How Cheap a Product Can You Have And Still Have Salespeople?

#Discussion(Startup) [ via IoTGroup ]

One question I struggled with a lot in the early days was what price points supported inside sales reps.
And it became clear to me that five-figure or larger ACV deals could clearly support an inside sales team, once I handed those off to sales.
First, at the low end of the market, there are 2 types of sales: “Real” sales with demos, leads, a sales process … and 1-Call-To-Close.
The more interesting question is how low a price point you can go with True Inside Sales.
At the end of the day, most inside sales reps can probably close 8-12 deals a month .
[A 1-Call-To-Close environment as noted above is different, but let’s put that aside.] OK, so if an SMB rep needs to make say $80-$100k in OTE (base + bonus) … and you need to clear say $300k in revenue from that rep to make the math work on your side … at say 100 closed deals a year, to bring in $300k to the company, each deal has to have a $3,000 ACV on average .
. So the straight math says it’s tough to have inside sales reps making $80k-$100k+ OTE working on deals < $3,000 ACV or $299/month . If you survey different SaaS companies that are post-Traction, you’ll see the low-end segment of their inside sales team is often focused around this price point, with other, different reps handling higher price points, but few reps at price points lower that this, unless it’s early days and just to learn. I do think $3k ACV or $299/mo for modelling purposes needs to be the core low price point and segment for your Inside Sales team. Our best $99/month inside sales reps could close 30+ deals a month, so long as we gave them enough leads. I’m not saying you can build a whole Inside Sales team around a $1k ACV or $99 price point. But as part of a bigger picture, as a segment … I think you can make money as low as $99 down and $99 a month with your Inside Sales team. So Asana lets deals < $3k or so close themselves, and drops in its sales team as the deal size gets higher.

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