Technical Sales by Hub
How Startups Can Squeeze More Revenue Without Increasing Headcount
In short, the answer is presales. And the ‘force multiplier effect” that presales can have on revenue growth.
An article we recently published in TechCrunch expands on two topics important to CROs who want to boost revenue without adding headcount. It shows the revenue value of an effective presales team and maps out the importance of improving productivity in presales activities.
The Force Multiplier Effect and the Real Power of Presales
A McKinsey and Company survey shows that investing in presales can boost conversion rates by five points, raise revenue between six and 13 percent, and accelerate sales by 10 to 20 percent. So rather than just tossing more reps into the mix, the CRO can try a more efficient approach: the presales force multiplier effect.
Let’s take a high sales volume/low contract value revenue model, with ACVs (annual contract values) at $10,000 – $50,000, with a fairly common 10:1 sales-to-presales ratio. If each sales rep has an annual quota of $750,000, then a single presales professional has a $7.5 million quota influence. That means a productivity increase of just 5% can bring in $375,000 in incremental revenue, no headcount added.
In a medium volume/medium value model — ACVs from $51,000 – $100,000; a 5:1 sales-to-presales ratio; $900,000 annual quotas — one presales pro influences $4.5 million across all five reps. A 10 percent productivity rise could mean $450,000. In low volume/high value models — up to 7-figure deals, $1.5 million quotas, and a 2:1 ratio — 15 percent greater productivity could mean $450,000 more revenue.
To Fuel Revenue Growth, Invest in Presales Productivity
An array of activities are handled by presales pros and their leaders. Let’s look at some areas where a productivity platform can really make a difference:
- Discovery, where skilled technical qualification of prospects saves time by ruling out poor opportunities early to focus on the good ones.
- Demonstration, where product features are mapped to prospect requirements, accelerating the prospect through the sales funnel.
- Proof of Concept/Proof of Value management can be both indispensable and expensive. A system that assures best practices are followed and important tasks are monitored can mean significant returns.
- Documenting best practices allows them to be shared with and used by all team members.
- Advocating for the right features, like the ability to aggregate knowledge into a single source of record rather than scattered around, can optmize internal collaboration.
- Putting the right people on the right activities is easier with a single presales source of record that tracks individual contributors and offers the big insights that yield max revenue.
The presales force multiplier effect can be significant for most technical sellers. Learn more in the TechCrunch article, “How optimizing presales productivity can help startups multiply revenue growth”.