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October 4, 2021
4 min read
Welcome back to The Weekly Pitch! Pop quiz – how many of us hit Q3 quotas?
The data continues to show that only half of us will answer yes. If we missed, remember the annual goal supersedes quarterly targets. Successful sales leaders and reps stay focused on leading indicators like:
In our Feature Story, we report on the meteoric rise of Vimeo and its 38-year old CEO, Anjali Sud. No longer the "indie YouTube," Vimeo didn't have a single salesperson two years ago. Today, the team is over 100 sellers strong, has generated $80 million in annual recurring revenue, and wants to double the sales force in a year.
Let's open with our chart of the week:
SaaStr recently shared some key metrics from a group of publicly-traded software companies. What's interesting is a large number of these companies have a product-led growth sales motion to get users on their platform for free, yet most are pursuing the enterprise segment.
Even well-known SMB plays like Monday.com and Asana with small average deal sizes are telling "The Street" we want a bigger enterprise footprint. Not only does customer churn decrease with larger deal sizes, but mid-market and enterprise companies are more likely to expand than small businesses.
In August, Monday.com shared with investors, "The company closed the quarter with 470 paid enterprise customers having more than $50,000 in annual recurring revenue, up 226% from 144 in the second quarter of 2020."
Last month, Asana reported a 111% increase year-over-year in the number of customers spending at least $50,000.
But one company from this list is quite different from the rest. Vimeo had no direct sales team just two years ago. Now, with 3,300 enterprise customers and $80 million in revenue, it's thriving.
"We didn't have a salesperson two years ago. Now enterprise revenue makes up 25% of our business."
Anjali Sud is having a blast as CEO of Vimeo, a company growing 40% overall and 80% in their enterprise segment (which they define as "subscribers who purchase plans through contact with our sales force"). She took the company public on May 25 and now oversees 1,200 employees, including over 200 in their global sales organization.
When she took the helm four years ago, she literally and figuratively had to answer the billion-dollar question: how do we create that type of value for our customers, employees, and investors?
Headquartered in New York, Vimeo was founded in 2004 and, over the years, became known as the "indie YouTube." Its self-serve, freemium business drove the company strategy until Sud became CEO at the age of 34. As a career-long marketer, she made a bet on the sales profession. "Our product can be our marketing," she mentioned during her keynote as SaaStr last week. Get people using the product for free, and a talented sales force can take it from freemium to $22,000 ACV. That was her answer to the billion-dollar question.
Fish in your own pond
Vimeo spends next to zero on marketing to the enterprise market. Instead, they empower their 120 enterprise account executives to fish amongst the 230 million freemium users. Sud noticed a signal years ago when more sign-ups were coming with a corporate email address.
The second signal came when her team noticed a dramatic change in the content uploaded to the Vimeo platform. It shifted from long-form creator-led documentaries and feature films to:
The pandemic accelerated virtual work and the need for companies to take all-things digital more seriously. Like many SaaS companies, this was a boon for Vimeo. Their sales team started closing bigger deals at a faster clip.
Anjali Sud's strategy on lead generation:
"Freemium is our lead funnel. Ultimately, we don't have to fish in other ponds to find our enterprise customers. Over 70% of new enterprise customers start as free and self-serve users."
Customer segmentation is critical
Sud recommends segmenting your sales motion based on the end-user journey. There could be several journeys to map out, but when it comes to the enterprise, she first asked her team, "do we have the right product, and can we orient to serve the enterprise?"
If she could do it all over again, Anjali would have invested much earlier in customer success and user activation before, or at least in parallel with, building an enterprise sales team. If big companies use your product with success, they'll buy more stuff.
In her mind, relationships still matter in software sales. And best-in-class SaaS companies segment their go-to-market with this in mind. A time-intensive relationship is worth it if the customer continues to expand and grow with you. Ask what could be the lifetime value of this customer relationship?
The enterprise segment for Vimeo is currently showing net revenue retention of 110%.
Vimeo is hoping to double its sales team in the next year with multiple openings for account executives, sales development, sales engineering, and sales operations. Although the company has experienced fantastic growth recently, Sud quickly reminds others that the "path to success will not be a straight line."
Success always takes longer than we expect, which shines through in her leadership mantra:
"Show patience on vision, impatience on execution."
Make a Plan to Hit Our 2021 Goal
Heading into Q4, let's impress our sales managers with a plan that maps out how we will reach our 2021 target. Incorporate the following elements:
Now make like Ted Lasso and hit that "Believe" sign!
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