CEO: How to Scale Over $10M ARR: Sales Repeatability

Blog_Table_Sales2Congratulations! You’re now approaching $10m in Annual Recurring Revenue (ARR). You most likely have at least 25 customers and are expecting some add-on sales or renewals this quarter. As mentioned in the last post, a critical indication of the future success of a Stage 1 company is the ability to move beyond beta customers to paying customers. However, once you’ve attracted your first set of customers your ability to grow past $10M in ARR will prove difficult without sales repeatability.

Defining Sales Repeatability

Successfully building an effective repeatable sales process requires a clear and fact-based understanding of your initial set of customers. By now you should be able to articulate these 5 things.

  1. the target companies that should be interested in your product
  2. the persona you are selling to
  3. the value proposition they care about
  4. the use case they want to solve
  5. the size of the initial deal (ASP).

Here’s an example of the level of detail necessary to scale to the next level.

We sell a $150k deal to the enterprise architecture team in telecommunications companies to allow them to aggregate data across their customer care systems (structured data) and their social media signals (unstructured data) so they can lower their customer churn rate by predicting who is likely to churn and presenting them with an offer that retains them as a customer. 

Let’s break that into meaningful components:

MOdel_Example

The Direct Benefit of Sales Repeatability

You can now target the enterprise architects in every telecommunications company via marketing, your direct sales team and partners who have access in those accounts. You can determine how many other telecommunications companies there are in the world and use this to calculate how many sales teams you’ll need to cover your addressable market opportunity.

Most companies with a great product or a few great salespeople can get to $10m in ARR, but a company with little repeatability in their customer sales is not ready to step on the growth accelerator and invest more in sales/marketing/channels. If you do NOT have a repeatable sales model, then it is time to look at your target market and your value proposition to determine if you are focused on the wrong market or worse, there is no sizable market for your product.

The Broader Impact

Developing a repeatable sales model gives you a basis to make many other important decisions:

  • How many sales teams should I hire and where?
  • How much should I invest in marketing to generate awareness and leads?
  • What tools do I need to equip my sales team with to be successful?
  • Do I need a services team to ensure customers successfully go into production?
  • Should I charge for training?
  • What partners work in these same accounts and may help me?
  • What other features should we build in the next product release based on customer feedback?
  • How many engineers should I hire to build these customer-requested features?

Assessing Metrics for the Next Step

Let’s assume you have “crossed over” and your sales model is repeatable. Now it is time to start instrumenting your go-to-market machinery for scale. Some key metrics you should start tracking include:

9_Metrics

 

AccelG2M

These are just some of the questions to be addressed during this stage. AccelG2M helps companies identify and answer issues in all phases of the company lifecycle.

Follow the blog for more of our proven tactics on how to build successful go-to-market strategies. In upcoming posts we’ll address sales, partner/channels and marketing during all 3 stages of growth. Next up, sales in Stage 3: how to properly build the machinery for Market Scale.

Herb Cunitz & Mitch Ferguson

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