How we’ve Hit $5MN+ ARR Selling $25K Deals to Customer Service Teams

Hello everyone.

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Welcome to the B2B SaaS podcast.

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I'm your host Upendra Varman.

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Today we have Greg Rich with us.

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Greg here is the CEO and co founder

of a company called Vivanteo.

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Hey Greg, welcome to the show.

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GregRich: Yeah.

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Nice to meet you.

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Thanks very much for having me.

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Upendra Varma: Yeah.

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All right, Greg.

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So let's try to understand, right, what

your company and product does and like

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why customers are paying you money.

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GregRich: Why pay this money?

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Okay.

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So Vervancio is an enterprise

service management platform for

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customers, service and support teams.

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Um, so we predominantly sell

into the mid market space.

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So these are typically teams that are

either growing or scaling, um, in terms

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of service and support, and they're kind

of moving away from either legacy or, or,

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um, entry level case management solutions

and looking for the, you know, their next

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evolution in terms of service management.

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Or, uh, it's going to be sort of

enterprise systems that are looking to

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find products and services that can, um,

still allow them to do what they want to

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do from a service and support perspective.

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Um, but they're trying to remove the

burden of management of those systems.

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You know, they, they're typically using

enterprise systems that are difficult

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to maintain, difficult to look after.

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Um, you know, not a great return on

investment from that perspective.

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And they're looking for the new, you know,

a new range of products and services that

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can allow them to do what they want to

do, but at a much more cost effective way.

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Um, yes, that's pretty much it.

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So the types of people, the types of

people that use Vivantio, you know,

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it, it, you know, we predominantly

sold into IT, uh, for, for many,

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many years, but, uh, you know,

Vivantio is a very scalable solution.

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Uh, we have customers, uh,

right across the enterprise now.

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Um, and you know, one of our areas of

focus is in customer service and support.

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So people providing support.

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To external customers, whether that's

MSPs or, um, you know, support for

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customers of their organization.

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And right across the business,

HR, finance, you know, everyone's

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a service team these days.

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Everyone's providing service either

to the business or to customers.

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And they all need a service

management solution like Vivantio.

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Upendra Varma: and, uh, and just one

products like serve everybody is that

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how it is or you've got like sort of

products, you know, serving for various,

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you know, customer profiles that

you have, like, so does your same it

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solution, you know, work well for, for

example, uh, external customer facing

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like customer support team was, you know,

helping out my customers, for example.

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GregRich: That's it.

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So, yeah, it's a very

great question, actually.

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So we, this is something we've

changed relatively recently.

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We did used to have a lot of

products, lots of different solutions.

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And actually what the market was

telling us was that it was too

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confusing, you know, difficult to

understand pricing difficult because

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it's such a comprehensive product to

understand which features they needed.

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Uh, so actually what we did, um,

this, uh, this year was we, we, we,

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we moved away from that completely.

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Uh, we simplified our license model.

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Uh, we just have now a single

platform, a single price that's

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designed to be used across.

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All service teams.

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Um, and the idea of the platform is

that it's a no code, low code product.

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It allows those customers to turn on and

off the features that they need, um, and

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to run it across multiple service teams.

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So through roles and permissions and

things like that, um, everybody can be

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using the same platform, uh, but obviously

have their own, you know, consolidated

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view, um, into their part of the business.

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Upendra Varma: Got it.

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Right.

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And then I have a couple of questions

here, but I'll come to that after a while.

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Right.

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So just want to understand the sense of

your customer base as of today, right?

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Like how many customers are you

serving on your platform today?

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GregRich: Serving on the platform,

hundreds of thousands a day, actually,

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uh, we have several hundred customers,

but you know, if you think about,

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uh, the technology and the types of

customers they're providing service

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and support to, um, you know, these

are large enterprises, um, that, that

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have customers, either thousands of

customers internally or hundreds of

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thousands of customers externally.

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So yeah, we, we have hundreds

of thousands of people using

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Upendra Varma: you talk about these,

like I asked you customers, not users

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in particular, like the customers

who are actually paying you money.

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GregRich: Yeah.

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So we have about 400

customers at the moment.

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Yeah,

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Upendra Varma: And that's a hundred

thousand is approximately the users or

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the, you know, the end users essentially

who will end up, who will end up

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GregRich: right.

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Consuming, consuming those services.

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Exactly.

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Yeah.

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Upendra Varma: And then how big of

a deal are we talking about, right?

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On an average, how, how much

your customer typically pays you?

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Are we talking about a 10, 000

mid market deal or are we talking

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about a 100, 000 enterprise deal?

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Just give us a

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GregRich: Yeah.

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So, I mean, it ranges, as you can imagine

as a, as a product and service like ours,

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you know, we, we have customers, uh,

you know, that are relatively small and

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we have very, very large customers, um,

like, uh, Texas Correctional Institute,

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you know, who have hundreds of thousands

of users actually, in fact, um, our

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average deal size sits around 25, 000.

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Upendra Varma: Makes sense.

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And like, are you comfortable, you know,

letting us know like where you are as

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a company in terms of revenue, right?

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Approximately.

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GregRich: Yeah.

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So we're now, uh, so we're,

we're, we're an old company with

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a, with a new startup mentality.

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So, uh, you know, without getting

into the backstory, you know, we've

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been bootstrapped up until about a

year ago, um, just over a year ago.

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And, uh, you know, that

was for various reasons.

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Uh, we're now sort of

poised for, for growth.

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We see a huge market opportunity,

uh, especially in the service

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and support part of the industry.

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Um, we're sitting at just around 5

million in terms of annual current

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revenue at the moment, a little bit higher

than that in terms of actual revenue.

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Upendra Varma: Got it.

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Right.

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So, and just, just, let's move on to

your growth journey here for a while.

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Right.

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So like, where, where are all of

these customers or enterprises or,

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you know, your deals, like where are

they finding you in the first place?

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Right.

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How does that top of

funnel look like today?

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Over the past 12 months, for example.

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GregRich: So the past 12 months

has been far more predictable

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than the previous 12 months.

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I have to, or the previous,

uh, years, in fact.

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Um, so what we've been doing,

uh, is investing a lot of

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time and effort into SEO.

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So, you know, one of the things

that we've wanted to do, especially

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as it relates to the customer

service and support market is try to

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educate, um, operations teams about.

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What service management has meant

to IT for the last two decades.

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Um, you know, there are

best practice frameworks.

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There are technologies that IT have

been using that really haven't been

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leveraged across the entire organization.

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So we've actually spent the last 12

months, um, releasing white papers, you

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know, putting out tons of blog posts

every week that talk about how, uh.

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Operations teams can elevate

service to their customers.

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Um, looking at service efficiency,

service optimization, um, thinking

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about integrations across the

business and things like that.

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So that has been really the

route that we have taken.

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And that that's where we're seeing

most of our growth at the moment.

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Upendra Varma: And like, was that

like, um, uh, did you invest a lot in

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those past 12 months on SEO or were

you already been doing for a while?

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And like, that's what given you most

of the results over the past 12 months.

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GregRich: Yeah, we've actually been,

uh, yeah, actually it's one of these

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strange things that, you know, we

have a very diverse set of customers,

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you know, everything from education

through professional services,

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through finance, through FinTech, I

mean, it really is a very broad, um,

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Upendra Varma: let me, let me

rephrase that question, right?

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So you've got around 400 customers, right?

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So just like a big chunk of them,

where did they discover you?

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Like, how did you end up?

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GregRich: Yeah.

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So 50 percent of our customer base, we're

actually using Vivantio for external

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customer support, uh, to support end

users of their products and services.

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Um, and, you know, coupled with that

and the fact that we're now seeing

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that, uh, customer services teams are,

uh, are being, you know, looked at

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as profit centers for organizations.

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You know, they really can help

drive growth of businesses.

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You know, they're part of retention.

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They're part of renewals.

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They're part of helping

with upsell and sale.

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Um, And, you know, there's a lot

of demand that's been put on those

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teams, uh, in, in these modern days.

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And so we, we've really seen that

there's an opportunity now to leverage

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that and to make sure that we're, you

know, we're providing tools and services

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to those teams that can really help

them elevate the customer experience.

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Upendra Varma: Oh, sorry, Greg.

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So what I was trying to

understand is where did they

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discover you in the first place?

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Like, how are they finding you?

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Like, is it SEO or is

there something else?

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Are you doing any outbound sales?

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Like what's that first touch

point look like for all of your

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GregRich: Well, you have to

remember we've been around 20 years.

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So of course it's, uh, you know, it has

varied, um, considerably over that time.

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Um, you know, as, as a relative as

well as a small company, uh, you

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know, we've had to be quite nimble.

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We've had to be able to react to, you

know, the market in the early days.

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We were one of the first

adopters of Google AdWords, you

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know, it was fantastic for us.

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And of course, now we can't compete,

uh, in, in that because, you know, our

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enterprise peers, um, you know, dominate

that space and it makes it impossible.

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So, you know, you have to be nimble.

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You have to learn how to kind

of adjust to market conditions.

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Um, but to us, like I said, the SEO

piece is a big one for us because

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it brings people to our site.

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They're inquisitive.

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They want to understand how they

can improve service without spending

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enterprise dollars in order to do that.

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Um, and that's typically what

leads, leads customers to us.

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Um.

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Upendra Varma: essentially SEO is

the one that's really been driving

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most of the growth these days.

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Is that how you can

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GregRich: Certainly.

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Yeah.

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I mean, we, we back it up with, uh,

with, with, uh, you know, we, we think

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about it as a multi channel approach.

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So of course we use LinkedIn, we use

display, uh, uh, you know, advertising

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and things like that, um, and, uh, to,

to try and ensure that we continue to get

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that message across, you know, we don't,

it's not just a fire and forget mentality.

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Uh, obviously we have, uh, email, uh,

marketing sequences that we use to

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keep people informed about, you know,

changes to the product service and

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other white papers that we're releasing.

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So, you know, we have a number

of tactics that surround.

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Our messaging, um, but, but predominantly

it's really that, that education pieces

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is what we're pinning everything on.

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Upendra Varma: And you do any

outbound sales or no today?

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GregRich: So we are doing some,

it's, you know, it's proven, uh,

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positive in the past, and then

it's not proven to work so well.

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Um, but we are fortunate we brought in

an EVP of sales, uh, recently, um, under

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the, uh, remit of our chief revenue

officer, um, who has a ton of experience

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in building out, um, outbound sales teams.

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And it's very new, you know,

we've, we've literally had that

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position in for a few months.

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So, uh, in fact, the first employee, uh,

working under Jim started this, this week.

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So, so again, that, that is something

we're starting to look at now.

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Yeah.

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And again, it's, it's

part of the same thing.

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It's like, how do we get

our message out there?

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How do we actually communicate to people

about what our value proposition is?

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Upendra Varma: Got it.

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Right.

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So yeah, let's, let's move on.

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Right.

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So like I was trying to understand this a

lot more because like at 5 million, right.

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So at 5 million ARR, like what, what

would you, what would you bet on?

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Right.

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Is SEO your primary thing?

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If yes, like how do you, like how much

of your growth is coming from SEO?

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Just, just want to get a sense there.

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Can you just quantify here?

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Like.

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GregRich: yeah.

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Upendra Varma: Just put a number there.

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For example, how much percentage

of your new leads just come from

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GregRich: I would say

it's a large proportion.

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I would probably say 60 to 70%.

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You know, you have to remember that

we're selling into an industry, uh,

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where people are, you know, relatively

tech savvy, um, to a certain degree,

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they kind of know what they want.

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They do a lot of research before they

reach out to someone like Vavanchio

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to look at a product and services.

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Our, our sales cycles are relatively

short, you know, 60 to 90 days because

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of the amount of time that, um, our

prospects have taken to, you know,

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evaluate and investigate solutions, even

before picking up the phone or raising a

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hand or filling out a form on a website.

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Um, so, so by the time they

actually get to us, they're,

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they're pretty well informed.

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Upendra Varma: let's talk

about the sales cycle, right?

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So what happens on somebody discovers

you when somebody did their research

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and they can come to you, right?

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What happens after that?

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Like how do you convince them to

become a paying customer of yours?

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GregRich: So it goes, we go

through a number of stages.

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You know, the first thing we do is we

try and have a scoping call with somebody

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to understand what their pain points

are, why they're looking, you know,

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what are they trying to achieve here?

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Uh, what are they using at the moment?

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Um, what's not working for them and

what's that kind of current future state

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look like, you know, what are, what

are they trying to get to as a business

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and what are their business challenges?

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Um, and based on the back of that, what

we'll then do is we'll customize a demo

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for them that I, you know, showcases

some of the features that we have in

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the product that actually solves those

business challenges that they have.

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Um, so that, that's

typically the second stage.

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Um, and then the third stage really,

uh, it can go one of two ways.

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Oh, sometimes people will ask for

just a trial of the system and

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we're happy to oblige and, you

know, give somebody a 30 day access.

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What we try and encourage them to do is

to actually work with our implementation

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consultants, uh, free of charge to put a.

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Proof of concept in place.

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Uh, we, we find that, um, you know,

having the opportunity to hold their

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hand, uh, you know, just for a couple of

days in implementing, um, certain parts

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of the solution and for them to realize

how simple and easy it is to configure

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and how quickly they can actually start

getting an ROI, um, that that's really

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advantageous both for them and for us,

um, because they really do understand

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the value of the products at that point.

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So, so a POC is really where we try

and, you know, try and steer people if

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they have the time and the willingness

and the capacity to do it, yeah.

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Upendra Varma: And then like it's

it's 60 odd days is that what you're

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saying 60 to 90 days It's is that

how your sales cycle typically takes?

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GregRich: Uh, 60 to 90 days.

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Yeah.

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Yeah.

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I mean, it can extend beyond that

for enterprise customers, you know,

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uh, those, those, um, that there are

larger buying committees and they

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have to get, you know, procurement is,

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Upendra Varma: Yeah

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GregRich: could be long winded as,

as I'm sure, you know, um, but, but,

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but typically, yeah, for our ideal

customers, typically 60 to 90 days.

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Yeah.

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Upendra Varma: Got it.

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Right.

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So, so Greg, like, so just

give us a sense, right?

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So, I mean, I see a lot of your product

or, you know, your reviews, most of them

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are around, you know, it, you know, it

service management, something like that.

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But I recently also see that you, you

switched on to this external facing

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customer support teams and all of it.

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Right.

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So how's the journey going on?

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Like, when did you make the switch

and like, like, is it like literally

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going from zero to one in terms

of, you know, acquiring this new

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customer base and adapting to them,

adapting them to a product or like,

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how's that journey looking like?

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So, and is that your bet on how

you're going to grow from 5 million

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to let's say your next big milestone?

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GregRich: Yeah.

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So I think in terms of going to, to answer

your first question, thinking about the

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journey, um, as I alluded to earlier, I

think we kind of fell into it to a certain

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degree, 50 percent of our customers

were using it for external support.

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Um, and it wasn't until we started

doing, you know, that market research,

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um, you know, I'm part of the

Gartner, um, CEO startup program.

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Um, so I get access to their analysts

and that's really helpful in terms

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of validating some of the things

that we're seeing in the market.

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Um, and that was a great opportunity

for us to, to really think about where

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we could differentiate our products and

services, you know, the service management

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market is saturated with products.

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I mean, especially on the it side.

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Um, and so, you know, we wanted to

find a way that we could carve a

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niche in that particular market.

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And we believe for us, customer

service and support is that niche.

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Um, so, so that, like I said,

that was really a change in focus.

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So we already have 50 percent of

our customers using it for that.

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Um, but then on the flip side, we're

actually seeing that, uh, you know,

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enterprise service management is also

be becoming a big play, you know, is not

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really thinking about service and support

within a single team, but how can you.

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You know, holistically think about the

way that you're delivering services

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across your entire organization.

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Um, and eventually plays well in,

in, in that, in that area too.

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Um, you know, we do find, uh, more

often than not, that when we land a new

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customer, it's not very long before they

start thinking about adoption across

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the organization, into facilities,

management, HR, finance, uh, governance,

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risk, and compliance, you know.

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All of these teams can make use

of a solution like Financio.

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And there's a benefit in having, uh,

you know, a single service management

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platform across your entire organization.

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When you want to ask, when you want to

start understanding or measuring how

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you're delivering service, both to your

internal and external customers and what,

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what impact that has on the bottom line.

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Upendra Varma: Let's talk about

churn and expansion here, right?

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I think since you've already

touched upon it, right?

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So how does churn look

like for you, right?

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So typically how, like, how long does

a customer stick with you and like,

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what's that percentage look like?

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GregRich: Oh, forever.

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They're here forever.

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No, no, I'm joking.

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So, so typically the customers, our

average tenure is about six years.

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Um, you know, and it, it does vary, uh,

depending on the size of the customer.

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Uh, our ICP customers have been with

us anywhere between nine and 12 years.

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You know, it's a significantly

longer period of time.

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It's a very sticky product when you start

getting into, you know, uh, customers

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that are really understanding and,

and, and, you know, using the value

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of the product within the organization

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Upendra Varma: And how does, and

then talk about that expansion

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strategy you have, right?

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So you, you, you mentioned that, you

know, one team goes on to, you know, yeah.

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So just like, how, how

is that working for you?

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Well, and maybe you can

just quantify that as well.

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GregRich: Yeah, quantifying is easy.

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So our, our, our net retention

is about 110 to 115%.

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So, you know, uh, whilst, whilst we

do lose some customers and obviously

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no, no organization or no company ever

wants to lose customers, but that's just

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the natural order of things that, that

just happens for, for various reasons.

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Uh, you know, we are, um, you know,

the expansion within our existing

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customer base is significantly

outweighing what we're, what we're

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losing from, from customer churn.

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Upendra Varma: And which

dimension is this along?

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Is this along the number of users that

they're using or is it along, you know,

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different product line or different, some

other team sort of adopting, you know,

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the platform, like which dimension is

this sort of extract revenue that you're

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generating from an existing customer?

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GregRich: Yeah, it does go in both

directions, actually, both sort

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of vertically and horizontally.

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Uh, what we find that, um, you know,

as product teams mature, they start

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making or turning on features of

Avancio that allowed that team to scale.

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So that's a big thing for them.

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They start building out workflows,

automation, um, things like that.

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So, so that obviously helps.

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Uh, and like I said, the

other is horizontally.

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They start looking at how those

service, how that tool can be

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used to have advantage could be

used across their organization.

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So they can start delivering the same kind

of service to their internal customers

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as deliver to their external customers.

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Upendra Varma: Got it.

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So Greg, talk about the team today, right?

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It's how many folks you have in your team

working and like, what do they work on?

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GregRich: So we have, uh, so as you

can tell from my accent, I'm originally

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from the UK, uh, and, uh, half of our

team, in fact, more than half of our

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team, about 70 percent of our team

are back in the UK at the moment.

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We have about 45, 50 staff today.

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Um, and like I said, you know, uh, a large

majority of those are back in the UK.

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Um, uh, mainly, you know, the split

of that is most of our sales and

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marketing team, uh, here in the U S.

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Um, and we have some product support, you

know, implementation, um, professional

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services teams that, uh, that reside

here to support our US customers.

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And then back in the UK, we have our sort

of, uh, our main, uh, technical support

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teams, engineering teams, uh, operational

support, DevOps, that, that kind of thing.

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Yeah.

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Upendra Varma: And like, what's,

what's the vision here, Greg?

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Like, where do you see your company going?

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Let's say three to five years.

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Like what's going to happen?

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Are you going to raise an external funding

and, you know, pump, you know, pump up

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the growth or like, what's the plan here?

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GregRich: Yeah.

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So we, we, we've already gone

through one small round of funding,

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Upendra Varma: how much did you raise?

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GregRich: Yeah, we raised 2

million, uh, in terms of debt, um,

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and that was to help fuel growth.

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And like I said, the company has

doubled in size, um, during that time.

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And we've seen, uh, growth,

uh, of about 20 to 30%.

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Um, and that the plan is

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Upendra Varma: But you've

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Is that correct?

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GregRich: that's right.

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Yep, absolutely.

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And then, uh, we've actually, you know,

we employed a CFO a few months ago,

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uh, as part of our growth ambition.

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And, uh, we've been working with

the CFO now, and we will be going

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out to the, to the wider community

at the start of September.

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Uh, to look at an equity round,

what that number looks like.

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I can't tell you, I don't actually

know because we're kind of working on

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the financial model now and we're kind

of finalizing that, that, uh, that,

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that's that, um, the, the, the, the

deck and the, and the, and the sort of

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go to market that goes along with that.

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Um, but, but that's, that's

the plan for this year.

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And then in terms of growth,

you know, um, it's a 26 billion

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market, uh, which is growing 13%,

uh, year on year at the moment.

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Um, so, you know.

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We have a huge, there's a huge opportunity

there for us, uh, in, in, uh, in becoming

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what I would from, from my perspective,

you know, I've always considered ourselves

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to be a customer services organization

that develops service management

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software, not the other way around.

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Uh, you know, my vision is that, uh,

you know, we're seen as that, that we're

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seeing as the leader in terms of like how

our products and services can be used to

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really elevate the customer experience

and what that means to organizations.

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You know, that, that's a big thing for me.

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Um, and, and, and, you know, just.

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Yeah, both in terms of product and

in terms of the way that we, you

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know, we serve as our customers.

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Upendra Varma: That's great.

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So, all right, Rick, thanks for

taking the time to talk to me.

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Hope you scale your venture

to much, much greater heights.

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GregRich: There's lovely

talking to you too.

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Yeah.

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Thanks very, very much for your time.