ll guarantee you $50,000 a month back.” If you can’t, then you’re going to lose out. Remember, always play win-win. They win and you win, especially when you’re crafting offers.
How do you reinvest back into your business again and again? Remember, he said he’s taking 50% and moving it into the lead generation side. How do you take a certain percentage of your income and drive it back into your sales business? If you’re a CEO, you already know you’re a salesperson because you’re selling to other CEOs and other people within the organization
As a salesperson, how do you reinvest back in your business? You cannot keep all the money. If you do that, it will stagnate your growth. You’ve got to reinvest back in. Think of it this way. If you kept 30% and reinvested 70% back, but your sales went from $1 million to $3 million, you are still making $1 million. That puts you in the top 1% in most places. What if you took that and put $3 million in and made $10 million out? You’re making $3 million off the numbers.
Here’s the thing. A lot of people, even with taxes, are like, “I don’t want to pay taxes.” You don’t want to pay taxes. You want to pay your fair share of taxes. I would urge anyone to pay $3 million a year in taxes. Do you know what you’re making when you do $3 million in taxes? It’s the same philosophy, but our brains sometimes go, “That’s loss. We can’t do that.”
There were a lot of great nuggets that came out of this from doing organic growth, utilizing partner growth, and all kinds of different growth. Remember, it’s all about client acquisition. It’s all about moving yourself from Red Ocean strategies into Blue Ocean strategies. You’re consistently going to keep doing that. You’re going to have to innovate. That is the new thing for CEOs. If you can bring innovation, not just paying and opportunities but innovation, they are open to that idea.
If you love this episode, please give it a five-star review. I know it takes a few minutes to do that, but I would be forever grateful. Especially if you’re a long-time listener or reader, I appreciate you. If you’re a new-time listener or reader, I am thrilled you’re here. I will continue to keep bringing you great content. Please tell your friends because that’s how this grows. We are in the top 10% of all shows, which is mind-blowing to me if you think about where we started months ago. It is from bringing great content and having great people like you tuning in, so thank you so much.
If you’re an expert on a subject matter that relates to the show and around how to think, be, or act like a 1% earner, whether you’re a CEO of a company or whether you’re somebody who is that 1% earner who’s serving the CEOs and business owners, reach out to us at YouMatter@CEOSalesStrategies.com.
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Until next time, go out and sell something. Sell a lot of it. Sell it for profit. Play win-win, or preferably win-win-win. You win, they win, and someone else wins. When you play win-win, you expand your sales opportunities internally and externally in a very big way. You’re building huge rapport. They know that they can trust you. That is one of the most important parts of human communication, certainly in business and certainly in life. Until next time, to your success.
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