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This is tricky. Depending on your churn you are right on the border of a direct sales model being viable. The rough rule of thumb is you need a CLV of $2000 for

This is tricky. Depending on your churn you are right on the border of a direct sales model being viable. The rough rule of thumb is you need a CLV of $2000 for direct sales to be viable. Below this number and you need to rely on marketing to drive inbound sales. My best guess is you are sitting in the sales valley of death. You have two ways to go - figure out how to increase your CLV so that direct selling (i.e. sales people on the phone) is viable, or decreasing your true CAC so that you can avoid the need for sales people. There is an alternative which I suspect you don’t want to hear - stay small and handle all the sales yourself. If you do this you can make money with a CLV well below $1000 and still do OK (it will be a ton of work). You are not going to be a billionaire, but you might be a millionaire.

throwaway-dena 9y ago
According to scuttlebutt from other vendors on the same platform, word is that 4000$ per annum is the mode, representative of larger customers and therefore their tendency to stay as a customer for at least a generation worth, say 3 years. That would place CLV around the 12,000$ mark. Not sure if that is optimistic or pessimistic. There is a little churn, but lots of repeats too, makes me feel surprised. Given that, going back to your initial statement, is there some particular assessment about what I need to do?
- tixocloud 9y ago
  Given that there is little churn and lots of repeats signals some potential. However, since your product is broad and spreads across both smaller companies and larger enterprises, as a fellow commenter mentioned, it might be worth plugging away at direct sales yourself. Most sales folks are highly driven by a commission model so they'll be taking a cut from you - you'll have to decide whether the income you're getting from each customer would be worth the cost of a salesperson. One strategy might be go after smaller companies with shorter sales cycles to build up your foundation before going after larger enterprises.
- danieltillett 9y ago
  The rough rule of thumb of when to bring in a professional sales person is when you have somewhere around a million dollars of ARR. It just doesn’t work trying to get a professional before reaching that level of turn over. I didn’t hire any sales people in my business until I have been doing more than this for several years. On the topic of sales people they are very good at selling themselves and often not so good at selling your product. I have had such a bad experience with so-called “professionals” that I now only hire people with the right technical background and personality and train in sales instead. If you really want someone to help I would look for someone with no sales experience, but who has business experience in the areas you are trying to target AND who believes 100% in your product. They might be a little rough around the edges with the sales patter, but being a genuine believer will more than make up for the inexperience.

throwaway-dena 9y ago

According to scuttlebutt from other vendors on the same platform, word is that 4000$ per annum is the mode, representative of larger customers and therefore their tendency to stay as a customer for at least a generation worth, say 3 years. That would place CLV around the 12,000$ mark. Not sure if that is optimistic or pessimistic. There is a little churn, but lots of repeats too, makes me feel surprised. Given that, going back to your initial statement, is there some particular assessment about what I need to do?

tixocloud 9y ago
Given that there is little churn and lots of repeats signals some potential. However, since your product is broad and spreads across both smaller companies and larger enterprises, as a fellow commenter mentioned, it might be worth plugging away at direct sales yourself. Most sales folks are highly driven by a commission model so they'll be taking a cut from you - you'll have to decide whether the income you're getting from each customer would be worth the cost of a salesperson. One strategy might be go after smaller companies with shorter sales cycles to build up your foundation before going after larger enterprises.
danieltillett 9y ago
The rough rule of thumb of when to bring in a professional sales person is when you have somewhere around a million dollars of ARR. It just doesn’t work trying to get a professional before reaching that level of turn over. I didn’t hire any sales people in my business until I have been doing more than this for several years. On the topic of sales people they are very good at selling themselves and often not so good at selling your product. I have had such a bad experience with so-called “professionals” that I now only hire people with the right technical background and personality and train in sales instead. If you really want someone to help I would look for someone with no sales experience, but who has business experience in the areas you are trying to target AND who believes 100% in your product. They might be a little rough around the edges with the sales patter, but being a genuine believer will more than make up for the inexperience.