How would you go about implementing a sales process for a low ARPU product (less than $200)?

It’s very tough, but it can be done. Just not in San Francisco using traditional SaaS employees and processes.

Assume in the end, sales takes home 20% of a deal in salary and bonus. At a $200 ARPU, that means they’d have to close 1,000–1,500 deals a year. Call it a 100 a month. That’s 10x what an average Silicon Valley inside sales rep closes (at higher ACVs, of course).

To pull this off, you’ll need to combine two things:

  • 50+ calls a day, most likely; and
  • You have to have a one or two call close product; and
  • A comp plan probably centered around $40k-$60k OTE. It will take 100 closed deals a month just to make that much.

That’s not what the average, somewhat soft and spoiled Silicon Valley sales rep is good at.

But … you can do this outside of the Bay Area. You’ll need to combine a very efficient marketing and lead routing engine (to make sure those reps call 50 leads and prospects a day) together with a very efficient recruiting engine (to keep hiring those entry-level sales professionals, who may churn at a high rate).

If you can, hire someone who has done this before to help you run it. It’s a very different set of skills than selling at Box or Salesforce etc.

It requires ruthless efficiency in sales, and a true engine in marketing.  It’s more practical as your deal size approaches $99/month or $1000 a year.

But if you can do both — it can work.

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Published on November 7, 2018

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