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March 14, 2022
5 min read
Welcome back to The Weekly Pitch! Today, we go bullish on software sales in our Feature Story as Wall Street goes bearish.
In The Closer, we encourage annual price increases in 2022. Despite what's happening in the public markets, customers still have healthy budgets in place.
Let's start with our Weekly Chart.
This chart from Revenue.io and RevOps Squared's Customer Acquisition Benchmarks Report illustrates an outbound conversion funnel. Paraphrased from the report:
"For every ten sales activities (cold call, email, or other outreach), one of them yields a conversation. One out of every twenty conversations or exchanges delivers a booked meeting, of which roughly seven out of ten booked appointments occur. Of any ten meetings that occur, just over four of them will turn into real business opportunities."
The Weekly Pitch hot take? Invert the top two data points. Aim for one conversation or response out of 20 activities and book at least one meeting after five prospect interactions. And high-performers get to an 85% show rate (or better) on the first meeting converting more than half to opportunities.
Panic! at the NYSE. Markets are tanking for complicated reasons – natural course corrections, inflation, international conflicts, to name a few – and tech stocks, in particular, are experiencing a hangover from slowing growth now that our pandemic has entered the "new normal" mode.
But have no fear. Breaking into software sales is still a thing, and for a good reason. Once we're in, peak earnings potential rivals any lawyer, doctor, or investment banker when we consider additional compensation in the form of equity and stock options.
Valuations are plummeting, but sales numbers are still rising at historic rates. Translation? Hang on if we sell for a publicly-traded company, and be patient if we work for a startup or a privately funded business.
Let's highlight four public and two private companies to help us understand what's happening.
The overnight work-from-home mandate from March 2020 undoubtedly fueled zoom's absurd growth rate. Its stock topped out at $568 on October 19, 2020, at a $165 billion valuation or 70x revenue multiple.
Its multiple today is 7x as the company is only forecasting 11% year-over-year growth. It's banking on last year's $100 million investment in its app ecosystem to fuel future growth.
As Zoom transitions focus from its core self-serve business to sell into the enterprise, the company needs salespeople to keep the tally of six-figure customers growing. There are 122 sales-specific openings on its careers page.
Boasting 472 sales openings, DocuSign needs more salespeople than ever. The stock hit $310 last September, but since then, it has tumbled to $75, carving out more than $45 billion in market cap.
Investors are scared off by company guidance and plans to "only" grow 25% in 2022, but DocuSign continues to invest in direct sales and sales support roles across the board. According to LinkedIn, sales make up 34% of its total workforce.
In October, we profiled Vimeo's CEO, Anjali Sud, as the company that had no salesperson two years ago. Now it's poised to more than double revenue in three years in large part by emphasizing enterprise sales.
From its past life of "indie YouTube" to a legitimate video communication platform for corporations, Vimeo needs more salespeople. They currently show 50 sales openings to complement over 200 already selling the Vimeo platform.
The stock currently trades at less than a 5x multiple and grows almost 40% year-over-year.
Almost exactly one year ago, we included Twilio in one of our earliest articles. The company is best known for its product-led growth sales motion and "pay-as-you-go" usage-based pricing model.
It currently trades at a modest 8x multiple, down from more than 40 times revenue when the stock peaked at over $400 in February of 2021.
But the company has over 200 sales openings to add to its current 1,400-plus salesforce. Twilio is the exception on this list. Technically, growth has slowed, but it's still forecasting a 45%-55% revenue bump in 2022.
If the private markets serve as an indicator for software sales, future careers will continue to look bright. Take Zapier, who just received funding from a well-known VC firm, Sequoia, at the tune of a $5 billion valuation on an annualized recurring revenue run rate of $140 million. That's almost a 40x multiple on a transaction reported on March 8.
What makes Zapier unique is that its sales unit is a team of six out of 572 employees in total. However, Steeve Vakeeswaran, head of sales, stated, "we are rapidly experimenting with growing sales efforts." These efforts include hiring for the emerging sales-assist role we touched on in our State of Sales 2022 report back in January.
Finally, software investment firm Thoma Bravo just poured $800 million into UserZoom, a company with under 500 employees. From the March 1 press release:
With the investment from Thoma Bravo, UserZoom will be able to further develop its innovative product offerings, increase its existing customer base, and expand its geographic footprint while maintaining and driving sustained growth.
All signs point to a large portion of this investment going to sales and go-to-market efforts. The company shows several sales openings globally.
The overall global economy is still strong. Unemployment is historically low, and most companies are hiring. While tech stocks have been knocked back to the early pandemic levels, unlike March of 2020, customers are not in a spending freeze. They're renewing and buying more stuff from us than ever before.
It's ok to apply a price boost to a renewal. Salesforce famously baked in a 7% annual increase into contracts. If we're still uneasy about that level of a bump, ask for a 3-year deal to lock in pricing. Always opt for the phone or video to negotiate the terms of an agreement.
We have less than three weeks left to close out Q1 strong! We got this!
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