Sales: CRO Models V1.0

August 22, 2019
min to read
Francis Pedraza

What’s a Rich Text element?

The rich text element allows you to create and format headings, paragraphs, blockquotes, images, and video all in one place instead of having to add and format them individually. Just double-click and easily create content.

Static and dynamic content editing

A rich text element can be used with static or dynamic content. For static content, just drop it into any page and begin editing. For dynamic content, add a rich text field to any collection and then connect a rich text element to that field in the settings panel. Voila!

How to customize formatting for each rich text

Headings, paragraphs, blockquotes, figures, images, and figure captions can all be styled after a class is added to the rich text element using the "When inside of" nested selector system.

  • Hello bullet points

To run the demand side of the business, the CRO needs to:

-- Set targets for sales, expansion and churn from now to Series A >>> Q4 2019 and Q1 2020 Growth Targets

-- Set targets for Cost of Revenue for 2019 (40%), 2020 (30%), 2021 (25%) and 2022 (20%) >>> Cost of Revenue Model V1.1

-- Build a base and commission model for hiring an army of Sales & Expansion AEs >>> AE Compensation Model V1.6

-- Build a base and commission model for hiring an army of AMs >>> AM Compensation Model V1.2

All of these models are IN EFFECT. All of them are subject to change.

As we upgrade the models, we'll communicate to directly affected parties, and track changes in the upcoming HRMS.

I would love to demo these models someday. For now, some notes...

On our Growth Targets:

-- They are achievable but aggressive

-- If Churn is less than $5K, they become much easier to achieve

-- If Churn is more than $5K, they became insanely difficult to achieve

-- I'm more confident on Expansion than I am on New Sales right now

-- The big risk in New Sales is figuring out SalesOps to generate enough leads

-- Hopefully by EOM we'll have a repeatable sales model

But the main idea in the Cost of Revenue Model is:

-- The business generates $X in average Revenue per client per year (ACV)... that's tracking for $12K by EOY

-- The Cost of Goods Sold is $Y per client per year... we're hoping it is only 50% COGS by EOY, leaving 50% Gross Margins

-- The Cost of Revenue = sales ops + sales + support + marketing... because our book is small, in percentage terms our number is high: 40% Cost of Revenue

-- The goal is to increase the Gross Margin % and decrease the Cost of Revenue % over time, which is modeled out

-- We never want a Cost Of Revenue below 20%, because that means we're not spending enough on Marketing

-- So as Cost of Revenue drops, the ratio of Cost of Revenue spent on Marketing will increase

-- This model leads to interesting insights. For example, the maximum we should spend on SalesOps / LeadGen to stick within this model is $500 cost per close.

On the AE Model:

-- AEs will be responsible for both sales and expansion, they will have a book of business, and work with AMs to drive long-term client success

-- We're paying 10% cost of revenue for commission

-- 5% goes to AEs, 5% goes to sales & expansion managers/directors/VPs

-- Over the next 3-4 years, once we prove that great AEs can make $250-$400K/yr, we can lower the commission percentage

-- We can also lower the commission percentage on the management side by offering a higher base

-- The reason why The Partner Model will not work here, as opposed to other roles, is that we need to build an army...

-- If we wait for unicorns, then we can't hire fast enough to keep up with our targets

On the AM Model:

-- CSMs are now called AMs

-- Atusa is the only "CSM" because she's the manager of the team

-- AMs are no longer incentivized by commission but by hitting key indicators on their book of business

-- They play a support role to clients and AEs

-- Support costs will be ~7% by EOY

-- The goal is to get this down to 2-4% long term

-- The model achieves that

Hayley Darden Marketing Invisible Technologies
Francis Pedraza
Subscribe to our newsletter.
There's a guest bot-columnist. #GPT-3
Subscribe to our newsletter.
There's a guest bot-columnist. #GPT-3