Software Executive Magazine

February/March 2018

Software Executive magazine helps software executives grow their businesses by showcasing the business best practices of our readers, executives from established and innovative software companies.

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Page 15 of 43

Vend could afford to pay $125,000 per rep, the math still wouldn't add up. It still wouldn't be able to keep up with the demand. And, like many B2B SaaS companies, its price points don't make sense for a strictly inside sales operation. Vend, for example, offers plan tiers at $69 per month for the starter version, $79 per month for advanced, and $199 for multi-outlet. Add-ons include a $39 per month option for an extra register, and $19 per month for priority phone support. "There's a main dif- ference in today's SaaS model versus the models from 15 or 20 years ago," Langlois says. "When you're selling a product that's in the hundreds of dollars per month category, you just don't have the economics to have reps in every city walking door to door." The economics Langlois is referring to are why many tech companies already have some sort of partner program today. The problem is, most of these part- ner programs aren't driving the kind of revenue and growth software companies were hoping for when they launched their partner programs. Why is that? It's because calculating partner program metrics isn't the kind of simple math that proves traditional sales teams are expensive. Langlois understands most companies get the numbers wrong on partnerships when they pri- oritize quantity over quality, and when they don't prop- erly evaluate leads. "Historically, companies sign a ton of partnerships and hope they all go get their one deal," says Langlois. "It becomes very hard to manage, and your brand loses a little bit of equity and market share because the part- ners' customers are unhappy. My feeling is we can go deep enough with partners who are actually very en- gaged." The only way to build a partner program that really scales is by having partners who become stew- ards in the market. And the only way to turn partners into stewards is to nurture those partners with person- alized attention, support, and incentives – something that can't be done well in bulk. A focus on finding and grooming quality partners is something all software companies with partner pro- grams preach on their websites. Not all software com- P AR TNER PR OGRAM METRICS Langlois says, "The economics of putting a ton of feet on the street or building out an inbound model is really expensive." He's right. But how expensive is expensive? Back in the October 2017 issue of Software Executive, we published snippets of The Bridge Group's SaaS Inside Sales Metrics & Compensation Report. Data from 384 S aaS companies shows just how expensive it is to build a robust direct sales engine. Consider this: ▶ The median on-target earnings per SaaS sales rep is $110,000. ▶ The average SaaS sales rep's base salary is $62,000. ▶ An average of $477 per rep is spent each month on sales acceleration technologies. Plus CNBC estimates U.S. employers cover roughly 70 percent of healthcare costs, which averages about $10,000 nationally. With some rounding, that means if your software company wants to build a team of 30 sales reps, it will cost upwards of $125,000 per rep, or $3,771,000 annually. These millions don't account for management overhead (the average SaaS sales manag- er is responsible for 7.2 reps) or the high cost of turnover (the average tenure of a SaaS sales rep is only 2.4 years). The average annual quota from The Bridge Group's re- port is $770,000 per rep, and that's a number that just isn't feasible for some software solutions because of price points and/or market size. Vend is in a better position than most software com- panies to shell out this kind of cash for an inside sales team. The company has raised $45 million since being founded in 2010, and a strong brand makes it a mar- ket leader (in 2017 Vend ranked in the top 15 on both Capterra and G2 Crowd in the point of sale software category). Langlois estimates "point of sale software" generates between 80,000 and 90,000 organic Google searches in the U.S. each month. Even if a company like "PARTNER PROGRAMS ARE NOT A CHANNEL THAT YOU JUST SAY, 'HEY, HERE WE GO. SIGN UP 100 PEOPLE, AND THE DEALS COME IN.' THERE'S A LOT MORE WORK TO IT, AND IT'S NOT ALWAYS SEXY TO DO IT. BUT IF YOU SET UP THE FRAMEWORK PROPERLY, IT CAN REALLY SCALE." 16 PARTNERSHIPS Exclusive feature By A. Sorensen PARTNERING SUCCESS: GETTING PAST PRESS RELEASE MODE SOFTWAREEXECUTIVEMAG.COM FEBRUARY/MARCH 2018

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